as introduced - 91st Legislature (2019 - 2020) Posted on 03/28/2019 05:09pm
|Introduction||Posted on 03/13/2019|
A bill for an act
relating to construction codes; modifying the contractor recovery fund to include
claims against solar installers; amending Minnesota Statutes 2018, section 326B.89,
subdivisions 1, 6.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Minnesota Statutes 2018, section 326B.89, subdivision 1, is amended to read:
(a) For the purposes of this section, the following terms have
the meanings given them.
(b) "Gross annual receipts" means the total amount derived from residential contracting
or residential remodeling activities, regardless of where the activities are performed, and
must not be reduced by costs of goods sold, expenses, losses, or any other amount.
(c) "Licensee" means a new text beginnew text endperson licensed as a residential contractor or
(d) "Residential real estate" means a new or existing building constructed for habitation
by one to four families, and includes detached garages intended for storage of vehicles
associated with the residential real estate.
(e) "Fund" means the contractor recovery fund.
(f) "Owner" when used in connection with real property, means a person who has any
legal or equitable interest in real property and includes a condominium or townhome
association that owns common property located in a condominium building or townhome
building or an associated detached garage. Owner does not include any real estate developer
or any owner using, or intending to use, the property for a business purpose and not as
owner-occupied residential real estate.
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Minnesota Statutes 2018, section 326B.89, subdivision 6, is amended to read:
To be eligible for compensation from the fund, an owner
or lessee shall serve on the commissioner a verified application for compensation on a form
approved by the commissioner. The application shall verify the following information:
(1) the specific grounds upon which the owner or lessee seeks to recover from the fund;
(2) that the owner or the lessee has obtained a final judgment in a court of competent
jurisdiction against a new text beginnew text endlicensee licensed under section 326B.83;
(3) that the final judgment was obtained against the licensee on the grounds of fraudulent,
deceptive, or dishonest practices, conversion of funds, or failure of performance that arose
directly out of a contract directly between the licensee and the homeowner or lessee that
was entered into prior to the cause of action and that occurred when the licensee was new text beginnew text endlicensed and performing any of the special skills enumerated under
section 326B.802, subdivision 15;
(4) the amount of the owner's or the lessee's actual and direct out-of-pocket loss on the
owner's residential real estate, on residential real estate leased by the lessee, or on new
residential real estate that has never been occupied or that was occupied by the licensee for
less than one year prior to purchase by the owner;
(5) that the residential real estate is located in Minnesota;
(6) that the owner or the lessee is not the spouse of the licensee or the personal
representative of the licensee;
(7) the amount of the final judgment, any amount paid in satisfaction of the final
judgment, and the amount owing on the final judgment as of the date of the verified
(8) that the owner or lessee has diligently pursued remedies against all the judgment
debtors and all other persons liable to the judgment debtor in the contract for which the
owner or lessee seeks recovery from the fund; and
(9) that the verified application is being served within two years after the judgment
The verified application must include documents evidencing the amount of the owner's
or the lessee's actual and direct out-of-pocket loss. The owner's and the lessee's actual and
direct out-of-pocket loss shall not include any attorney fees, litigation costs or fees, interest
on the loss, and interest on the final judgment obtained as a result of the loss or any costs
not directly related to the value difference between what was contracted for and what was
provided. Any amount paid in satisfaction of the final judgment shall be applied to the
owner's or lessee's actual and direct out-of-pocket loss. An owner or lessee may serve a
verified application regardless of whether the final judgment has been discharged by a
bankruptcy court. A judgment issued by a court is final if all proceedings on the judgment
have either been pursued and concluded or been forgone, including all reviews and appeals.
For purposes of this section, owners who are joint tenants or tenants in common are deemed
to be a single owner. For purposes of this section, owners and lessees eligible for payment
of compensation from the fund shall not include government agencies, political subdivisions,
financial institutions, and any other entity that purchases, guarantees, or insures a loan
secured by real estate.
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