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Minnesota Legislature

Office of the Revisor of Statutes

HF 2668

3rd Engrossment - 86th Legislature (2009 - 2010) Posted on 05/12/2010 01:27pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - 3rd Engrossment

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A bill for an act
relating to real property; landlord and tenant; requiring receipts for cash
payments; providing for recovery of attorney fees under certain conditions;
modifying procedures for tenant screening fees; providing for imposition of
late fees; providing for eviction procedures for tenants of certain foreclosed
property; making clarifying, conforming, technical, and other changes to landlord
and tenant provisions; amending Minnesota Statutes 2008, sections 484.014,
subdivision 3; 504B.173; 504B.178, subdivision 7; 504B.215, subdivision 2a;
504B.271, subdivisions 1, 2; 504B.285, by adding subdivisions; 504B.291,
subdivision 1; 504B.365, subdivision 4; Minnesota Statutes 2009 Supplement,
section 504B.285, subdivision 1; proposing coding for new law in Minnesota
Statutes, chapter 504B.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2008, section 484.014, subdivision 3, is amended to read:


Subd. 3.

Mandatory expungement.

The court shall order expungement of an
eviction case commenced solely on the grounds provided in section 504B.285, subdivision
1, clause (1), if the court finds that the defendant occupied real property that was subject to
contract for deed cancellation or mortgage foreclosure and:

(1) the time for contract cancellation or foreclosure redemption has expired and the
defendant vacated the property prior to commencement of the eviction action; or

(2) the defendant was a tenant during the contract cancellation or foreclosure
redemption period and did not receive a notice under section 504B.285, subdivision deleted text begin1deleted text endnew text begin 1a,
1b, or 1c
new text end
, deleted text beginclause (1),deleted text end to vacate on a date prior to commencement of the eviction case.

Sec. 2.

new text begin [504B.118] RECEIPT FOR RENT PAID IN CASH.
new text end

new text begin A landlord receiving rent or other payments from a tenant in cash must provide a
written receipt for payment immediately upon receipt if the payment is made in person, or
within three business days if payment in cash is not made in person.
new text end

Sec. 3.

new text begin [504B.172] RECOVERY OF ATTORNEY FEES.
new text end

new text begin If a residential lease specifies an action, circumstances, or an extent to which a
landlord, directly, or through additional rent, may recover attorney fees in an action
between the landlord and tenant, the tenant is entitled to attorney fees if the tenant prevails
in the same type of action, under the same circumstances, and to the same extent as
specified in the lease for the landlord.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for leases entered into on or after
August 1, 2011, and for leases renewed on or after August 1, 2012.
new text end

Sec. 4.

Minnesota Statutes 2008, section 504B.173, is amended to read:


504B.173 APPLICANT SCREENING FEE.

Subdivision 1.

deleted text beginLimit on number of applicant screening feesdeleted text endnew text begin Limitationsnew text end.

A
landlord deleted text beginor the landlord's agentdeleted text end may notnew text begin:
new text end

new text begin (1)new text end charge an applicant a screening fee when the landlord knows or should have
known that no rental unit is available at that time or will be available within a reasonable
future timedeleted text begin.deleted text endnew text begin;
new text end

new text begin (2) collect or hold an applicant screening fee without giving the applicant a written
receipt for the fee, which may be incorporated into the application form, upon request
of the applicant; or
new text end

new text begin (3) use, cash, or deposit an applicant screening fee until all prior applicants have
either been screened and rejected, or offered the unit and declined to enter into a rental
agreement.
new text end

Subd. 2.

Return of applicant screening fee.

deleted text begin If the landlord or the landlord's agent
does not perform a personal reference check or does not obtain a consumer credit report
or tenant screening report, the landlord or the landlord's agent shall return any amount
of the screening fee that is not used for those purposes.
deleted text end new text begin (a) The landlord must return the
applicant screening fee if:
new text end

new text begin (1) the applicant is rejected for any reason not listed in the disclosure required
under subdivision 3; or
new text end

new text begin (2) a prior applicant is offered the unit and agrees to enter into a rental agreement.
new text end

new text begin (b) If the landlord does not perform a personal reference check or does not obtain a
consumer credit report or tenant screening report, the landlord must return any amount of
the applicant screening fee that is not used for those purposes.
new text end

new text begin (c)new text end The new text beginapplicant new text endscreening fee may be returned by mail, may be destroyed upon the
applicant's request if paid by check, or may be made available for the applicant to retrieve.

Subd. 3.

Disclosures to applicant.

new text beginIf new text enda landlord deleted text beginor the landlord's agent, prior to
taking an application
deleted text end new text beginaccepts an applicant screening new text endfee from a prospective tenant, new text beginthe
landlord
new text endmustnew text begin:
new text end

new text begin (1)new text end disclose deleted text beginon the application form or orallydeleted text endnew text begin in writing prior to accepting the
applicant screening fee:
new text end

new text begin (i)new text end the name, address, and telephone number of the tenant screening service the deleted text beginownerdeleted text endnew text begin
landlord
new text end will use, unless the deleted text beginownerdeleted text endnew text begin landlordnew text end does not use a tenant screening servicedeleted text begin.deleted text endnew text begin; and
new text end

new text begin (ii) the criteria on which the decision to rent to the prospective tenant will be based;
and
new text end

new text begin (2) notify the applicant within 14 days of rejecting a rental application, identifying
the criteria the applicant failed to meet.
new text end

Subd. 4.

Remedies.

new text begin(a) new text endIn addition to any other remedies, a landlord who violates
this section is liable to the applicant for the deleted text beginapplicationdeleted text endnew text begin applicant screeningnew text end fee plus a civil
penalty of up to $100, civil court filing costs, and reasonable attorney fees incurred to
enforce this remedy.

new text begin (b) A prospective tenant who provides materially false information on the application
or omits material information requested is liable to the landlord for damages, plus a civil
penalty of up to $500, civil court filing costs, and reasonable attorney fees.
new text end

Sec. 5.

new text begin [504B.177] LATE FEES.
new text end

new text begin (a) A landlord of a residential building may not charge a late fee if the rent is paid
after the due date, unless the tenant and landlord have agreed in writing that a late fee may
be imposed. The agreement must specify when the late fee will be imposed. In no case
may the late fee exceed eight percent of the overdue rent payment. Any late fee charged or
collected is not considered to be either interest or liquidated damages. For purposes of this
paragraph, the "due date" does not include a date, earlier than the date contained in the
written or oral lease by which, if the rent is paid, the tenant earns a discount.
new text end

new text begin (b) If a federal statute, regulation, or handbook providing for late fees for a tenancy
subsidized under a federal program conflicts with paragraph (a), then the landlord may
continue to publish and implement a late payment fee schedule that complies with the
federal statute, regulation, or handbook.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2011, for leases entered
into or renewed on or after that date.
new text end

Sec. 6.

Minnesota Statutes 2008, section 504B.178, subdivision 7, is amended to read:


Subd. 7.

Bad faith retention.

The bad faith retention by a landlord of a deposit,
the interest thereon, or any portion thereof, in violation of this section shall subject the
landlord to punitive damages not to exceed deleted text begin$200deleted text endnew text begin $500new text end for each deposit in addition to
the damages provided in subdivision 4. If the landlord has failed to comply with the
provisions of subdivision 3 or 5, retention of a deposit shall be presumed to be in bad faith
unless the landlord returns the deposit within two weeks after the commencement of
any action for the recovery of the deposit.

Sec. 7.

Minnesota Statutes 2008, section 504B.215, subdivision 2a, is amended to read:


Subd. 2a.

Conditions of separate utility billing to tenant in single-meter
buildings.

deleted text beginIf thedeleted text endnew text begin (a) Anew text end landlord of a single-metered residential building new text beginwho new text endbills for
utility charges separate from the rentdeleted text begin, the following conditions applydeleted text end:

(1) new text beginmust provide new text endprospective tenants deleted text beginmust be provideddeleted text end notice of the total utility cost
for the building for each month of the most recent calendar year; deleted text beginand
deleted text end

(2) new text beginmust predetermine and put in writing for all leases new text endan equitable method of
apportionment and the frequency of billing by the landlord deleted text beginmust be predetermined and put
in writing for all leases.
deleted text endnew text begin;
new text end

new text begin (3) must include in new text endthe lease deleted text beginmust containdeleted text end a provision that, upon a tenant's request,
deleted text begin adeleted text endnew text begin thenew text end landlord must provide a copy of the actual utility bill for the building along with
each apportioned utility bill. Upon a tenant's request, a landlord must also provide past
copies of actual utility bills for any period of the tenancy for which the tenant received
an apportioned utility bill. Past copies of utility bills must be provided for the preceding
two years or from the time the current landlord acquired the building, whichever is most
recentdeleted text begin.deleted text endnew text begin; and
new text end

deleted text begin The landlord of a single-metered residential building who bills separately for utilitiesdeleted text endnew text begin
(4)
new text end may, if the landlord and tenant agree, provide tenants with a lease term of one year or
more the option to pay those bills under an annualized budget plan providing for level
monthly payments based on a good faith estimate of the annual bill.

new text begin (b) new text endBy September 30 of each year, a landlord of a single-metered residential building
who bills for gas and electric utility charges separate from rent deleted text beginshalldeleted text endnew text begin mustnew text end inform tenants
in writing of the possible availability of energy assistance from the low income home
energy assistance program. The information must contain the toll-free telephone number
of the administering agency.

new text begin (c) A failure by the landlord to comply with this subdivision is a violation of sections
504B.161, subdivision 1, clause (1), and 504B.221.
new text end

Sec. 8.

Minnesota Statutes 2008, section 504B.271, subdivision 1, is amended to read:


Subdivision 1.

Abandoned property.

new text begin(a) new text endIf a tenant abandons rented premises, the
landlord may take possession of the tenant's personal property remaining on the premises,
and shall store and care for the property. The landlord has a claim against the tenant for
reasonable costs and expenses incurred in removing the tenant's property and in storing
and caring for the property.

new text begin (b) new text endThe landlord may sell or otherwise dispose of the property deleted text begin60deleted text endnew text begin 28new text end days after the
landlord receives actual notice of the abandonment, or deleted text begin60deleted text endnew text begin 28new text end days after it reasonably
appears to the landlord that the tenant has abandoned the premises, whichever occurs
lastdeleted text begin, anddeleted text endnew text begin.
new text end

new text begin (c) The landlordnew text end may apply a reasonable amount of the proceeds of deleted text beginthedeleted text endnew text begin anew text end sale to
the removal, care, and storage costs and expenses or to any claims authorized pursuant
to section 504B.178, subdivision 3, paragraphs (a) and (b). Any remaining proceeds of
any sale shall be paid to the tenant upon written demand.

new text begin (d) new text endPrior to deleted text beginthedeleted text endnew text begin anew text end sale, the landlord shall make reasonable efforts to notify the tenant
of the sale at least 14 days prior to the sale, by personal service in writing or sending
written notification of the sale by new text beginfirst-class and new text endcertified maildeleted text begin, return receipt requested,deleted text end to
the tenant's last known address or usual place of abode, if known by the landlord, and by
posting notice of the sale in a conspicuous place on the premises deleted text beginfordeleted text end at least two weeksdeleted text begin.deleted text endnew text begin
prior to the sale. If notification by mail is used, the 14-day period shall be deemed to start
on the day the notices are deposited in the United States mail.
new text end

Sec. 9.

Minnesota Statutes 2008, section 504B.271, subdivision 2, is amended to read:


Subd. 2.

Landlord's punitive damages.

If a landlord, an agent, or other person
acting under the landlord's direction or control, in possession of a tenant's personal
property, fails to allow the tenant to retake possession of the property within 24 hours after
written demand by the tenant or the tenant's duly authorized representative or within 48
hours, exclusive of weekends and holidays, after written demand by the tenant or a duly
authorized representative when the landlord, the landlord's agent or person acting under the
landlord's direction or control has removed and stored the personal property in accordance
with subdivision 1 in a location other than the premises, the tenant shall recover from the
landlord punitive damages new text beginin an amount new text endnot to exceed deleted text begin$300deleted text endnew text begin twice the actual damages or
$1,000, whichever is greater,
new text end in addition to actual damages and reasonable attorney's fees.

In determining the amount of punitive damages the court shall consider (1) the
nature and value of the property; (2) the effect the deprivation of the property has had
on the tenant; (3) if the landlord, an agent, or other person acting under the landlord's
direction or control unlawfully took possession of the tenant's property; and (4) if the
landlord, an agent, or other person under the landlord's direction or control acted in bad
faith in failing to allow the tenant to retake possession of the property.

The provisions of this subdivision do not apply to personal property which has been
sold or otherwise disposed of by the landlord in accordance with subdivision 1, or to
landlords who are housing authorities, created, or authorized to be created by sections
469.001 to 469.047, and their agents and employees, in possession of a tenant's personal
property, except that housing authorities must allow the tenant to retake possession of the
property in accordance with this subdivision.

Sec. 10.

Minnesota Statutes 2009 Supplement, section 504B.285, subdivision 1,
is amended to read:


Subdivision 1.

Grounds.

The person entitled to the premises may recover
possession by eviction when:

(1) any person holds over real property:

(i) after a sale of the property on an execution or judgment; or

(ii) after the expiration of the time for redemption on foreclosure of a mortgage, or
after termination of contract to convey the propertynew text begin; new text enddeleted text begin, provided that if the person holding
the real property after the expiration of the time for redemption or termination was a
tenant during the redemption or termination period under a lease of any duration and the
lease began after the date the mortgage or contract for deed was executed but prior to the
expiration of the time for redemption or termination, and the person has received:
deleted text end

deleted text begin (A) at least two months' written notice to vacate no sooner than one month after the
expiration of the time for redemption or termination, provided that the tenant pays the
rent and abides by all terms of the lease; or
deleted text end

deleted text begin (B) at least two months' written notice to vacate no later than the date of the
expiration of the time for redemption or termination, which notice shall also state that the
sender will hold the tenant harmless for breaching the lease by vacating the premises if the
mortgage is redeemed or the contract is reinstated;
deleted text end

(2) any person holds over real property after termination of the time for which
it is demised or leased to that person or to the persons under whom that person holds
possession, contrary to the conditions or covenants of the lease or agreement under which
that person holds, or after any rent becomes due according to the terms of such lease or
agreement; or

(3) any tenant at will holds over after the termination of the tenancy by notice to quit.

Sec. 11.

Minnesota Statutes 2008, section 504B.285, is amended by adding a
subdivision to read:


new text begin Subd. 1a. new text end

new text begin Grounds when the person holding over is a tenant in a foreclosed
property.
new text end

new text begin (a) For any eviction action commenced on or before December 31, 2012, where
the person holding the real property after the expiration of the time for redemption on
foreclosure of a mortgage was a tenant during the redemption period under a lease of any
duration, and the lease began after the date the mortgage was executed, but prior to the
expiration of the time for redemption, the immediate successor in interest must provide
at least 90 days' written notice to vacate, given no sooner than the date of the expiration
of the time for redemption, and effective no sooner than 90 days after the date of the
expiration of the time for redemption, provided that the tenant pays the rent and abides
by all terms of the lease.
new text end

new text begin (b) For any eviction action commenced on or before December 31, 2012, where the
term of a bona fide lease extends more than 90 days beyond the date of the expiration of the
time for redemption, the immediate successor in interest must allow the tenant to occupy
the premises until the end of the remaining term of the lease, and provide at least 90 days'
written notice to vacate, effective no sooner than the date the lease expires, provided that
the tenant pays the rent and abides by all terms of the lease, except if the immediate
successor in interest or an immediate subsequent bona fide purchaser will occupy the unit
as the primary residence, the immediate successor in interest must provide at least 90 days'
written notice to vacate, given no sooner than the date of the expiration of the time for
redemption, effective no sooner than 90 days after the date of the expiration of the time for
redemption, provided that the tenant pays the rent and abides by all terms of the lease.
new text end

new text begin For purposes of this section, a "bona fide lease" means:
new text end

new text begin (1) the mortgagor or the child, spouse, or parent of the mortgagor is not the tenant;
new text end

new text begin (2) the lease or tenancy was the result of an arm's-length transaction; and
new text end

new text begin (3) the lease or tenancy requires the receipt of rent that is not substantially less than
fair market rent for the property or the unit's rent is reduced or subsidized by a federal,
state, or local subsidy.
new text end

new text begin (c) For any eviction action commenced on or before December 31, 2012, in the case
of a tenancy subject to section 8 of the United States Housing Act of 1937, as amended,
where the term of the lease extends more than 90 days beyond the date of the expiration
of the time for redemption, the immediate successor in interest must allow the tenant to
occupy the premises until the end of the remaining term of the lease and provide at least
90 days' written notice to vacate, effective no sooner than the date the lease expires,
provided that the tenant pays the rent and abides by all terms of the lease, except if
the immediate successor in interest will occupy the unit as the primary residence, the
immediate successor in interest must provide at least 90 days' written notice to vacate,
given no sooner than the date of the expiration of the time for redemption, effective no
sooner than 90 days after the date of the expiration of the time for redemption, provided
that the tenant pays the rent and abides by all terms of the lease.
new text end

Sec. 12.

Minnesota Statutes 2008, section 504B.285, is amended by adding a
subdivision to read:


new text begin Subd. 1b. new text end

new text begin Grounds when the person holding over is a tenant in a property
subject to a contract for deed.
new text end

new text begin For any eviction action commenced on or before
December 31, 2012, the person entitled to the premises may recover possession by
eviction when any person holds over real property after termination of contract to convey
the property, provided that if the person holding the real property after the expiration of
the time for termination was a tenant during the termination period under a lease of any
duration and the lease began after the date the contract for deed was executed but prior to
the expiration of the time for termination, and the person has received:
new text end

new text begin (1) at least two months' written notice to vacate no sooner than one month after the
expiration of the time for termination, provided that the tenant pays the rent and abides by
all terms of the lease; or
new text end

new text begin (2) at least two months' written notice to vacate no later than the date of the expiration
of the time for termination, which notice shall also state that the sender will hold the tenant
harmless for breaching the lease by vacating the premises if the contract is reinstated.
new text end

Sec. 13.

Minnesota Statutes 2008, section 504B.285, is amended by adding a
subdivision to read:


new text begin Subd. 1c. new text end

new text begin Grounds for evictions on or after January 1, 2013. new text end

new text begin For any eviction
action commenced on or after January 1, 2013, the person entitled to the premises
may recover possession by eviction when any person holds over real property after the
expiration of the time for redemption on foreclosure of a mortgage, or after termination
of contract to convey the property, provided that if the person holding the real property
after the expiration of the time for redemption or termination was a tenant during the
redemption or termination period under a lease of any duration, and the lease began after
the date the mortgage or contract for deed was executed, but prior to the expiration of the
time for redemption or termination and the person holding the premises has received:
new text end

new text begin (1) at least two months' written notice to vacate no sooner than one month after the
expiration of the time for redemption or termination, provided that the tenant pays the
rent and abides by all terms of the lease; or
new text end

new text begin (2) at least two months' written notice to vacate no later than the date of the
expiration of the term for redemption or termination, which notice shall also state that
the sender will hold the tenant harmless for breaching the lease by vacating the premise
if the mortgage is redeemed or the contract is reinstated.
new text end

Sec. 14.

Minnesota Statutes 2008, section 504B.291, subdivision 1, is amended to read:


Subdivision 1.

Action to recover.

(a) A landlord may bring an eviction action for
nonpayment of rent irrespective of whether the lease contains a right of reentry clause.
Such an eviction action is equivalent to a demand for the rent. new text beginThere is a rebuttable
presumption that the rent has been paid if the tenant produces a copy or copies of one
or more money orders or produces one or more original receipt stubs evidencing the
purchase of a money order, if the documents: (i) total the amount of the rent; (ii) include
a date or dates approximately corresponding with the date rent was due; and (iii) in the
case of copies of money orders, are made payable to the landlord. This presumption is
rebutted if the landlord produces a business record that shows that the tenant has not paid
the rent. The landlord is not precluded from introducing other evidence that rebuts this
presumption.
new text endIn such an action, unless the landlord has also sought to evict the tenant by
alleging a material violation of the lease under section 504B.285, subdivision 5, the tenant
may, at any time before possession has been delivered, redeem the tenancy and be restored
to possession by paying to the landlord or bringing to court the amount of the rent that is
in arrears, with interest, costs of the action, and an attorney's fee not to exceed $5, and by
performing any other covenants of the lease.

(b) If the tenant has paid to the landlord or brought into court the amount of rent in
arrears but is unable to pay the interest, costs of the action, and attorney's fees required
by paragraph (a), the court may permit the tenant to pay these amounts into court and be
restored to possession within the same period of time, if any, for which the court stays the
issuance of the order to vacate under section 504B.345.

(c) Prior to or after commencement of an action to recover possession for
nonpayment of rent, the parties may agree only in writing that partial payment of rent in
arrears which is accepted by the landlord prior to issuance of the order granting restitution
of the premises pursuant to section 504B.345 may be applied to the balance due and does
not waive the landlord's action to recover possession of the premises for nonpayment of
rent.

(d) Rental payments under this subdivision must first be applied to rent claimed as
due in the complaint from prior rental periods before applying any payment toward rent
claimed in the complaint for the current rental period, unless the court finds that under the
circumstances the claim for rent from prior rental periods has been waived.

Sec. 15.

Minnesota Statutes 2008, section 504B.365, subdivision 4, is amended to read:


Subd. 4.

deleted text beginSecond and Fourth Judicial Districtsdeleted text endnew text begin Motions concerning removal
or storage of personal property
new text end.

deleted text beginIn the Second and Fourth Judicial Districts, the
housing calendar consolidation project
deleted text endnew text begin The court hearing the eviction actionnew text end shall retain
jurisdiction in matters relating to removal of personal property under this section. If the
plaintiff refuses to return the property after proper demand is made as provided in section
504B.271, the court shall enter an order requiring the plaintiff to return the property to the
defendant and awarding reasonable expenses including attorney fees to the defendant.