HF 4670

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/07/2024 02:44pm

A bill for an act
relating to real estate; limiting the exercise of a due-on-sale clause; amending
Minnesota Statutes 2022, sections 58.13, by adding a subdivision; 513.33, by
adding a subdivision.

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

Section 1.

Minnesota Statutes 2022, section 58.13, is amended by adding a subdivision
to read:

new text begin Subd. 3. new text end

new text begin Limitation on exercise of due-on-sale clauses. new text end

new text begin (a) With respect to any loan
secured by residential real property, a lender is prohibited from exercising a due-on-sale
clause upon:
new text end

new text begin (1) a transfer on death deed conveying or assigning the deceased borrower's interest in
the property to a grantee beneficiary;
new text end

new text begin (2) a transfer by devise, descent, or operation of law upon the death of a joint tenant;
new text end

new text begin (3) a transfer by which the borrower's spouse or children become an owner of the
property;
new text end

new text begin (4) a transfer resulting from a dissolution of marriage decree, legal separation agreement,
or from an incidental property settlement agreement, by which the borrower's spouse becomes
an owner of the property; or
new text end

new text begin (5) a transfer into an inter vivos trust by which the borrower is and remains a beneficiary,
and which does not relate to a transfer of occupancy rights in the property.
new text end

new text begin (b) Paragraph (a) does not apply to a reverse mortgage made under section 47.58.
new text end

new text begin (c) Notwithstanding section 58.18, subdivision 4, a person aggrieved by a violation of
this subdivision has a cause of action for equitable relief, reasonable attorney fees, and costs.
new text end

Sec. 2.

Minnesota Statutes 2022, section 513.33, is amended by adding a subdivision to
read:

new text begin Subd. 4. new text end

new text begin Creditor duty to notify debtor of right to repossess. new text end

new text begin Notwithstanding this
section, a creditor who has a contractual right to repossess property and who has accepted
one or more late payments has an affirmative duty to provide advance written notice to a
debtor. The notice must state that, after the date on the notice, strict compliance with the
terms of the agreement is required and failure to strictly comply may result in repossession.
new text end