SF 2595

2nd Engrossment - 86th Legislature (2009 - 2010) Posted on 03/18/2010 12:03pm

A bill for an act
relating to landlord and tenant; modifying certain procedures related to
expungement in eviction cases; specifying procedures for handling applicant
screening fees; providing certain rights to tenants of foreclosed properties;
amending Minnesota Statutes 2008, sections 484.014, subdivision 3; 504B.111;
504B.173; 504B.178, subdivision 7; 504B.215, subdivision 2; 504B.285,
by adding subdivisions; 504B.291, subdivision 1; 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
deleted text begin 1, clause (1) deleted text end new text begin 1a, 1b, or 1c new text end , 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 begin 1 deleted text end deleted text begin ,
clause (1) deleted text end new text begin 1a or 1b new text end , to vacate on a date prior to commencement of the eviction case.

Sec. 2.

Minnesota Statutes 2008, section 504B.111, is amended to read:

504B.111 WRITTEN LEASE REQUIRED; PENALTY.

new text begin (a) new text end A landlord of a residential building with 12 or more residential units must have a
written lease for each unit rented to a residential tenant. Notwithstanding any other state
law or city ordinance to the contrary, a landlord may ask for the tenant's full name and
date of birth on the lease and application. A landlord who fails to provide a lease, as
required under this section, is guilty of a petty misdemeanor.

new text begin (b) 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 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 interest. For purposes of this paragraph, the "due date" does
not include a date earlier than the date contained in the written or oral agreement to lease
by which, if the rent is paid, the tenant earns a discount.
new text end

Sec. 3.

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. 4.

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 an 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 August 1, 2011, for leases entered
on or after that date.
new text end

Sec. 5.

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

504B.173 APPLICANT SCREENING deleted text begin FEE deleted text end .

Subdivision 1.

deleted text begin Limit on number of applicant screening fees deleted text end new text begin Limitations new text end .

A
landlord deleted text begin or the landlord's agent deleted text end may not new 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 time new 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
entire 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 previous 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 new text end new text begin that is not used for those purposes new text end .

new text begin (c) new text end The new text begin applicant new text end screening 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.

deleted text begin A deleted text end new text begin (a) If a new text end landlord deleted text begin or the landlord's agent,
prior to taking deleted text end new text begin takes new text end an deleted text begin application deleted text end new text begin applicant screening new text end fee from a prospective tenant,
new text begin the landlord new text end must disclose deleted text begin on the application form or orally deleted text end new text begin in writing prior to taking the
applicant screening fee:
new text end

new text begin (1) new text end the name, address, and telephone number of the tenant screening service the
deleted text begin owner deleted text end new text begin landlord new text end will use, unless the deleted text begin owner deleted text end new text begin landlord new text end does not use a tenant screening service new text begin ;
and
new text end

new text begin (2) the criteria on which the decision to rent to the prospective tenant will be based new text end .

new text begin (b) A landlord may include in the application form a requirement that the applicant
declare whether the applicant does not meet any of the disclosed criteria.
new text end

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

Subd. 4.

Remedies.

In addition to any other remedies, a landlord who violates this
section is liable to the applicant for the deleted text begin application deleted text end new text begin applicant screening new 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 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. 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 $200 deleted text end new text begin $500 new 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 2, is amended to read:

Subd. 2.

Single-meter utility service payments.

Except as provided in
subdivision 3, the landlord of a single-metered residential building shall be the bill payer
responsible, and shall be the customer of record contracting with the utility for utility
services. The landlord must advise the utility provider that the utility services apply
to a single-metered residential building. A failure by the landlord to comply with this
subdivision new text begin or subdivision 2a new text end is a violation of sections 504B.161, subdivision 1, clause
(1), and 504B.221. This subdivision may not be waived by contract or otherwise. This
subdivision does not require a landlord to contract and pay for utility service provided
to each residential unit through a separate meter which accurately measures that unit's
use only. This subdivision does not prohibit a landlord from apportioning utility service
payments among residential units and either including utility costs in a unit's rent or
billing for utility charges separate from rent.

Sec. 8.

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 property deleted 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. 9.

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. 10.

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 foreclosed
property subject to a contract for deed. new text end

new text begin 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 termination of a contract to convey the property was a tenant during the
termination period under a lease of any duration, and the lease began after the contract for
deed was executed, but prior to the expiration of the time for termination, the successor
in interest must provide at least two months' written notice to vacate, given no sooner
than the date of the expiration of the time for termination and effective no sooner than
two months after the date of the expiration of the time for termination, provided that the
tenant pays the rent and abides by all terms of the lease.
new text end

Sec. 11.

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 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.
new text end

Sec. 12.

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 begin There is a rebuttable
presumption that the rent has been paid if the tenant produces a copy of a money order or
an original receipt stub evidencing purchase of a money order, or a combination of money
orders made payable to the landlord and totaling the amount of the rent, with a date or
dates approximately corresponding with the date the rent was due. 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 end In 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.