SF 2908

1st Unofficial Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

1.1A bill for an act

1.2relating to landlord and tenant; providing for certain notices relating to
1.3foreclosure;amending Minnesota Statutes 2006, sections 504B.151; 504B.178,
1.4subdivision 8; 504B.285, subdivision 1.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6    Section 1. Minnesota Statutes 2006, section 504B.151, is amended to read:
1.7504B.151 RESTRICTION ON RESIDENTIAL LEASE TERMS FOR
1.8BUILDINGS IN FINANCIAL DISTRESS; REQUIRED NOTICE OF PENDING
1.9FORECLOSURE.
1.10    Subdivision 1. Limitation on lease and notice to tenant. (a) Once a landlord
1.11has received notice of a contract for deed cancellation under section 559.21 or notice of
1.12a mortgage foreclosure sale under chapter 580 or 582, the landlord may only enter into
1.13(i) a periodic residential lease agreement with a term of not more than two months or
1.14the time remaining in the contract cancellation period or the mortgagor's redemption
1.15period, whichever is less or (ii) a fixed term residential tenancy not extending beyond the
1.16cancellation period or the landlord's period of redemption until:
1.17(1) the contract for deed has been reinstated or paid in full;
1.18(2) the mortgage default has been cured and the mortgage reinstated;
1.19(3) the mortgage has been satisfied;
1.20(4) the property has been redeemed from a foreclosure sale; or
1.21(5) a receiver has been appointed.
1.22(b) Before entering into a lease under this section and accepting any rent or security
1.23deposit from a tenant, the landlord must notify the prospective tenant in writing that the
1.24landlord has received notice of a contract for deed cancellation or notice of a mortgage
2.1foreclosure sale as appropriate, and the date on which the contract cancellation period or
2.2the mortgagor's redemption period ends.
2.3(c) This section does not apply to a manufactured home park as defined in section
2.4327C.01, subdivision 5 .
2.5    Subd. 2. Exception allowing a longer term lease. This section does not apply if:
2.6(1) the holder or the mortgagee agrees not to terminate the tenant's lease other than
2.7for lease violations for at least one year from the commencement of the tenancy; and
2.8(2) the lease does not require the tenant to prepay rent for any month commencing
2.9after the end of the cancellation or redemption period, so that the rent payment would be
2.10due prior to the end of the cancellation or redemption period.
2.11For the purposes of this section, a holder means a contract for deed vendor or a
2.12holder of the sheriff's certificate of sale or any assignee of the contract for deed vendor or
2.13of the holder of the sheriff's certificate of sale.
2.14    Subd. 3. Transfer of tenancy by operation of law. (a) A tenant who enters into a
2.15lease under subdivision 2 is:
2.16(1) deemed by operation of law to become the tenant of the holder immediately upon
2.17the holder succeeding to the interest of the landlord under the lease; and
2.18(2) bound to the holder under all the provisions of the lease for either the balance of
2.19the lease term or for one year after the start of the tenancy, whichever occurs first.
2.20(b) A tenant who becomes the tenant of the holder under this subdivision is not
2.21obligated to pay rent to the holder until the holder mails, by first class mail to the tenant at
2.22the property address, written notice that the holder has succeeded to the interest of the
2.23landlord. A letter from the holder to the tenant to that effect is prima facie evidence that
2.24the holder has succeeded to the interest of the landlord.
2.25    Subd. 4. Holder not bound by certain acts. A holder succeeding to an interest in a
2.26lease lawfully entered into under subdivision 2 is not: (1) liable for any act or omission
2.27of any prior landlord; (2) subject to any offset or defense which the tenant had against
2.28any prior landlord; or (3) bound by any modification of the lease entered into under
2.29subdivision 2, unless the modification is made with the holder's consent.

2.30    Sec. 2. Minnesota Statutes 2006, section 504B.178, subdivision 8, is amended to read:
2.31    Subd. 8. Withholding rent. No tenant may withhold payment of all or any portion
2.32of rent for the last payment period of a residential rental agreement, except an oral or
2.33written month to month residential rental agreement concerning which neither the tenant
2.34nor landlord has served a notice to quit, or for the last month of a contract for deed
2.35cancellation period under section 559.21 or a mortgage foreclosure redemption period
3.1under chapter 580 or 582, on the grounds that the deposit should serve as payment for the
3.2rent. Withholding all or any portion of rent for the last payment period of the residential
3.3rental agreement creates a rebuttable presumption that the tenant withheld the last payment
3.4on the grounds that the deposit should serve as payment for the rent. Any tenant who
3.5remains in violation of this subdivision after written demand and notice of this subdivision
3.6shall be liable to the landlord for the following:
3.7(1) a penalty in an amount equal to the portion of the deposit which the landlord
3.8is entitled to withhold under subdivision 3 other than to remedy the tenant's default in
3.9the payment of rent; and
3.10(2) interest on the whole deposit as provided in subdivision 2, in addition to the
3.11amount of rent withheld by the tenant in violation of this subdivision.

3.12    Sec. 3. Minnesota Statutes 2006, section 504B.285, subdivision 1, is amended to read:
3.13    Subdivision 1. Grounds. The person entitled to the premises may recover
3.14possession by eviction when:
3.15(1) any person holds over real property:
3.16(i) after a sale of the property on an execution or judgment; or
3.17(ii) on foreclosure of a mortgage and after the expiration of the time for redemption;
3.18on foreclosure of a mortgage, or
3.19(iii) after termination of contract to convey the property, provided that if the person
3.20holding the real property after the expiration of the time for redemption or termination
3.21is was a tenant during the redemption or termination period, the person entered into the
3.22lease of any duration after the date of the notice of mortgage foreclosure or contract for
3.23deed cancellation and prior to the expiration of the time for redemption or termination,
3.24and the person has received:
3.25(A) at least one month's two months' written notice to vacate no sooner than one
3.26month after the expiration of the time for redemption or termination, provided that the
3.27tenant pays the rent and abides by all terms of the lease; or
3.28(B) at least one month's two months' written notice to vacate no later than the date of
3.29the expiration of the time for redemption or termination, which notice shall also state that
3.30the sender will hold the tenant harmless for breaching the lease by vacating the premises
3.31if the mortgage is redeemed or the contract is reinstated;
3.32(2) any person holds over real property after termination of the time for which
3.33it is demised or leased to that person or to the persons under whom that person holds
3.34possession, contrary to the conditions or covenants of the lease or agreement under which
4.1that person holds, or after any rent becomes due according to the terms of such lease or
4.2agreement; or
4.3(3) any tenant at will holds over after the termination of the tenancy by notice to quit.