Minnesota Legislature
SF 2933
as introduced - 93rd Legislature (2023 - 2024) Posted on 03/16/2023 08:40am
Current Version - as introduced
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A bill for an act
relating to real property; providing for mortgage foreclosure redemption and
surpluses; amending Minnesota Statutes 2022, sections 272.45; 580.07, subdivision
1; 580.10; 580.225; 580.24; 580.25; 580.26; 580.28; 582.03, subdivisions 1, 2;
582.043, subdivision 6.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2022, section 272.45, is amended to read:
272.45 TAXES PAID BY TENANT, OCCUPANT, OR OTHER PERSON BECOME
LIEN, UPON NOTICE FILED WITH COUNTY RECORDER OR REGISTRAR OF
TITLES.
When any past due or delinquent tax on land is paid by any occupant, tenant, or person
with deleted text begin andeleted text end new text begin a legal or equitablenew text end interest in the land other than a lien, or a person acting on that
person's behalf, which, by agreement or otherwise, ought to have been paid by the owner,
lessor, or other party in interest, such occupant, tenant, or person may recover by action the
amount which such owner, lessor, or party in interest ought to have paid, with interest
thereon at the rate of 12 percent per annum, or may retain the same from any rent due or
accruing from the person to such owner or lessor for land on which such tax is so paid. A
person making a payment under this section may file with the county recorder or registrar
of titles of the proper county a deleted text begin noticedeleted text end new text begin sworn statementnew text end stating the amount and date of such
payment,new text begin with a copy of the receipt attached,new text end and stating thenew text begin legal or equitablenew text end interest
claimed in the land, with a description of the land against which the taxes were charged;
and the same shall thereupon be a liennew text begin as of the date of recording of the sworn statementnew text end
upon such land in favor of the person paying the same until the same is paid. The county
recorder shall record such deleted text begin noticedeleted text end new text begin sworn statementnew text end in the indices maintained by the county
recorder. The registrar of titles shall record the deleted text begin noticedeleted text end new text begin sworn statementnew text end on the certificate of
title for the land. Upon the payment of any such lien, the person filing such deleted text begin noticedeleted text end new text begin sworn
statementnew text end shall satisfy the same of record.
Sec. 2.
Minnesota Statutes 2022, section 580.07, subdivision 1, is amended to read:
Subdivision 1.
Postponement by mortgagee.
(a) The sale may be postponednew text begin with
reasonable notice to the sheriffnew text end , from time to time, by the party conducting the foreclosure.
The party requesting the postponement must, at the party's expense:
(1) publish, only once, a notice of the postponement and the rescheduled date of the sale,
if known, as soon as practicable, in the newspaper in which the notice under section 580.03
was published; and
(2) send by first class mail to the occupant, postmarked within three business days of
the postponed sale, notice:
(i) of the postponement; and
(ii) if known, of the rescheduled date of the sale and the date on or before which the
mortgagor must vacate the property if the sheriff's sale is not further postponed, the mortgage
is not reinstated under section 580.30, the property is not redeemed under section 580.23,
or the redemption period is not reduced under section 582.032. The notice must state that
the time to vacate the property is 11:59 p.m. on the specified date.
(b) If the rescheduled date of the sale is not known at the time of the initial publication
and notice to the occupant of postponement, the foreclosing party must, at its expense if
and when a new date of sale is scheduled:
(1) publish, only once, notice of the rescheduled date of the sale, as soon as practicable,
in the newspaper in which the notice under section 580.03 and the notice of postponement
under paragraph (a) was published; and
(2) send by first class mail to the occupant, postmarked within ten days of the rescheduled
sale, notice:
(i) of the date of the rescheduled sale; and
(ii) of the date on or before which the mortgagor must vacate the property if the mortgage
is not reinstated under section 580.30 or the property redeemed under section 580.23. The
notice must state that the time to vacate the property is 11:59 p.m. on the specified date.
new text begin
(c) The sheriff may charge a fee of one-half the sheriff's regular fee for conducting a
sheriff's sale for failure to notify the sheriff of a postponement, but the failure does not
invalidate the sale. The fee shall not be an allowable cost under section 580.17.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for sheriff's sales occurring after January
1, 2024.
new text end
Sec. 3.
Minnesota Statutes 2022, section 580.10, is amended to read:
580.10 SURPLUS.
new text begin Subdivision 1. new text end
new text begin Demand for surplus. new text end
In all cases not provided for in section 580.09,new text begin and
except as required by subdivision 3,new text end if, after sale of any real estate, made as herein prescribed,
there remains in the hands of the officer making the sale any surplus money, after satisfying
the mortgage, with interest, taxes paid, and costs of sale, the surplus shall be paid over by
such officer, on demand, to the mortgagor, the mortgagor's legal representatives or assigns.new text begin
A surplus of $100 or greater shall be paid first to junior creditors with liens of record at the
time of the sheriff's sale in order of priority, if demanded by a junior creditor within 120
days of the sale, and thereafter to the owner of record at the time of the sheriff's sale, or as
provided by court order under section 580.28. A demand by a party other than the owner
shall be accompanied by an affidavit stating the amount remaining unpaid and the interest
creating a right to the surplus.
new text end
new text begin Subd. 2. new text end
new text begin Notice of surplus. new text end
new text begin
The sheriff may, at its discretion and with no obligation,
notify the owner and potential creditors that a surplus exists. Upon the request of the sheriff,
the party foreclosing the mortgage shall provide its most recent contact information for the
owner.
new text end
new text begin Subd. 3. new text end
new text begin Request by owner to have surplus held. new text end
new text begin
At any time during the redemption
period, the owner of record at the time of the sheriff's sale may submit a written request to
the sheriff for the surplus to be held for the benefit of that owner and applied to the
redemption amount. If a request to hold is received by the sheriff, the owner of record may
pay the difference between the full redemption amount and surplus amount in order to
redeem. The right to submit a request to hold applies only to the owner at the time of the
sheriff's sale and is not transferable to any subsequent owner.
new text end
new text begin Subd. 4. new text end
new text begin Surplus less than $100. new text end
new text begin
If a surplus remains under $100, the sheriff may pay
the surplus amount to the owner of record at the time of the sheriff's sale.
new text end
new text begin Subd. 5. new text end
new text begin Resolution of competing claims. new text end
new text begin
If the sheriff determines there are competing
claims or that any claim is not meritorious, the sheriff may apply to the court in the county
in which the sale was made and set forth by petition the facts then known to the sheriff, and
the names and addresses of all known claimants to the surplus, at no cost to the sheriff. The
sheriff shall retain the surplus until further order of the court under section 580.28. If a
hearing is scheduled, the sheriff may participate in an advisory capacity. The sheriff shall
be represented by the county attorney. The sheriff shall give notice of the opening of the
court file to the holders of the subject claims by service of the petition in the manner of a
summons under the Rules of Civil Procedure. Failure of a mortgagor or the mortgagor's
legal representative or assign to participate in the court action does not waive the right of
that mortgagor or the mortgagor's legal representative or assign to the surplus.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for all surpluses held by sheriffs on or
after January 1, 2024.
new text end
Sec. 4.
Minnesota Statutes 2022, section 580.225, is amended to read:
580.225 SATISFACTION OF deleted text begin JUDGMENTdeleted text end new text begin MORTGAGEnew text end .
The amount received from foreclosure sale under this chapter is full satisfaction of the
mortgage debt, except as provided in section 582.30.
Sec. 5.
Minnesota Statutes 2022, section 580.24, is amended to read:
580.24 REDEMPTION BY CREDITOR.
(a) If no redemption is made by the mortgagor, the mortgagor's personal representatives
or assigns, the most senior creditor having a legal or equitable lien upon the mortgaged
premises, or some part of it, subsequent to the foreclosed mortgage, may redeem within
deleted text begin sevendeleted text end new text begin 14new text end days after the expiration of the redemption period determined under section 580.23
or 582.032, whichever is applicable; and each subsequent creditor having a lien may redeem,
in the order of priority of their respective liens, within deleted text begin sevendeleted text end new text begin 14new text end days after the time allowed
the prior lienholder by paying the amount required under this section. However, no creditor
is entitled to redeem unless, one week or more prior to the expiration of the period allowed
for redemption by the mortgagor, the creditor:
(1) records with each county recorder and registrar of titles where the foreclosed mortgage
is recorded a notice of the creditor's intention to redeem;
(2) records with each county recorder and registrar of titles where the notice of the
creditor's intention to redeem is recorded all documents necessary to create the lien on the
mortgaged premises and to evidence the creditor's ownership of the lien, including a copy
of any money judgment necessary to create the lien; and
(3) after complying with clauses (1) and (2), delivers to the sheriff who conducted the
foreclosure sale or the sheriff's successor in office a copy of each of the documents required
to be recorded under clauses (1) and (2), with the office, date and time of filing for record
stated on the first page of each document.
The sheriff shall maintain for public inspection all documents delivered to the sheriff
and shall note the date of delivery on each document. The sheriff may charge a fee of $100
for the documents delivered to the sheriff relating to each lien. The sheriff shall maintain
copies of documents delivered to the sheriff for a period of six months after the end of the
mortgagor's redemption period.
(b) Saturdays, Sundays, legal holidays, and the first day following the expiration of the
prior redemption period must be included in computing the deleted text begin seven-daydeleted text end new text begin 14-daynew text end redemption
period. When the last day of the period falls on Saturday, Sunday, or a legal holiday, that
day must be omitted from the computation. The order of redemption by judgment creditors
subsequent to the foreclosed mortgage shall be determined by the order in which their
judgments were entered as memorials on the certificate of title for the foreclosed premises
or docketed in the office of the district court administrator if the property is not registered
under chapter 508 or 508A, regardless of the homestead status of the property. All mechanic's
lienholders who have coordinate liens shall have one combined deleted text begin seven-daydeleted text end new text begin 14-daynew text end period
to redeem.
(c) The amount required to redeem from the holder of the sheriff's certificate of sale is
the amount required under section 580.23. The amount required to redeem from a deleted text begin persondeleted text end new text begin
creditornew text end holding a certificate of redemption is:
(1) the amount paid to redeem as shown on the certificate of redemption; plus
(2) interest on that amount to the date of redemptionnew text begin at the rates stated on the certificate
of sale and the affidavit provided by section 580.25, clause (3), or six percent if no rate is
otherwise statednew text end ; plus
(3) the amount claimed due on the deleted text begin person'sdeleted text end new text begin creditor'snew text end lien, as shown on the affidavit
under section 580.25, clause (3).
new text begin
(d) If the sheriff determines there is a dispute or question of validity about a redemption,
the sheriff may accept the amount required to redeem, together with documents in support
of the redemption, from one or more creditors competing for or claiming a right to redeem,
without executing and delivering a certificate of redemption, and the sheriff may commence
an action under section 580.28 at no cost to the sheriff. A creditor subject to a dispute or
question of validity about a redemption may submit the matter for adjudication of the court
under section 580.28. If the sheriff does not execute and deliver a certificate of redemption
under this section, all further junior creditor redemption periods are stayed until determined
by the court, and all junior creditors who have recorded notices of intent to redeem should
be included in the action under section 580.28.
new text end
The amount required to redeem may be paid to the holder of the sheriff's certificate of
sale or the certificate of redemption, as the case may be, or to the sheriff for the holder.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for all sheriff's sales after January 1,
2024.
new text end
Sec. 6.
Minnesota Statutes 2022, section 580.25, is amended to read:
580.25 new text begin CREDITOR new text end REDEMPTION, HOW MADE.
Redemption shall be made as provided in this section.
The deleted text begin persondeleted text end new text begin creditornew text end desiring to redeem shall pay the amount required by law for the
redemption, and shall produce to the person or officer receiving the redemption payment:
(1) a copy of the docket of the judgment, or of the recorded deed or mortgage, or of the
record or files evidencing any other lien under which the deleted text begin persondeleted text end new text begin creditornew text end claims a right to
redeem;
(2) a copy of any recorded assignment necessary to evidence the deleted text begin person'sdeleted text end new text begin creditor'snew text end
ownership of the lien. If the redemption is under an assignment of a judgment, the assignment
shall be filed in the court entering the judgment, as provided by law, and the deleted text begin persondeleted text end new text begin creditornew text end
so redeeming shall produce a copy of it and of the record of its filing, and the copy of the
docket shall show that the proper entry was made upon the docket. No further evidence of
the assignment of the judgment is required unless the mortgaged premises or part of it is
registered property, in which case the judgment and all assignments of the judgment must
be entered as a memorial upon the certificate of title to the mortgaged premises and a copy
of the judgment and each assignment with the certificate of record endorsed on it must be
produced; and
deleted text begin
(3) an affidavit of the person or the person's agent, showing the amount then actually
claimed due on the person's lien and required to be paid on the lien in order to redeem from
the person. Additional fees and charges may be claimed due only as provided in section
582.03.
deleted text end
new text begin
(3) an original affidavit of the creditor or the creditor's agent, identifying the lien under
which the creditor claims a right to redeem and stating the amount then actually claimed
due and owing on the lien and stating the interest rate on the lien. Additional fees and charges
may be claimed due only as provided in section 582.03. The sheriff receiving the affidavit
may furnish a copy of the affidavit to any interested party, upon request.
new text end
If redemption is made to the sheriff, the sheriff may charge a fee of $250 for issuing the
certificate of redemption and any related service. No other fee may be charged by the sheriff
for a redemption.
Within 24 hours after a redemption is made,new text begin or as soon as reasonably possible,new text end the person
redeeming shall cause the documents so required to be produced to be recorded with the
county recorder, or registrar of titles,new text begin or both, as appropriate,new text end who may receive fees as
prescribed in section 357.18 or 508.82. If the redemption is made at any place other than
the county seat, it is sufficient forthwith to deposit the documents in the nearest post office,
addressed to the recorder or registrar of titles, with the postage prepaidnew text begin within 24 hours after
redemption is made, or as soon as reasonably possiblenew text end . A person recording documents
produced for redemption shall, on the same day, deliver copies of the documents to the
sheriff for public inspection. The sheriff may receive a fee of $20 for the documents delivered
following a redemption. The sheriff shall note the date of delivery on the documents and
shall maintain for public inspection all documents delivered to the sheriff for a period of
six months after the end of the mortgagor's redemption period.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for redemptions occurring after January
1, 2024.
new text end
Sec. 7.
Minnesota Statutes 2022, section 580.26, is amended to read:
580.26 CERTIFICATE OF REDEMPTION; RECORD.
The person or officer from whom such redemption is made shall make and deliver to
the person redeeming a certificate executed and acknowledged in the same manner as a
conveyance, containing:
deleted text begin
(1) the name of the person redeeming, and the amount paid by the person on such
redemption;
deleted text end
new text begin
(1) if redeemed during the mortgagor's redemption period under section 580.23, the
name of the mortgagor or the mortgagor's legal representative or assign redeeming, as
appropriate, and if redeemed by a creditor holding a lien, the name of the creditor redeeming
and the amount paid to redeem;
new text end
(2) a description of the sale for which such redemption is made, and of the property
redeemed;
(3) a statement of the claim upon which such redemption is made and, if upon a lien,
the amount claimed to be due thereon at the date of redemption.
If redemption is made by the owner of the property sold, the owner's heirs, personal
representatives, or assigns, such certificate shall be recorded within deleted text begin four daysdeleted text end new text begin one weeknew text end
after the expiration of the period allowed by law to the owner for redemption and, if made
by a creditor holding a lien, the certificate shall be recorded within deleted text begin four daysdeleted text end new text begin one weeknew text end after
such redemption. Unless so recorded, the certificate shall be void deleted text begin asdeleted text end new text begin onlynew text end against any person
in good faith redeeming from the same person or lien.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for redemptions occurring after January
1, 2024.
new text end
Sec. 8.
Minnesota Statutes 2022, section 580.28, is amended to read:
580.28 ACTION TO SET ASIDE MORTGAGE; FORECLOSURE; REDEMPTION.
When an action is brought wherein it is claimed that any mortgage as to the plaintiff or
person for whose benefit the action is brought is fraudulent or void, or has been paid or
discharged, in whole or in part, or the relative priority or the validity of liensnew text begin or redemption
rightsnew text end is disputed, if such mortgage has been foreclosed by advertisement, and the time for
redemption from the foreclosure sale will expire before final judgment in such action, the
plaintiff or beneficiary having the right to redeem, for the purpose of saving such right in
case the action fails, may deposit with the sheriff before the time of redemption expires the
amount for which the mortgaged premises were sold, with interest thereon to the time of
deposit, together with deleted text begin a bond to the holder of the sheriff's certificate of sale, in an amount
and with sureties to be approved by the sheriff, conditioned to pay all interest that may
accrue or be allowed on such deposit if the action faildeleted text end new text begin a separate deposit with the sheriff of
one year's interest on the amount depositednew text end . The person shall, in writing, notify such sheriff
that deleted text begin the person claims the mortgage to be fraudulent or void, or to have been paid or
discharged, in whole or in part, as the case may be, and thatdeleted text end such action is pending, and
direct the sheriff to retain such money deleted text begin and bonddeleted text end until final judgmentdeleted text begin . In case such action
failsdeleted text end new text begin or other order of the court. If so ordered by the courtnew text end , such deposit shall operate as a
redemption of the premises from such foreclosure sale, and entitle the plaintiff to a certificate
thereof. Such foreclosure, deposit, deleted text begin bond,deleted text end and notice shall be brought to the attention of the
court by supplemental complaint in the action, and the judgment shall determine the validity
of the foreclosure sale, and the rights of the parties to the moneys deleted text begin and bonddeleted text end so deposited,
which shall be paid and delivered by the sheriff as directed by such judgment upon delivery
to the sheriff of a certified copy thereof. The remedy herein provided shall be in addition
to other remedies now existing.
Sec. 9.
Minnesota Statutes 2022, section 582.03, subdivision 1, is amended to read:
Subdivision 1.
Allowable costs collectable upon redemption.
The holder of any sheriff's
certificate of sale, from a foreclosure by advertisement or action of a mortgage or lien or
execution, or the holder of any certificate of redemption as a junior creditor during the
period of redemption, may pay and claim the following on redemption: any taxes or
assessments on which any penalty would otherwise accrue, and any costs of a hazard
insurance policy for the holder's interest in the mortgaged premises incurred for the period
of holding the sheriff's certificate, any costs incurred when an order to reduce a mortgagor's
redemption period under section 582.032 is entered, including costs and disbursements
awarded under section 582.032, subdivision 9, any fees paid to the county recorder, registrar
of titles, or sheriff to obtain or record the certificates of sale or redemption or notices of
intention to redeem, any reasonable fees paid to licensed real estate brokers for broker price
opinions or to licensed appraisers for appraisals, any deed tax paid to file a certificate of
redemption, reasonable attorney fees incurred after the foreclosure sale not to exceed one-half
of the amount authorized by section 582.01, any costs incurred under section 582.031, and
any interest or installment of principal upon any prior or superior mortgage, lien, or contract
for deed in default or that becomes due during the period of redemption. In all such cases,
the costs so paid and claimed due, with interestnew text begin from the date of payment at the rate stated
in the certificate of sale or at six percent if no rate is statednew text end , shall be a part of the sum required
to be paid to redeem from such sale. No other costs, fees, interest, or other amount may be
added to the amount necessary to redeem.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for affidavits filed with the sheriff after
January 1, 2024.
new text end
Sec. 10.
Minnesota Statutes 2022, section 582.03, subdivision 2, is amended to read:
Subd. 2.
Affidavit of allowable costs.
Any payments made and claimed due under
subdivision 1 shall be proved by the affidavit of the holder of the sheriff's certificate or its
agent or attorney, itemizing each of the allowable costsnew text begin and the date of paymentnew text end and
describing the premises. The affidavit must be filed with the sheriff of the county in which
the sale was held at any time prior to expiration of the mortgagor's redemption period. Upon
written request by the sheriff, the holder of the sheriff's certificate or certificate of redemption
shall provide an affidavit of allowable costs to the sheriff within seven days of the date of
the request by the sheriff. If the mortgagor does not redeem within seven days after the
affidavit is filed, the holder of the sheriff's certificate may file a supplemental affidavit if
additional allowable costs are incurred during the redemption period. If the holder of the
sheriff's certificate or certificate of redemption fails to respond to the sheriff's request within
seven days, the sheriff may calculate a redemption amount pursuant to section 580.23,
subdivision 1, and issue a certificate of redemption for that amount. If the time allowed to
redeem is less than seven days from the expiration of the redemption period, the sheriff
shall make a reasonable effort to request the affidavit of allowable costs in writing from the
holder of the sheriff's certificate, its agent, or attorney before issuing a certificate of
redemption. If the affidavit of allowable costs is not provided more than one business day
before the expiration of the redemption period, at any time one business day or less before
the expiration of the redemption period, the sheriff may calculate a redemption amount
pursuant to section 580.23, subdivision 1, and issue a certificate of redemption for that
amount. The amount calculated by the sheriff, absent malfeasance by the sheriff, binds the
holder of the sheriff's certificate even if the amount calculated by the sheriff is less than the
actual amount due.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for affidavits filed with the sheriff after
January 1, 2024.
new text end
Sec. 11.
Minnesota Statutes 2022, section 582.043, subdivision 6, is amended to read:
Subd. 6.
Dual tracking.
(a) If the servicer has received a loss mitigation application and
the subject mortgage loan has not already been referred to an attorney for foreclosure, a
servicer shall not refer the subject mortgage loan to an attorney for foreclosure while the
mortgagor's application is pending, unless:
(1) the servicer determines that the mortgagor is not eligible for any loss mitigation
option, the servicer informs the mortgagor of the determination in writing, and the applicable
appeal period has expired without an appeal or the appeal has been properly denied;
(2) where a written offer is made and a written acceptance is required, the mortgagor
fails to accept the loss mitigation offer within the time frame specified in the offer or within
14 days after the date of the offer, whichever is longer; or
(3) the mortgagor declines the loss mitigation offer in writing.
(b) If the servicer receives a loss mitigation application after the subject mortgage loan
has been referred to an attorney for foreclosure, but before a foreclosure sale has been
scheduled, a servicer shall not move for an order of foreclosure, seek a foreclosure judgment,
or conduct a foreclosure sale unless:
(1) the servicer determines that the mortgagor is not eligible for a loss mitigation option,
the servicer informs the mortgagor of this determination in writing, and the applicable appeal
period has expired without an appeal or the appeal has been properly denied;
(2) where a written offer is made and a written acceptance is required, the mortgagor
fails to accept the loss mitigation offer within the time frame specified in the offer or within
14 days after the date of the offer, whichever is longer; or
(3) the mortgagor declines a loss mitigation offer in writing.
(c) If the servicer receives a loss mitigation application after the foreclosure sale has
been scheduled, but before midnight of the seventh business day prior to the foreclosure
sale date, the servicer must halt the foreclosure sale and evaluate the application. If required
to halt the foreclosure sale and evaluate the application, the servicernew text begin may postpone the
foreclosure sale under section 580.07, subdivision 1, butnew text end must not move for an order of
foreclosure, seek a foreclosure judgment, or conduct a foreclosure sale unless:
(1) the servicer determines that the mortgagor is not eligible for a loss mitigation option,
the servicer informs the mortgagor of this determination in writing, and the applicable appeal
period has expired without an appeal or the appeal has been properly denied;
(2) where a written offer is made and a written acceptance is required, the mortgagor
fails to accept the loss mitigation offer within the time frame specified in the offer or within
14 days after the date of the offer, whichever is longer; or
(3) the mortgagor declines a loss mitigation offer in writing.
(d) A servicer shall not move for an order of foreclosure or conduct a foreclosure sale
under any of the following circumstances:
(1) the mortgagor is in compliance with the terms of a trial or permanent loan
modification, or other loss mitigation option; or
(2) a short sale has been approved by all necessary parties and proof of funds or financing
has been provided to the servicer.