SF 3617

as introduced - 91st Legislature (2019 - 2020) Posted on 02/27/2020 02:58pm

A bill for an act
relating to civil law; requiring court notice to persons holding liens in tenant remedy
actions; amending attorney fee award limitations and lien priority in tenant remedy
actions; repealing certain requirements in tenant remedy actions for appointment
of administrators; amending Minnesota Statutes 2018, sections 504B.401, by
adding a subdivision; 504B.425; 504B.445, subdivisions 3, 4, by adding a
subdivision; repealing Minnesota Statutes 2018, section 504B.445, subdivision 8.

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

Section 1.

Minnesota Statutes 2018, section 504B.401, is amended by adding a subdivision
to read:

new text begin Subd. 3. new text end

new text begin Lien holder notification. new text end

new text begin The petitioner shall provide written notice to all lien
holders of:
new text end

new text begin (1) a copy of the complaint;
new text end

new text begin (2) the time and place of the hearing; and
new text end

new text begin (3) information relative to section 504B.445, subdivision 4.
new text end

new text begin Lien holders are not required to be present or to participate in the hearing.
new text end

Sec. 2.

Minnesota Statutes 2018, section 504B.425, is amended to read:

504B.425 JUDGMENT.

(a) If the court finds that the complaint in section 504B.395 has been proved, it may, in
its discretion, take any of the actions described in paragraphs (b) to (g), either alone or in
combination.

(b) The court may order the landlord to remedy the violation or violations found by the
court to exist if the court is satisfied that corrective action will be undertaken promptly.

(c) The court may order the residential tenant to remedy the violation or violations found
by the court to exist and deduct the cost from the rent subject to the terms as the court
determines to be just.

(d) The court may appoint an administrator with powers described in section 504B.445,
and:

(1) direct that rents due:

(i) on and from the day of entry of judgment, in the case of petitioning residential tenants
or housing-related neighborhood organizations; and

(ii) on and from the day of service of the judgment on all other residential and commercial
tenants of the residential building, if any,

shall be deposited with the administrator appointed by the court; deleted text begin and
deleted text end

(2) direct that the administrator use the rents collected to remedy the violations found
to exist by the court by paying the debt service, taxes, and insurance, and providing the
services necessary to the ordinary operation and maintenance of the residential building
which the landlord is obligated to provide but fails or refuses to provide deleted text begin . deleted text end new text begin ; and
new text end

new text begin (3) notify all lien holders of the appointment.
new text end

(e) The court may find the extent to which any uncorrected violations impair the
residential tenants' use and enjoyment of the property contracted for and order the rent
abated accordingly. If the court enters judgment under this paragraph, the parties shall be
informed and the court shall determine the amount by which the rent is to be abated.

(f) After termination of administration, the court may continue the jurisdiction of the
court over the residential building for a period of one year and order the landlord to maintain
the residential building in compliance with all applicable state, county, and city health,
safety, housing, building, fire prevention, and housing maintenance codes.

(g) The court may grant any other relief it deems just and proper, including a judgment
against the landlord for reasonable attorney fees, not to exceed $500, in the case of a
prevailing residential tenant or neighborhood organization. The $500 limitation does not
apply new text begin to complaints that result in an administrator being appointed under section 504B.445, new text end
to awards made under section 549.211 new text begin , new text end or other specific statutory authority.

Sec. 3.

Minnesota Statutes 2018, section 504B.445, subdivision 3, is amended to read:

Subd. 3.

Expenses.

The court may allow a reasonable amount for the services of
administrators and the expense of the administration from rent money. When the
administration terminates, the court may enter judgment against the landlord in a reasonable
amount for the services and expenses incurred by the administrator new text begin , including reasonable
attorney fees new text end .

Sec. 4.

Minnesota Statutes 2018, section 504B.445, subdivision 4, is amended to read:

Subd. 4.

Powers.

The administrator may:

(1) collect rents from residential and commercial tenants, evict residential and commercial
tenants for nonpayment of rent or other cause, enter into leases for vacant dwelling units,
rent vacant commercial units with the consent of the landlord, and exercise other powers
necessary and appropriate to carry out the purposes of sections 504B.381 and 504B.395 to
504B.471;

(2) contract for the reasonable cost of materials, labor, and services including utility
services provided by a third party necessary to remedy the violation or violations found by
the court to exist and for the rehabilitation of the property to maintain safe and habitable
conditions over the useful life of the property, and disburse money for these purposes from
funds available for the purpose;

(3) provide services to the residential tenants that the landlord is obligated to provide
but refuses or fails to provide, and pay for them from funds available for the purpose;

(4) petition the court, after notice to the parties, for an order allowing the administrator
to encumber the property to secure funds new text begin , including but not limited to third-party financing, new text end
to the extent necessary to cover the costs described in clause (2), including reasonable fees
for the administrator's services, and to pay for the costs from funds derived from the
encumbrance; and

(5) petition the court, after notice to the parties, for an order allowing the administrator
to receive funds made available for this purpose by the federal or state governing body or
the municipality to the extent necessary to cover the costs described in clause (2) and pay
for them from funds derived from this source.

The municipality shall recover disbursements under clause (5) by special assessment on
the real estate affected, bearing interest at the rate determined by the municipality, but not
to exceed the rate established for finance charges for open-end credit sales under section
334.16, subdivision 1, clause (b). The assessment, interest, and any penalties shall be
collected as are special assessments made for other purposes under state statute or municipal
charter.

Sec. 5.

Minnesota Statutes 2018, section 504B.445, is amended by adding a subdivision
to read:

new text begin Subd. 4a. new text end

new text begin Lien priority. new text end

new text begin A lien resulting from any encumbrance allowed by the court
pursuant to the request of the administrator under subdivision 4, clause (4), is prior to all
other liens and encumbrances on the property.
new text end

Sec. 6. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2018, section 504B.445, subdivision 8, new text end new text begin is repealed.
new text end

APPENDIX

Repealed Minnesota Statutes: 20-6080

504B.445 ADMINISTRATOR.

Subd. 8.

Dwelling's economic viability.

In considering whether to grant the administrator funds under subdivision 4, the court must consider factors relating to the long-term economic viability of the dwelling, including:

(1) the causes leading to the appointment of an administrator;

(2) the repairs necessary to bring the property into code compliance;

(3) the market value of the property; and

(4) whether present and future rents will be sufficient to cover the cost of repairs or rehabilitation.