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SF 440

1st Engrossment - 92nd Legislature (2021 - 2022) Posted on 05/27/2021 11:44am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - 1st Engrossment

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A bill for an act
relating to real property; clarifying ownership definitions; requiring the record
owner to be listed as grantee in tax-forfeited land sales; amending Minnesota
Statutes 2020, sections 282.301; 325N.01; 325N.02; 325N.03; 325N.04; 325N.06;
325N.10, subdivisions 2, 3, 4, 5, 7; proposing coding for new law in Minnesota
Statutes, chapter 282.

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

Section 1.

Minnesota Statutes 2020, section 282.301, is amended to read:


282.301 RECEIPTS FOR PAYMENTSnew text begin; CERTIFICATION BY COUNTY
AUDITOR
new text end.

When any sale has been made under sections 282.012 and 282.241 to 282.324, the
purchaser shall receive from the county auditor at the time of repurchase a receipt, in such
form as may be prescribed by the attorney general. When the purchase price of a parcel of
land shall be paid in full, the following facts shall be certified by the county auditor to the
commissioner of revenue of the state of Minnesota: the description of landdeleted text begin, the date of sale,
the name of the purchaser or the purchaser's assignee,
deleted text end and the date when the final installment
of the purchase price was paid. deleted text beginUpon payment in full of the purchase price, the purchaser
or the assignee shall receive a quitclaim deed from the state, to be executed by the
commissioner of revenue. The deed must be sent to the county auditor who shall have it
recorded before it is forwarded to the purchaser. Failure to make any payment herein required
shall constitute default and upon such default and cancellation in accord with section 282.40,
the right, title and interest of the purchaser or the purchaser's heirs, representatives, or assigns
in such parcel shall terminate.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021, and applies to repurchases
approved on or after that date.
new text end

Sec. 2.

new text begin [282.302] CONVEYANCE OF DEED UPON CERTIFICATION.
new text end

new text begin Subdivision 1. new text end

new text begin Conveyance to record owner. new text end

new text begin Except as provided in subdivision 2, upon
receipt of the certification by the county auditor required under section 282.301, the
commissioner of revenue must issue a quitclaim deed in the name of the state, as grantor,
to the record owner of the property at the time of the expiration of the redemption period
established under section 281.23.
new text end

new text begin Subd. 2. new text end

new text begin Sales to personal representatives, heirs, or devisees. new text end

new text begin Notwithstanding
subdivision 1, the state deed must name the record owner's estate as grantee if a sale
conducted under section 282.01 is made to a personal representative, heir, or devisee of the
record owner, and the record owner is either deceased at the time of the expiration of
redemption period established under section 281.23 or is deceased at the time the certification
of payment under section 282.301 is made. If the record owner's estate has not been opened
in a probate court of this state at the time of execution of the state deed, the state deed to
the record owner's estate is deemed an effective conveyance to the estate upon opening of
the estate.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021, and applies to repurchases
approved on or after that date.
new text end

Sec. 3.

new text begin [282.303] ASSIGNMENT OF INSTALLMENT CONTRACT.
new text end

new text begin If the record owner at the time of the expiration of redemption assigns an installment
contract used to repurchase, and the assignment was registered or recorded, the state deed
must name the assignee as the grantee.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021, and applies to repurchases
approved on or after that date.
new text end

Sec. 4.

new text begin [282.304] RECORDATION OF DEED; DEFAULT.
new text end

new text begin (a) The quitclaim deed issued under section 282.302 must be electronically recorded or
sent to the county auditor who must have it recorded before it is forwarded to the grantee.
Recording of the deed by the county auditor is deemed delivery to the grantee.
new text end

new text begin (b) Failure to make any payment required by this chapter will constitute default and
upon such default, the sale will be subject to the cancellation provisions of section 282.40.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021, and applies to repurchases
approved on or after that date.
new text end

Sec. 5.

Minnesota Statutes 2020, section 325N.01, is amended to read:


325N.01 DEFINITIONS.

The definitions in paragraphs (a) to (h) apply to sections 325N.01 to 325N.09.

(a) deleted text begin"Foreclosure consultant"deleted text endnew text begin "Solicitor"new text end means any person who, directly or indirectly,
makes any solicitation, representation, or offer to any owner to perform for compensation
or who, for compensation, performs any service which the person in any manner represents
will in any manner do any of the following:

(1) stop or postpone deleted text beginthedeleted text endnew text begin anew text end foreclosure salenew text begin, a tax forfeiture sale, or a contract for deed
termination
new text end;

(2) obtain any forbearance from any beneficiarynew text begin, local unit of government, association
of apartment owners, contract for deed seller,
new text end or mortgageenew text begin regarding:
new text end

new text begin (i) taxesnew text end;

new text begin (ii) dues owed to an association of apartment owners; or
new text end

new text begin (iii) contract for deed, mortgage, or any other payments;
new text end

(3) assist the owner tonew text begin:
new text end

new text begin (i)new text end exercise the right of reinstatement provided in section 580.30new text begin or the right of redemption
provided in section 580.25
new text end;

new text begin (ii) exercise the right of redemption under chapter 281 or the right to repurchase under
sections 282.241 to 282.324;
new text end

new text begin (iii) cure a default that has resulted in a termination notice issued under section 559.21,
subdivision 2a; or
new text end

new text begin (iv) cure a default that resulted in a lien secured by a common interest community or a
master association;
new text end

(4) obtain any extension of the period within which the owner may reinstate the owner's
obligation;

(5) obtain any waiver of an acceleration clause contained in any promissory note or
contract secured by a mortgage on a residence in foreclosure or contained in the mortgage;

(6) assist the owner in foreclosurenew text begin, tax forfeiture,new text end or deleted text beginloandeleted text end default new text beginon a loan, contract for
deed payments, or dues owed to an association of apartment owners,
new text endto obtain a loan or
advance of funds;

(7) avoid or ameliorate the impairment of the owner's credit resulting from the recording
of a notice of defaultnew text begin on taxes or any debt secured by the covered residencenew text end or the conduct
of a foreclosure new text beginor tax forfeiture new text endsale;

(8) save the owner's residence from foreclosurenew text begin, tax forfeiture, or contract for deed
termination
new text end; or

(9) negotiate or modify the terms or conditions of an existing residential mortgage loannew text begin,
a repayment agreement on taxes owed, a repurchase agreement of tax-forfeited real property,
or a contract for deed
new text end.

(b) A deleted text beginforeclosure consultantdeleted text endnew text begin solicitornew text end does not include any of the following:

(1) a person licensed to practice law in this state when the person renders service in the
course of the person's practice as an attorney-at-law;

(2) a person licensed as a debt management services provider under chapter 332A, when
the person is acting as a debt management services provider as defined in that chapter;

(3) a person licensed as a real estate broker or salesperson under chapter 82 when the
person engages in acts whose performance requires licensure under that chapter unless the
person is engaged in offering services designed to, or purportedly designed to, enable the
owner to retain possession of thenew text begin coverednew text end residence deleted text beginin foreclosuredeleted text end;

(4) a person licensed as an accountant under chapter 326A when the person is acting in
any capacity for which the person is licensed under those provisions;

(5) a person or the person's authorized agent acting under the express authority or written
approval of the Department of Housing and Urban Development or other department or
agency of the United States or this state to provide services;

(6) a person who holds or is owed an obligation secured by a lien on anynew text begin coverednew text end
residence deleted text beginin foreclosuredeleted text end when the person performs services in connection with this obligation
or lien if the obligation or lien did not arise as the result of or as part of a proposed deleted text beginforeclosuredeleted text endnew text begin
property
new text end reconveyance;

(7) any person or entity doing business under any law of this state, or of the United States
relating to banks, trust companies, savings and loan associations, industrial loan and thrift
companies, regulated lenders, credit unions, insurance companies, or a mortgagee which is
a United States Department of Housing and Urban Development approved mortgagee and
any subsidiary or affiliate of these persons or entities, and any agent or employee of these
persons or entities while engaged in the business of these persons or entities;

(8) a person licensed as a residential mortgage originator or servicer pursuant to chapter
58, when acting under the authority of that license, except that the provisions of sections
325N.01 to 325N.06, 325N.08, and 325N.09 shall apply to any person operating under a
mortgage originator license who negotiates or offers to negotiate the terms or conditions of
an existing residential mortgage loan;

(9) a nonprofit agency or organization that has tax-exempt status under section 501(c)(3)
of the Internal Revenue Code that offers counseling or advice to an owner of a home in
foreclosure or loan default if they do not contract for services with for-profit lenders or
deleted text begin foreclosuredeleted text endnew text begin equitynew text end purchasers, except that they shall comply with the provisions of section
325N.04, clause (1);

(10) a judgment creditor of the owner, to the extent that the judgment creditor's claim
accrued prior to the personal service of the foreclosure notice required by section 580.03,
but excluding a person who purchased the claim after such personal service; deleted text beginand
deleted text end

(11) deleted text begina foreclosuredeleted text endnew text begin an equitynew text end purchaser as defined in section 325N.10new text begin; and
new text end

new text begin (12) any common interest community association or master association that holds or is
owed an obligation secured by a lien on any residence in foreclosure and any employee or
agent of either while performing services within the scope of the employment or agency
new text end.

(c) deleted text begin"Foreclosuredeleted text endnew text begin "Propertynew text end reconveyance" means a transaction involving:

(1) the transfer of title to real property by deleted text begina foreclosed homeowner during a foreclosure
proceeding, either by transfer of interest from the foreclosed homeowner or by creation of
a mortgage or other lien or encumbrance during the foreclosure process
deleted text endnew text begin an owner, either
by transfer of interest from the owner or by creation of a mortgage or other lien or
encumbrance
new text end that allows the acquirer to obtain title to the property by redeeming the property
as a junior lienholdernew text begin or by other legal process, prior to the expiration of:
new text end

new text begin (i) the right of reinstatement provided in section 580.30 or the right of redemption of a
property provided in section 580.25;
new text end

new text begin (ii) the right of redemption under chapter 281 or the right to repurchase under sections
282.241 to 282.324;
new text end

new text begin (iii) the period to cure a default that has resulted in a termination notice issued under
section 559.21, subdivision 2a; or
new text end

new text begin (iv) the period to cure a default that resulted in a lien assessed by a common interest
community or a master association
new text end; and

(2) the subsequent conveyance, or promise of a subsequent conveyance, of an interest
back to the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end by the acquirer or a person acting in participation
with the acquirer that allows the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end to possess either the new text begincovered
new text end residence deleted text beginin foreclosuredeleted text end or any other real property, which interest includes, but is not limited
to, an interest in a contract for deed, purchase agreement, option to purchase, or lease.

(d) "Person" means any individual, partnership, corporation, limited liability company,
association, or other group, however organized.

(e) "Service" means and includes, but is not limited to, any of the following:

(1) debt, budget, or financial counseling of any type;

(2) receiving money for the purpose of distributing it to creditorsnew text begin, vendors, or association
of apartment owners
new text end in payment or partial payment of any obligation secured by deleted text begina lien ondeleted text end
a new text begincovered new text endresidence deleted text beginin foreclosuredeleted text end;

(3) contacting creditorsnew text begin, vendors, association of apartment owners,new text end or servicers to
negotiate or offer to negotiate the terms or conditions of an existing residential mortgage
loannew text begin, a tax forfeiture redemption or repurchase agreement, or a contract for deednew text end;

(4) arranging or attempting to arrange for an extension of the period within which the
owner of anew text begin coverednew text end residence deleted text beginin foreclosuredeleted text end maynew text begin:
new text end

new text begin (i)new text end cure the owner's default and reinstate the owner's obligation pursuant to section
580.30;

new text begin (ii) cure the owner's property tax default and redeem the property;
new text end

new text begin (iii) cure the owner's default on dues owed to an association of apartment owners and
release the common interest community or master association's lien; or
new text end

new text begin (iv) cure the default on a contract for deed and void the purchaser's ability to terminate
the contract;
new text end

(5) arranging or attempting to arrange for any delay or postponement of the time of sale
of thenew text begin coverednew text end residence deleted text beginin foreclosuredeleted text end;

(6) advising the filing of any document or assisting in any manner in the preparation of
any document for filing with any bankruptcy court; or

(7) giving any advice, explanation, or instruction to an owner of a new text begincovered new text endresidence deleted text beginin
foreclosure
deleted text end, which in any manner relates to the cure of a default in or the reinstatement of
an obligation secured by a lien on the new text begincovered new text endresidence deleted text beginin foreclosuredeleted text end, the full satisfaction
of that obligation, or the postponement or avoidance of a sale of a new text begincovered new text endresidence deleted text beginin
foreclosure
deleted text end, pursuant to a power of sale contained in any mortgage.

(f) deleted text begin"Residence in foreclosure"deleted text endnew text begin "Covered residence"new text end means residential real property
deleted text begin consisting of one to four family dwelling units, one of which the owner occupies as the
owner's principal place of residence, or real property that is principally used for farming,
as defined in section 500.24, subdivision 2, whether or not parcels are contiguous, so long
as the owner occupies one of the parcels as the owner's principal place of residence, where
there is a delinquency or default on any loan payment or debt secured by or attached to the
residential real property including, but not limited to, contract for deed payments
deleted text endnew text begin where
there is a delinquency or default on any loan, tax, or contract for deed payment, association
of apartment owner or master association dues, or other debt secured by or attached to the
residential real property that:
new text end

new text begin (i) consists of one to four family dwelling units, one of which the owner occupies as the
owner's principal place of residence;
new text end

new text begin (ii) is an apartment, as that term is defined in section 515.02, subdivision 2;
new text end

new text begin (iii) is the subject of a contract for deed; or
new text end

new text begin (iv) is real property that is principally used for farming, as defined in section 500.24,
subdivision 2, whether or not parcels are contiguous, so long as the owner occupies one of
the parcels as the owner's principal place of residence
new text end.

(g) "Owner" means the record owner of deleted text beginthe residential real property in foreclosuredeleted text endnew text begin a
covered residence. For the purposes of this chapter, if the residence in foreclosure is subject
to a mortgage foreclosure, an owner is the record owner
new text end at the time the notice of pendency
was recorded, or the summons and complaint served.

(h) "Contract" means any agreement, or any term in any agreement, between a deleted text beginforeclosure
consultant
deleted text endnew text begin solicitornew text end and an owner for the rendition of any service as defined in paragraph
(e).

new text begin (i) "Association of apartment owners" has the meaning given in section 515.02,
subdivision 5.
new text end

new text begin (j) "Common interest community" has the meaning given in section 515B.1-103, clause
(10).
new text end

new text begin (k) "Master association" has the meaning given in section 515B.1-103, clause (21).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021.
new text end

Sec. 6.

Minnesota Statutes 2020, section 325N.02, is amended to read:


325N.02 RESCISSION OF deleted text beginFORECLOSURE CONSULTANTdeleted text endnew text begin SOLICITORnew text end
CONTRACT.

(a) In addition to any other right under law to rescind a contract, an owner has the right
to cancel deleted text beginsuchdeleted text end a new text beginsolicitor new text endcontract until midnight of the third business day after the day on
which the owner signs a contract which complies with section 325N.03.

(b) Cancellation occurs when the owner gives written notice of cancellation to the
deleted text begin foreclosure consultantdeleted text endnew text begin solicitornew text end at the address specified in the contract.

(c) Notice of cancellation, if given by mail, is effective when deposited in the mail
properly addressed with postage prepaid.

(d) Notice of cancellation given by the owner need not take the particular form as
provided with the contract and, however expressed, is effective if it indicates the intention
of the owner not to be bound by the contract.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021, and applies to contracts
executed on or after that date.
new text end

Sec. 7.

Minnesota Statutes 2020, section 325N.03, is amended to read:


325N.03 CONTRACT.

(a) Every contract must be in writing and must fully disclose the exact nature of the
deleted text begin foreclosure consultant'sdeleted text endnew text begin solicitor'snew text end services and the total amount and terms of compensation.

(b) The following notice, printed in at least 14-point boldface type and completed with
the name of the deleted text beginforeclosure consultantdeleted text endnew text begin solicitornew text end, must be printed immediately above the
statement required by paragraph (c):

"NOTICE REQUIRED BY MINNESOTA LAW
......................... (Name) or anyone working for him or
her CANNOT:
(1) Take any money from you or ask you for money
until ......................... (Name) has completely finished
doing everything he or she said he or she would do; and
(2) Ask you to sign or have you sign any lien, mortgage,
or deed."

(c) The contract must be written in the same language as principally used by the
deleted text begin foreclosure consultantdeleted text endnew text begin solicitornew text end to describe his or her services or to negotiate the contract,
must be dated and signed by the owner, and must contain in immediate proximity to the
space reserved for the owner's signature a conspicuous statement in a size equal to at least
10-point boldface type, as follows:

"You, the owner, may cancel this transaction at any time prior to midnight of the third
business day after the date of this transaction. See the attached notice of cancellation
form for an explanation of this right."

(d) The notice of cancellation must contain, and the contract must contain on the first
page, in a type size no smaller than that generally used in the body of the document, each
of the following:

(1) the name and physical address of the deleted text beginforeclosure consultantdeleted text endnew text begin solicitornew text end to which the
notice of cancellation is to be mailed or otherwise delivered. A post office box does not
constitute a physical address. A post office box may be designated for delivery by mail only
if it is accompanied by a physical address at which the notice could be delivered by a method
other than mail. An e-mail address may be included, in addition to the physical address;
and

(2) the date the owner signed the contract.

(e) Cancellation occurs when the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end delivers, by any means,
written notice of cancellation to the address specified in the contract. If cancellation is
mailed, delivery is effective upon mailing. If e-mailed, cancellation is effective upon
transmission. The contract must be accompanied by a completed form in duplicate, captioned
"notice of cancellation," which must be attached to the contract, must be easily detachable,
and must contain in at least 10-point type the following statement written in the same
language as used in the contract:

"NOTICE OF CANCELLATION
.
(Enter date of transaction) (Date)
You may cancel this transaction, without any penalty
or obligation, within three business days from the above
date.
To cancel this transaction, you may use any of the
following methods: (1) mail or otherwise deliver a
signed and dated copy of this cancellation notice, or any
other written notice of cancellation; or (2) e-mail a notice
of cancellation
to .
(Name of deleted text beginforeclosure consultantdeleted text endnew text begin solicitornew text end)
at .
(Physical address of deleted text beginforeclosure consultant'sdeleted text endnew text begin solicitor'snew text end
place of business)
.
(E-mail address of deleted text beginforeclosure consultant'sdeleted text endnew text begin solicitor'snew text end
place of business)
NOT LATER THAN MIDNIGHT OF .
(Date)
I hereby cancel this transaction .
(Date)
.
(Owner's signature)"

(f) The deleted text beginforeclosure consultantdeleted text endnew text begin solicitornew text end shall provide the owner with a copy of the contract
and the attached notice of cancellation immediately upon execution of the contract.

(g) The three business days during which the owner may cancel the contract shall not
begin to run until the deleted text beginforeclosure consultantdeleted text endnew text begin solicitornew text end has complied with this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021, and applies to contracts
executed on or after that date.
new text end

Sec. 8.

Minnesota Statutes 2020, section 325N.04, is amended to read:


325N.04 VIOLATIONS.

It is a violation for a deleted text beginforeclosure consultantdeleted text endnew text begin solicitornew text end to:

(1) claim, demand, charge, collect, or receive any compensation until after the deleted text beginforeclosure
consultant
deleted text endnew text begin solicitornew text end has fully performed each and every service the deleted text beginforeclosure consultantdeleted text endnew text begin
solicitor
new text end contracted to perform or represented he or she would perform;

(2) claim, demand, charge, collect, or receive any fee, interest, or any other compensation
for any reason which exceeds eight percent per annum of the amount of any loan which the
deleted text begin foreclosure consultantdeleted text endnew text begin solicitornew text end may make to the owner. Such a loan must not, as provided
in clause (3), be secured by the new text begincovered new text endresidence deleted text beginin foreclosuredeleted text end or any other real or personal
property;

(3) take any wage assignment, any lien of any type on real or personal property, or other
security to secure the payment of compensation. Any such security is void and unenforceable;

(4) receive any consideration from any third party in connection with services rendered
to an owner unless the consideration is first fully disclosed to the owner;

(5) acquire any interest, directly or indirectly, or by means of a subsidiary or affiliate in
a new text begincovered new text endresidence deleted text beginin foreclosuredeleted text end from an owner with whom the deleted text beginforeclosure consultantdeleted text endnew text begin
solicitor
new text end has contracted;

(6) take any power of attorney from an owner for any purpose, except to inspect
documents as provided by law; or

(7) induce or attempt to induce any owner to enter a contract which does not comply in
all respects with sections 325N.02 and 325N.03.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021.
new text end

Sec. 9.

Minnesota Statutes 2020, section 325N.05, is amended to read:


325N.05 WAIVER NOT ALLOWED.

Any waiver by an owner of the provisions of sections 325N.01 to 325N.09 is void and
unenforceable as contrary to public policy. Any attempt by a deleted text beginforeclosure consultantdeleted text endnew text begin solicitornew text end
to induce an owner to waive the owner's rights is a violation of sections 325N.01 to 325N.09.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021.
new text end

Sec. 10.

Minnesota Statutes 2020, section 325N.06, is amended to read:


325N.06 REMEDIES.

(a) A violation of sections 325N.01 to 325N.09 is considered to be a violation of section
325F.69, and all remedies of section 8.31 are available for such an action. A private cause
of action under section 8.31 by a deleted text beginforeclosed homeownerdeleted text end new text beginownernew text end is in the public interest. An
owner may bring an action against a deleted text beginforeclosure consultantdeleted text endnew text begin solicitornew text end for any violation of
sections 325N.01 to 325N.09. Judgment must be entered for actual damages, reasonable
attorney fees and costs, and appropriate equitable relief.

(b) The rights and remedies provided in paragraph (a) are cumulative to, and not a
limitation of, any other rights and remedies provided by law. Any action brought pursuant
to this section must be commenced within deleted text beginfourdeleted text endnew text begin sixnew text end years from the date of the alleged
violation.

(c) The court may award exemplary damages up to 1-1/2 times the compensation charged
by the deleted text beginforeclosure consultantdeleted text endnew text begin solicitornew text end if the court finds that the deleted text beginforeclosure consultantdeleted text endnew text begin
solicitor
new text end violated the provisions of section 325N.04, clause (1), (2), or (4), and the deleted text beginforeclosure
consultant's
deleted text endnew text begin solicitor'snew text end conduct was in bad faith.

(d) Notwithstanding any other provision of this section, no action may be brought on
the basis of a violation of sections 325N.01 to 325N.09, except by an owner against whom
the violation was committed or by the attorney general. This limitation does not apply to
administrative action by the commissioner of commerce.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021.
new text end

Sec. 11.

Minnesota Statutes 2020, section 325N.10, subdivision 2, is amended to read:


Subd. 2.

deleted text beginForeclosed homeownerdeleted text endnew text begin Ownernew text end.

deleted text begin"Foreclosed homeowner" means an owner
of residential real property, including a condominium, or an owner of real property that is
principally used for farming as defined in section 500.24, subdivision 2, that is the primary
residence of the owner and whose mortgage on the real property is or was in foreclosure
deleted text endnew text begin
"Owner" has the meaning given in section 325N.01, paragraph (g)
new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021.
new text end

Sec. 12.

Minnesota Statutes 2020, section 325N.10, subdivision 3, is amended to read:


Subd. 3.

deleted text beginForeclosuredeleted text endnew text begin Propertynew text end reconveyance.

deleted text begin"Foreclosuredeleted text endnew text begin "Propertynew text end reconveyance"
deleted text begin means a transaction involving:
deleted text end

deleted text begin (1) the transfer of title to real property by a foreclosed homeowner during a foreclosure
proceeding, either by transfer of interest from the foreclosed homeowner or by creation of
a mortgage or other lien or encumbrance during the foreclosure process that allows the
acquirer to obtain title to the property by redeeming the property as a junior lienholder; and
deleted text end

deleted text begin (2) the subsequent conveyance, or promise of a subsequent conveyance, of an interest
back to the foreclosed homeowner by the acquirer or a person acting in participation with
the acquirer that allows the foreclosed homeowner to possess either the residence in
foreclosure or other real property, which interest includes, but is not limited to, an interest
in a contract for deed, purchase agreement, option to purchase, or lease
deleted text endnew text begin has the meaning
given in section 325N.01, paragraph (c)
new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021.
new text end

Sec. 13.

Minnesota Statutes 2020, section 325N.10, subdivision 4, is amended to read:


Subd. 4.

deleted text beginForeclosuredeleted text endnew text begin Equitynew text end purchaser.

deleted text begin"Foreclosuredeleted text endnew text begin "Equitynew text end purchaser" means a
person that has acted as the acquirer in a deleted text beginforeclosuredeleted text endnew text begin propertynew text end reconveyance. deleted text beginForeclosuredeleted text endnew text begin
Equity
new text end purchaser also includes a person that has acted in joint venture or joint enterprise
with one or more acquirers in a deleted text beginforeclosuredeleted text endnew text begin propertynew text end reconveyance. deleted text beginA foreclosuredeleted text endnew text begin An equitynew text end
purchaser does not include: (i) a natural person who shows that the natural person is not in
the business of deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchasing and has a prior personal relationship with the
deleted text begin forecloseddeleted text end homeownernew text begin of the covered residence, unless a showing of fraud under section
325F.69, subdivision 1, has been made
new text end, or (ii) a federal or state chartered bank, savings
bank, thrift, or credit union.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021.
new text end

Sec. 14.

Minnesota Statutes 2020, section 325N.10, subdivision 5, is amended to read:


Subd. 5.

Resale.

"Resale" means a bona fide market sale of the property subject to the
deleted text begin foreclosuredeleted text endnew text begin propertynew text end reconveyance by the deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser to an unaffiliated
third party.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021.
new text end

Sec. 15.

Minnesota Statutes 2020, section 325N.10, subdivision 7, is amended to read:


Subd. 7.

new text beginCovered new text endresidence deleted text beginin foreclosuredeleted text end.

deleted text begin"Residence in foreclosure" means residential
real property consisting of one to four family dwelling units, one of which the owner occupies
as the owner's principal place of residence, or real property that is principally used for
farming, as defined in section 500.24, subdivision 2, whether or not parcels are contiguous,
so long as the owner occupies one of the parcels as the owner's principal place of residence,
where there is a delinquency or default on any loan payment or debt secured by or attached
to the real property, including, but not limited to, contract for deed payments
deleted text endnew text begin "Covered
residence" has the meaning given in section 325N.01, paragraph (f)
new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021.
new text end

Sec. 16.

Minnesota Statutes 2020, section 325N.11, is amended to read:


325N.11 CONTRACT REQUIREMENT; FORM AND LANGUAGE.

A deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser shall enter into every deleted text beginforeclosuredeleted text endnew text begin propertynew text end reconveyance
in the form of a written contract. Every contract must be written in letters of a size equal to
at least 12-point boldface type, in the same language principally used by the deleted text beginforeclosuredeleted text endnew text begin
equity
new text end purchaser and deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end to negotiate the sale of the new text begincovered
new text end residence deleted text beginin foreclosuredeleted text end and must be fully completed and signed and dated by the deleted text beginforeclosed
homeowner
deleted text endnew text begin ownernew text end and deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser before the execution of any instrument
of conveyance of the new text begincovered new text endresidence deleted text beginin foreclosuredeleted text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021, and applies to contracts
executed on or after that date.
new text end

Sec. 17.

Minnesota Statutes 2020, section 325N.12, is amended to read:


325N.12 CONTRACT TERMS.

Every contract required by section 325N.11 must contain the entire agreement of the
parties and must include the following terms:

(1) the name, business address, and the telephone number of the deleted text beginforeclosuredeleted text endnew text begin equitynew text end
purchaser;

(2) the address of the new text begincovered new text endresidence deleted text beginin foreclosuredeleted text end;

(3) the total consideration to be given by the deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser in connection
with or incident to the sale;

(4) a complete description of the terms of payment or other consideration including, but
not limited to, any services of any nature that the deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser represents
he or she will perform for the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end before or after the sale;

(5) the time at which possession is to be transferred to the deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser;

(6) a complete description of the terms of any related agreement designed to allow the
deleted text begin foreclosed homeownerdeleted text endnew text begin ownernew text end to remain in the home, such as a rental agreement, repurchase
agreement, contract for deed, or lease with option to buy;

(7) a notice of cancellation as provided in section 325N.14, paragraph (b); and

(8) the following notice in at least 14-point boldface type, if the contract is printed or in
capital letters if the contract is typed, and completed with the name of the deleted text beginforeclosuredeleted text endnew text begin equitynew text end
purchaser, immediately above the statement required by section 325N.14, paragraph (a):

"NOTICE REQUIRED BY MINNESOTA LAW

Until your right to cancel this contract has ended, ....... (Name) or anyone working for
....... (Name) CANNOT ask you to sign or have you sign any deed or any other
document."

The contract required by this section survives delivery of any instrument of conveyance
of the new text begincovered new text endresidence deleted text beginin foreclosuredeleted text end, and has no effect on persons other than the parties
to the contract.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021, and applies to contracts
executed on or after that date.
new text end

Sec. 18.

Minnesota Statutes 2020, section 325N.13, is amended to read:


325N.13 CONTRACT CANCELLATION.

(a) In addition to any other right of rescission, the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end has the
right to cancel any contract with a deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser until midnight of the fifth
business day following the day on which the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end signs a contract
that complies with sections 325N.10 to 325N.15 or until 8:00 a.m. on the last day of the
period during which the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end has a right of redemption, whichever
occurs first.

(b) Cancellation occurs when the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end delivers, by any means,
written notice of cancellation, provided that, at a minimum, the contract and the notice of
cancellation must contain a physical address to which notice of cancellation may be mailed
or otherwise delivered. A post office box does not constitute a physical address. A post
office box may be designated for delivery by mail only if it is accompanied by a physical
address at which the notice could be delivered by a method other than mail. An e-mail
address may be provided in addition to the physical address. If cancellation is mailed,
delivery is effective upon mailing. If e-mailed, cancellation is effective upon transmission.

(c) A notice of cancellation given by the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end need not take
the particular form as provided with the contract.

(d) Within ten days following receipt of a notice of cancellation given in accordance
with this section, the deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser shall return without condition any original
contract and any other documents signed by the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021, and applies to contracts
executed on or after that date.
new text end

Sec. 19.

Minnesota Statutes 2020, section 325N.14, is amended to read:


325N.14 NOTICE OF CANCELLATION.

(a) The contract must contain in immediate proximity to the space reserved for the
deleted text begin foreclosed homeowner'sdeleted text endnew text begin owner'snew text end signature a conspicuous statement in a size equal to at least
14-point boldface type, if the contract is printed, or in capital letters, if the contract is typed,
as follows:

"You may cancel this contract for the sale of your house
without any penalty or obligation at any time before
.
(Date and time of day)
See the attached notice of cancellation form for an
explanation of this right."

The deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser shall accurately enter the date and time of day on which
the cancellation right ends.

(b) The contract must be accompanied by a completed form in duplicate, captioned
"notice of cancellation" in a size equal to a 12-point boldface type if the contract is printed,
or in capital letters, if the contract is typed, followed by a space in which the deleted text beginforeclosuredeleted text endnew text begin
equity
new text end purchaser shall enter the date on which the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end executes
the contract. This form must be attached to the contract, must be easily detachable, and must
contain in type of at least 10 points, if the contract is printed or in capital letters if the contract
is typed, the following statement written in the same language as used in the contract:

"NOTICE OF CANCELLATION
.
(Enter date contract signed)
You may cancel this contract for the sale of your house,
without any penalty or obligation, at any time before
.
(Enter date and time of day)
To cancel this transaction, you may use any of the
following methods: (1) mail or otherwise deliver a
signed and dated copy of this cancellation notice; or (2)
e-mail a notice of cancellation to
.
(Name of purchaser)
at .
(Physical address of purchaser's place of business)
.
(E-mail address of foreclosure consultant's place of
business)
NOT LATER THAN .
(Enter date and time of day)
I hereby cancel this transaction .
(Date)
.
(Seller's signature)"

(c) The deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser shall provide the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end
with a copy of the contract and the attached notice of cancellation at the time the contract
is executed by all parties.

(d) The five business days during which the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end may cancel
the contract must not begin to run until all parties to the contract have executed the contract
and the deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser has complied with this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021, and applies to contracts
executed on or after that date.
new text end

Sec. 20.

Minnesota Statutes 2020, section 325N.15, is amended to read:


325N.15 WAIVER.

Any waiver of the provisions of sections 325N.10 to 325N.18 is void and unenforceable
as contrary to public policy except a consumer may waive the five-day right to cancel
provided in section 325N.13 if the property is subject to a foreclosure sale within the five
business days, and the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end agrees to waive his or her right to
cancel in a handwritten statement signed by all parties holding title to the foreclosed property.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021.
new text end

Sec. 21.

Minnesota Statutes 2020, section 325N.17, is amended to read:


325N.17 PROHIBITED PRACTICES.

deleted text begin A foreclosuredeleted text endnew text begin An equitynew text end purchaser shall not:

(a) enter into, or attempt to enter into, a deleted text beginforeclosuredeleted text endnew text begin propertynew text end reconveyance with a
deleted text begin foreclosed homeownerdeleted text endnew text begin ownernew text end unless:

(1) the deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser verifies and can demonstrate that the deleted text beginforeclosed
homeowner
deleted text endnew text begin ownernew text end has a reasonable ability to pay for the subsequent conveyance of an
interest back to the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end. In the case of a lease with an option to
purchase, payment ability also includes the reasonable ability to make the lease payments
and purchase the property within the term of the option to purchase. There is a rebuttable
presumption that deleted text begina homeownerdeleted text endnew text begin an ownernew text end is reasonably able to pay for the subsequent
conveyance if the owner's payments for primary housing expenses and regular principal
and interest payments on other personal debt, on a monthly basis, do not exceed 60 percent
of the owner's monthly gross income. For the purposes of this section, "primary housing
expenses" means the sum of payments for regular principal, interest, rent, utilities, hazard
insurance, real estate taxes, and association dues. There is a rebuttable presumption that the
deleted text begin foreclosuredeleted text endnew text begin equitynew text end purchaser has not verified reasonable payment ability if the deleted text beginforeclosuredeleted text endnew text begin
equity
new text end purchaser has not obtained documents other than a statement by the deleted text beginforeclosed
homeowner
deleted text endnew text begin ownernew text end of assets, liabilities, and income;

(2) the deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser and the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end complete a
closing for any deleted text beginforeclosuredeleted text endnew text begin propertynew text end reconveyance in which the deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser
obtains a deed or mortgage from deleted text begina foreclosed homeownerdeleted text endnew text begin an ownernew text end. For purposes of this
section, "closing" means an in-person meeting to complete final documents incident to the
sale of the real property or creation of a mortgage on the real property conducted by a closing
agent, as defined in section 82.55, who is not employed by or an affiliate of the deleted text beginforeclosuredeleted text endnew text begin
equity
new text end purchaser, or employed by such an affiliate, and who does not have a business or
personal relationship with the deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser other than the provision of real
estate settlement services;

(3) the deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser obtains the written consent of the deleted text beginforeclosed
homeowner
deleted text endnew text begin ownernew text end to a grant by the deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser of any interest in the
property during such times as the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end maintains any interest in
the property; and

(4) the deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser complies with the requirements for disclosure, loan
terms, and conduct in the federal Home Ownership Equity Protection Act, United States
Code, title 15, section 1639, or its implementing regulation, Code of Federal Regulations,
title 12, sections 226.31, 226.32, and 226.34, for any deleted text beginforeclosuredeleted text endnew text begin propertynew text end reconveyance in
which the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end obtains a vendee interest in a contract for deed,
regardless of whether the terms of the contract for deed meet the annual percentage rate or
points and fees requirements for a covered loan in Code of Federal Regulations, title 12,
sections 226.32 (a) and (b);

(b) fail to either:

(1) ensure that title to the subject dwelling has been reconveyed to the deleted text beginforeclosed
homeowner
deleted text endnew text begin ownernew text end; or

(2) make a payment to the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end such that the deleted text beginforeclosed
homeowner
deleted text endnew text begin ownernew text end has received consideration in an amount of at least 82 percent of the fair
market value of the property within 150 days of either the eviction or voluntary
relinquishment of possession of the dwelling by the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end. The
deleted text begin foreclosuredeleted text endnew text begin equitynew text end purchaser shall make a detailed accounting of the basis for the payment
amount, or a detailed accounting of the reasons for failure to make a payment, including
providing written documentation of expenses, within this 150-day period. The accounting
shall be on a form prescribed by the attorney general, in consultation with the commissioner
of commerce, without being subject to the rulemaking procedures of chapter 14. For purposes
of this provision, the following applies:

(i) there is a rebuttable presumption that an appraisal by a person licensed or certified
by an agency of the federal government or this state to appraise real estate constitutes the
fair market value of the property;

(ii) the time for determining the fair market value amount shall be determined in the
deleted text begin foreclosuredeleted text endnew text begin propertynew text end reconveyance contract as either at the time of the execution of the
deleted text begin foreclosuredeleted text endnew text begin propertynew text end reconveyance contract or at resale. If the contract states that the fair
market value shall be determined at the time of resale, the fair market value shall be the
resale price if it is sold within 120 days of the eviction or voluntary relinquishment of the
property by the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end. If the contract states that the fair market
value shall be determined at the time of resale, and the resale is not completed within 120
days of the eviction or voluntary relinquishment of the property by the deleted text beginforeclosed homeownerdeleted text endnew text begin
owner
new text end, the fair market value shall be determined by an appraisal conducted during this
120-day period and payment, if required, shall be made to the deleted text beginhomeownerdeleted text endnew text begin ownernew text end, but the
fair market value shall be recalculated as the resale price on resale and an additional payment
amount, if appropriate based on the resale price, shall be made to the deleted text beginforeclosed homeownerdeleted text endnew text begin
owner
new text end within 15 days of resale, and a detailed accounting of the basis for the payment
amount, or a detailed accounting of the reasons for failure to make additional payment, shall
be made within 15 days of resale, including providing written documentation of expenses.
The accounting shall be on a form prescribed by the attorney general, in consultation with
the commissioner of commerce, without being subject to the rulemaking procedures of
chapter 14;

(iii) "consideration" shall mean any payment or thing of value provided to the deleted text beginforeclosed
homeowner
deleted text endnew text begin ownernew text end, including unpaid rent or contract for deed payments owed by the
deleted text begin foreclosed homeownerdeleted text endnew text begin ownernew text end prior to the date of eviction or voluntary relinquishment of
the property, reasonable costs paid to third parties necessary to complete the deleted text beginforeclosuredeleted text endnew text begin
property
new text end reconveyance transaction, payment of money to satisfy a debt or legal obligation
of the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end, or the reasonable cost of repairs for damage to the
dwelling caused by the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end; or a penalty imposed by a court for
the filing of a frivolous claim under section 325N.18, subdivision 6, but

(iv) "consideration" shall not include amounts imputed as a down payment or fee to the
deleted text begin foreclosuredeleted text endnew text begin equitynew text end purchaser, or a person acting in participation with the deleted text beginforeclosuredeleted text endnew text begin equitynew text end
purchaser, incident to a contract for deed, lease, or option to purchase entered into as part
of the deleted text beginforeclosuredeleted text endnew text begin propertynew text end reconveyance, except for reasonable costs paid to third parties
necessary to complete the deleted text beginforeclosuredeleted text endnew text begin propertynew text end reconveyance;

(c) enter into repurchase or lease terms as part of the subsequent conveyance that are
unfair or commercially unreasonable, or engage in any other unfair conduct;

(d) represent, directly or indirectly, that:

(1) the deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser is acting as an advisor or a consultant, or in any
other manner represents that the deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser is acting on behalf of the
deleted text begin homeownerdeleted text endnew text begin ownernew text end;

(2) the deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser has certification or licensure that the deleted text beginforeclosuredeleted text endnew text begin
equity
new text end purchaser does not have, or that the deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser is not a member of
a licensed profession if that is untrue;

(3) the deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser is assisting the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end to
"save the house" or substantially similar phrase; or

(4) the deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser is assisting the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end in
preventing a completed foreclosurenew text begin or forfeiturenew text end if the result of the transaction is that the
deleted text begin foreclosed homeownerdeleted text endnew text begin ownernew text end will not complete a redemption of the property;

(e) make any other statements, directly or by implication, or engage in any other conduct
that is false, deceptive, or misleading, or that has the likelihood to cause confusion or
misunderstanding, including, but not limited to, statements regarding the value of the new text begincovered
new text end residence deleted text beginin foreclosuredeleted text end, the amount of proceeds the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end will
receive after a deleted text beginforeclosuredeleted text end salenew text begin of the covered residencenew text end, any contract term, or the deleted text beginforeclosed
homeowner's
deleted text endnew text begin owner'snew text end rights or obligations incident to or arising out of the deleted text beginforeclosuredeleted text endnew text begin
property
new text end reconveyance; or

(f) do any of the following until the time during which the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end
may cancel the transaction has fully elapsed:

(1) accept from any deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end an execution of, or induce any
deleted text begin foreclosed homeownerdeleted text endnew text begin ownernew text end to execute, any instrument of conveyance of any interest in
the new text begincovered new text endresidence deleted text beginin foreclosuredeleted text end;

(2) record with the county recorder or file with the registrar of titles any document,
including but not limited to, any instrument of conveyance, signed by the deleted text beginforeclosed
homeowner
deleted text endnew text begin ownernew text end;

(3) transfer or encumber or purport to transfer or encumber any interest in the new text begincovered
new text end residence deleted text beginin foreclosuredeleted text end to any third party, provided no grant of any interest or encumbrance
is defeated or affected as against a bona fide purchaser or encumbrance for value and without
notice of a violation of sections 325N.10 to 325N.18, and knowledge on the part of any
such person or entity that the property was "deleted text beginrealdeleted text endnew text begin coverednew text end property deleted text beginin foreclosuredeleted text end" does not
constitute notice of a violation of sections 325N.10 to 325N.18. This section does not
abrogate any duty of inquiry which exists as to rights or interests of persons in possession
of the deleted text beginrealdeleted text endnew text begin coverednew text end property deleted text beginin foreclosuredeleted text end; or

(4) pay the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end any consideration.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021.
new text end

Sec. 22.

Minnesota Statutes 2020, section 325N.18, subdivision 1, is amended to read:


Subdivision 1.

Remedies.

A violation of sections 325N.10 to 325N.17 is considered to
be a violation of section 325F.69, and all the remedies of section 8.31 are available for such
an action. A private right of action under section 8.31 by deleted text begina foreclosed homeownerdeleted text endnew text begin an ownernew text end
is in the public interest.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021.
new text end

Sec. 23.

Minnesota Statutes 2020, section 325N.18, subdivision 2, is amended to read:


Subd. 2.

Exemplary damages.

In a private right of action under section 8.31 for a
violation of section 325N.17, the court may award exemplary damages of any amount. In
the event the court determines that an award of exemplary damages is appropriate, the
amount of exemplary damages awarded shall not be less than 1-1/2 times the deleted text beginforeclosed
homeowner's
deleted text endnew text begin owner'snew text end actual damages. Any claim for exemplary damages brought pursuant
to this section must be commenced within four years after the date of the alleged violation.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021.
new text end

Sec. 24.

Minnesota Statutes 2020, section 325N.18, subdivision 4, is amended to read:


Subd. 4.

Criminal penalty.

Any deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser who engages in any
practice which would operate as a fraud or deceit upon deleted text begina foreclosed homeownerdeleted text endnew text begin an ownernew text end
may, upon conviction, be fined not more than $50,000 or imprisoned not more than one
year, or both. Prosecution or conviction for any one of the violations does not bar prosecution
or conviction for any other offenses.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021.
new text end

Sec. 25.

Minnesota Statutes 2020, section 325N.18, subdivision 5, is amended to read:


Subd. 5.

Failure of transaction.

Failure of the parties to complete the reconveyance
transaction, in the absence of additional misconduct, shall not subject deleted text begina foreclosuredeleted text endnew text begin an equitynew text end
purchaser to the criminal penalties under this section or section 325N.07.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021.
new text end

Sec. 26.

Minnesota Statutes 2020, section 325N.18, subdivision 6, is amended to read:


Subd. 6.

Stay of eviction action.

(a) A court hearing an eviction action against deleted text begina
foreclosed homeowner
deleted text endnew text begin an ownernew text end must issue an automatic stay, without imposition of a bond,
if a defendant makes a prima facie showing that the defendant:

(1) has (i) commenced an action concerning a deleted text beginforeclosuredeleted text endnew text begin propertynew text end reconveyance; (ii)
asserts a defense under section 504B.121 that the property that is the subject of the eviction
action is also the subject of a deleted text beginforeclosuredeleted text endnew text begin propertynew text end reconveyance in violation of sections
325N.10 to 325N.17; or (iii) asserts a claim or affirmative defense of fraud, false pretense,
false promise, misrepresentation, misleading statement, or deceptive practice, in connection
with a deleted text beginforeclosuredeleted text endnew text begin propertynew text end reconveyance;

(2) owned the deleted text beginforecloseddeleted text endnew text begin coverednew text end residence;

(3) conveyed title to the deleted text beginforecloseddeleted text endnew text begin coverednew text end residence to a third party upon a promise
that the defendant would be allowed to occupy the deleted text beginforecloseddeleted text endnew text begin coverednew text end residence or other
real property in which the deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser or a person acting in participation
with the deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser has an interest and that the deleted text beginforecloseddeleted text endnew text begin coverednew text end residence
or other real property would be the subject of a deleted text beginforeclosuredeleted text endnew text begin propertynew text end reconveyance; and

(4) since the conveyance, has continuously occupied the deleted text beginforecloseddeleted text endnew text begin coverednew text end residence
or other real property in which the deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser or a person acting in
participation with the deleted text beginforeclosuredeleted text endnew text begin equitynew text end purchaser has an interest.

For purposes of this subdivision, notarized affidavits are acceptable means of proof to
meet the defendant's burden. Upon good cause shown, a defendant may request and the
court may grant up to an additional two weeks to produce evidence required to make the
prima facie showing.

(b) A court may award to a plaintiff a $500 penalty upon a showing that the defendant
filed a frivolous claim or asserted a frivolous defense.

(c) The automatic stay expires upon the later of:

(1) the failure of the deleted text beginforeclosed homeownerdeleted text endnew text begin ownernew text end to commence an action in a court of
competent jurisdiction in connection with a deleted text beginforecloseddeleted text endnew text begin propertynew text end reconveyance transaction
within 90 days after the issuance of the stay; or

(2) the issuance of an order lifting the stay by a court hearing claims related to the
deleted text begin foreclosuredeleted text endnew text begin propertynew text end reconveyance.

(d) If, after the expiration of the stay or an order lifting the stay, a court finds that the
defendant's claim or defense was asserted in bad faith and wholly without merit, the court
may impose a sanction against the defendant of $500 plus reasonable attorney fees.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021.
new text end