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SF 241

4th Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

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

Bill Text Versions

Engrossments
Introduction Posted on 01/23/2007
1st Engrossment Posted on 03/07/2007
2nd Engrossment Posted on 03/19/2007
3rd Engrossment Posted on 04/17/2007
4th Engrossment Posted on 05/17/2007

Current Version - 4th Engrossment

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A bill for an act
relating to commerce; prohibiting sale of certain information arising from
a mortgage loan application; regulating homestead exemptions and the
enforcement of judgments involving the sale of homestead property; providing
limitations on actions for damages based on services or construction to improve
real property; regulating the redemption of mortgaged lands by creditors;
amending Minnesota Statutes 2006, sections 13C.01, by adding a subdivision;
510.02; 510.05; 541.051; 550.175, subdivisions 1, 4, by adding a subdivision;
550.18; 550.19; 550.22; 550.24; 580.24; proposing coding for new law in
Minnesota Statutes, chapter 550.

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

Section 1.

Minnesota Statutes 2006, section 13C.01, is amended by adding a
subdivision to read:


new text begin Subd. 3. new text end

new text begin Sale of certain information prohibited. new text end

new text begin A consumer reporting agency
or any other business entity may not sell to, or exchange with, a third party, unless the
third party holds an existing mortgage loan on the property, the existence of a credit
inquiry arising from a consumer mortgage loan application when the sale or exchange is
triggered by an inquiry made in response to an application for credit. This subdivision
does not apply to information provided by a mortgage originator or servicer to a third
party providing services in connection with the mortgage loan origination or servicing;
a proposed or actual securitization; secondary market sale, including sales of servicing
rights; or similar transaction related to the consumer mortgage loan.
new text end

Sec. 2.

Minnesota Statutes 2006, section 510.02, is amended to read:


510.02 AREA AND VALUE; HOW LIMITED.

new text begin Subdivision 1. new text end

new text begin Exemption. new text end

The homestead may include any quantity of land not
exceeding 160 acresdeleted text begin, and not included in the laid out or platted portion of any city. If the
homestead is within the laid out or platted portion of a city, its area must not exceed
one-half of an acre. The value of the homestead exemption
deleted text endnew text begin. The exemption per homesteadnew text end,
whether the exemption is claimed deleted text beginjointly or individuallydeleted text endnew text begin by one or more debtorsnew text end, may not
exceed deleted text begin$200,000deleted text end new text begin$300,000 new text endor, if the homestead is used primarily for agricultural purposes,
deleted text begin $500,000deleted text endnew text begin $750,000new text end, exclusive of the limitations set forth in section 510.05.

new text begin Subd. 2. new text end

new text begin Adjustment of dollar amounts. new text end

new text begin The dollar amounts in subdivision 1 must
change periodically in the manner provided for under section 550.37, subdivision 4a. The
commissioner of commerce shall include the changes in the dollar amounts as part of the
announcement and publication made under those provisions.
new text end

Sec. 3.

Minnesota Statutes 2006, section 510.05, is amended to read:


510.05 LIMITATIONS.

deleted text begin Suchdeleted text endnew text begin The amount of the new text end homestead exemptionnew text begin shall not be reduced by andnew text end shall
not extend to any mortgage lawfully obtained thereon, to any valid lien for taxes or
assessments, to a claim filed pursuant to section 256B.15 or section 246.53 deleted text beginordeleted text endnew text begin,new text end to any
charge arising under the laws relating to laborers or material suppliers' liensnew text begin or to any
charge obtained pursuant to a valid waiver of the homestead exemption
new text end.

Sec. 4.

Minnesota Statutes 2006, section 541.051, is amended to read:


541.051 LIMITATION OF ACTION FOR DAMAGES BASED ON SERVICES
OR CONSTRUCTION TO IMPROVE REAL PROPERTY.

Subdivision 1.

Limitation; service or construction of real property;
improvements.

(a) Except where fraud is involved, no action by any person in contract,
tort, or otherwise to recover damages for any injury to property, real or personal, or for
bodily injury or wrongful death, arising out of the defective and unsafe condition of an
improvement to real property, deleted text beginnor any action for contribution or indemnity for damages
sustained on account of the injury,
deleted text end shall be brought against any person performing or
furnishing the design, planning, supervision, materials, or observation of construction
or construction of the improvement to real property or against the owner of the real
property more than two years after discovery of the injury deleted text beginor, in the case of an action for
contribution or indemnity, accrual of the cause of action
deleted text end, nordeleted text begin,deleted text end in any event shall such a
cause of action accrue more than ten years after substantial completion of the construction.
Date of substantial completion shall be determined by the date when construction is
sufficiently completed so that the owner or the owner's representative can occupy or use
the improvement for the intended purpose.

(b) new text beginNotwithstanding paragraph (a), an action for contribution or indemnity arising
out of the defective and unsafe condition of an improvement to real property may be
brought no later than two years after the cause of action for contribution or indemnity has
accrued, regardless of whether it accrued before or after the ten-year period referenced in
paragraph (a).
new text end

new text begin (c) new text endFor purposes of paragraph (a), a cause of action accrues upon discovery of the
injury deleted text beginor,deleted text endnew text begin; provided, however,new text end in the case of an action for contribution or indemnitynew text begin under
paragraph (b)
new text end, deleted text beginupondeleted text endnew text begin a cause of action accrues upon the earlier of commencement of the
action against the party seeking contribution or indemnity, or
new text end payment of a final judgment,
arbitration award, or settlement arising out of the defective and unsafe condition.

deleted text begin (c)deleted text endnew text begin (d)new text end Nothing in this section shall apply to actions for damages resulting from
negligence in the maintenance, operation or inspection of the real property improvement
against the owner or other person in possession.

deleted text begin (d)deleted text endnew text begin (e)new text end The limitations prescribed in this section do not apply to the manufacturer or
supplier of any equipment or machinery installed upon real property.

Subd. 2.

Action allowed; limitation.

Notwithstanding the provisions of subdivision
1,new text begin paragraph (a),new text end in the case of deleted text beginandeleted text endnew text begin a cause ofnew text end action which accrues during the ninth or tenth
year after substantial completion of the construction, an action to recover damages may be
brought within two years after the date on which the new text begincause of new text endaction accrued, but in no
event may new text beginsuch new text endan action be brought more than 12 years after substantial completion of
the construction.new text begin Nothing in this subdivision shall limit the time for bringing an action for
contribution or indemnity.
new text end

Subd. 3.

Not construed.

Nothing in this section shall be construed as extending the
period prescribed by the laws of this state for the bringing of any action.

Subd. 4.

Applicability.

For the purposes of actions based on breach of the statutory
warranties set forth in section 327A.02, or to actions based on breach of an express written
warranty, such actions shall be brought within two years of the discovery of the breach. In
the case of an action under section 327A.05, which accrues during the ninth or tenth year
after the warranty date, as defined in section 327A.01, subdivision 8, an action may be
brought within two years of the discovery of the breach, but in no event may an action
under section 327A.05 be brought more than 12 years after the effective warranty date.
new text begin An action for contribution or indemnity arising out of actions described in this subdivision
may be brought no later than two years after the earlier of commencement of the action
against the party seeking contribution or indemnity, or payment of a final judgment,
arbitration award, or settlement arising out of the breach.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from June 30, 2006.
new text end

Sec. 5.

Minnesota Statutes 2006, section 550.175, subdivision 1, is amended to read:


Subdivision 1.

new text begin Order directing sale of real property. new text end

new text begin The executing creditor
must obtain an order from the court directing a sale of the real property that includes
a homestead before service of the notice of execution on real property containing the
homestead of the debtor. The order shall contain the following findings:
new text end

new text begin (1) whether the real property is the homestead of a nondebtor;
new text end

new text begin (2) the amount of the debtor's homestead exemption, if any; and
new text end

new text begin (3) whether the fair market value of the real property exceeds the sum of the debtor's
homestead exemption and the present encumbrances.
new text end

new text begin If the court finds that there is no nondebtor with a valid homestead interest in the
real property and that the fair market value of the homestead real property exceeds the
sum of the debtor's homestead exemption and the present encumbrances, the court shall
order a sale of the real property for cash or cash equivalents to the extent of the homestead
exemption at the time of sale.
new text end

new text begin Subd. 1a. new text end

Notification of homestead designation.

If real property is to be sold on
execution and the property contains a portion of the homestead of the debtor, the debtor
must be notified by the executing creditor that the homestead may be sold and redeemed
separately from the remaining property. The notice in subdivision 2 must be included in
the notice of execution served on the debtor under section 550.19.

Sec. 6.

Minnesota Statutes 2006, section 550.175, subdivision 4, is amended to read:


Subd. 4.

Sale of property.

(a) If the sheriff receives a homestead property
designation under subdivision 3, the sheriff must offer and sell the designated homestead
property, and the remaining property, separately, unless the executing creditor denies the
right to the exemption, objects to the property designated, or claims the value exceeds
the exemption.

(b) If the executing creditor is dissatisfied with the homestead property designation
or the debtor's valuation of the property, upon proper motion to the district court of the
county in which any part of the property is located, the executing creditor is entitled to
a court approved designation of the homestead and a court determination of value. The
court shall either approve the debtor's designation or cause the property to be surveyed
and order a homestead designation consistent with the standards of subdivision 3 and
require an appraisal of fair market value, as applicable. The court's designation of the
homestead property must conform to the debtor's request, to the extent not inconsistent
with the standards of subdivision 3.

(c) The court, in determining appraised value, shall review any appraisals provided
by the debtor and executing creditor and may require a court appointed independent
appraisal. The appraisals shall evaluate the property's fair market value, net of reasonable
costs of sale.

(d) If the court determines that the property claimed as a homestead exceeds in value
the amount of the homestead exemption or if the court determines that the property cannot
be divided without material injury, the court shall order the sale of the entire property,
including the designated homesteaddeleted text begin. Out of the proceeds of the sale, the court shall pay
the debtor the amount of the homestead exemption and apply the balance of the proceeds
of the sale on the execution
deleted text endnew text begin for cash or cash equivalents to the extent of the homestead
exemption
new text endnew text beginat the time of salenew text end.

(e) At the sale, no bid may be accepted unless it exceeds the amount of the
homestead exemption. If no bid exceeds the exemption, the homestead is exempt.

(f) The cost of any court ordered survey or appraisal and of the sale must be collected
on the execution, if the debtor designated as the debtor's homestead a greater quantity of
property, property of greater value than the debtor was entitled to, or designated a parcel
that does not meet the standards of subdivision 3. In all other cases, the costs shall be
borne by the executing creditor.

Sec. 7.

Minnesota Statutes 2006, section 550.175, is amended by adding a subdivision
to read:


new text begin Subd. 6. new text end

new text begin Real property not subject to execution. new text end

new text begin Real property that includes a
homestead as defined under section 510.01 is not subject to execution under this chapter if
there is a nondebtor with:
new text end

new text begin (1) homestead rights under sections 507.02 and 510.01 to 510.04;
new text end

new text begin (2) rights as a joint tenant or life tenant; or
new text end

new text begin (3) rights to take the homestead under section 524.2-402.
new text end

Sec. 8.

Minnesota Statutes 2006, section 550.18, is amended to read:


550.18 NOTICE OF SALE.

Before the sale of property on execution notice shall be given as follows:

(1) if the sale be of personal property, by giving ten days posted notice of the time
and place thereof;

(2) if the sale be of real property, on execution or on judgment, by six weeks posted
and published notice of the time and place thereof, describing the property with sufficient
certainty to enable a person of common understanding to identify it.

new text begin (3) A judgment creditor shall record a certified copy of the order directing sale of
real property issued pursuant to section 550.175, if the real property is a homestead,
with the county recorder or registrar of titles as appropriate in the county in which the
real property is located before the first date of publication of the notice of sale required
under section 550.18, clause (2).
new text end

An officer who sells without such notice shall forfeit $100 to the party aggrieved, in
addition to paying actual damages; and a person who before the sale or the satisfaction of
the execution, and without the consent of the parties, takes down or defaces the notice
posted, shall forfeit $50; but the validity of the sale shall not be affected by either act,
either as to third persons or parties to the action.

Sec. 9.

Minnesota Statutes 2006, section 550.19, is amended to read:


550.19 SERVICE ON JUDGMENT DEBTOR.

deleted text begin At or before the time of posting notice of sale, the officer shall serve a copy of the
execution and inventory, and of such notice, upon the judgment debtor, if the debtor be a
resident of the county, in the manner required by law for the service of a summons in a
civil action.
deleted text end new text begin A judgment creditor must, at least four weeks before the appointed time of
sale, serve a copy of the notice of sale in like manner as a summons in a civil action in the
district court upon the judgment debtor if the judgment debtor is a resident of the county
and upon any person in possession of the homestead other than the judgment debtor.
In addition, the notice of sale must also be served upon all persons who have recorded
a request for notice in accordance with section 580.032.
new text end

Sec. 10.

new text begin [550.206] REPORT OF SALE OF HOMESTEAD ON EXECUTION;
CONFIRMATION; RESALE.
new text end

new text begin Upon sale of a homestead on execution, the sheriff shall file a report of the sale with
the court. Upon the filing of the report of sale, the court shall grant an order confirming
the sale, or, if it appears upon due examination that justice has not been done, the court
may order a resale on terms the court determines are just. Upon confirmation of the sale
and execution of the certificate of sale, the sheriff shall hold the amount of the homestead
exemption in trust for the judgment debtor until the debtor vacates the property, or the
redemption period expires, whichever occurs first. The balance of the proceeds of the
sale shall be applied to the execution. The sheriff shall pay any surplus thereafter in the
manner provided in section 580.09.
new text end

Sec. 11.

Minnesota Statutes 2006, section 550.22, is amended to read:


550.22 CERTIFICATE OF SALE OF REALTY.

When a sale of real property is made upon execution, or pursuant to a judgment or
order of a court, unless otherwise specified therein, the officer shall execute new text beginand deliver
new text endto the purchaser a certificate containing:

(1) a description of the execution, judgment, or order;

(2) a description of the property;

(3) the date of the sale and the name of the purchaser;

(4) the price paid for each parcel separately;

(5) if subject to redemption, the time allowed by law therefornew text begin;
new text end

new text begin (6) the amount of the debtor's homestead exemption, if any, as determined under
section 550.175
new text end.

Such certificate shall be executed, acknowledged, and recorded in the manner
provided by law for a conveyance of real property, shall be prima facie evidence of the
facts deleted text beginthereindeleted text end stated, and, upon expiration of the time for redemption, shall operate as
a conveyance to the purchaser of all the right, title, and interest of the person whose
property is sold in and to the same, at the date of the lien upon which the same was sold.new text begin
Any person desiring to perpetuate evidence that any real property sold under this section
was not homestead real property may procure an affidavit by the person enforcing the
judgment, or that person's attorney, or someone having knowledge of the facts, setting
forth that the real property was not homestead real property. The affidavit shall be
recorded by the county recorder or registrar of titles, and the affidavit and certified copies
of the affidavit shall be prima facie evidence of the facts stated in the affidavit.
new text end

Sec. 12.

Minnesota Statutes 2006, section 550.24, is amended to read:


550.24 REDEMPTION OF REALTY.

(a) Upon the sale of real property, if the estate sold is less than a leasehold of two
years' unexpired term, the sale is absolute. In all other cases the property sold, or any
portion thereof which has been sold separately, is subject to redemption as provided
in this section.

(b) The judgment debtor, the debtor's heirs, successors, legal representatives, or
assigns may redeem within one year after the day of salenew text begin, or order confirming sale if the
property is a homestead,
new text end by paying, to the purchaser or the officer making the sale, the
amount for which the property was sold with interestnew text begin, on the amount of the sale in excess
of the homestead exemption,
new text end at the judgment rate and if the purchaser is a creditor having
a prior lien, the amount thereof, with interest at the judgment ratenew text begin together with any costs
as provided in sections 582.03 and 582.031
new text end.

(c) If there is no redemption during the debtor's redemption period, creditors having
a lien, legal or equitable, on the property or some part thereof, subsequent to that on
which it was sold may redeem in the manner provided for redemption by creditors of the
mortgagor in section 580.24, in the order of their respective liens.

new text begin (d) If the property is abandoned during the judgment debtor's redemption period,
the person holding the sheriff's certificate may request that the court reduce the judgment
debtor's redemption period to five weeks using the procedures provided for a foreclosure
by action in section 582.032, subdivision 5.
new text end

Sec. 13.

Minnesota Statutes 2006, 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 seven 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 seven
days after the time allowed the prior lienholder by paying the amount required under this
section. However, no creditor is entitled to redeem unless, within 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 in each office where the notice is recorded all documents necessary to
create the lien on the mortgaged premises and to evidence the creditor's ownership of 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 seven-day 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.new text begin 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.
new text end
All mechanic's lienholders who have coordinate liens shall have one combined seven-day
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
person 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 redemption; plus

(3) the amount claimed due on the person's lien, as shown on the affidavit under
section 580.25, clause (3).

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.