Minnesota Legislature
HF 1027
1st Engrossment - 94th Legislature (2025 - 2026) Posted on 04/10/2025 04:04pm
Bill Text Versions
| Engrossments | ||
|---|---|---|
| Introduction | Posted on 02/14/2025 | |
| 1st Engrossment | Posted on 04/01/2025 |
Current Version - 1st Engrossment
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7.31 7.32
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8.22 8.23
8.24 8.25 8.26 8.27 8.28 8.29 8.30 8.31 8.32 8.33 8.34 9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9 9.10 9.11 9.12 9.13
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A bill for an act
relating to real property; providing for mortgage foreclosure redemption and
surpluses; amending Minnesota Statutes 2024, sections 272.45; 580.10; 580.225;
580.24; 580.25; 580.26; 580.28; 582.03, subdivisions 1, 2; 582.043, subdivision
6.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2024, section 272.45, is amended to read:
272.45 TAXES PAID BY TENANT, OCCUPANT, OR OTHER PERSON BECOME
LIEN, UPON NOTICE FILED WITH COUNTY RECORDER OR REGISTRAR OF
TITLES.
When any past due or delinquent tax on land is paid by any occupant, tenant, or person
with deleted text begin andeleted text end new text begin a legal or equitablenew text end interest in the land other than a lien, or a person acting on that
person's behalf, which, by agreement or otherwise, ought to have been paid by the owner,
lessor, or other party in interest, such occupant, tenant, or person may recover by action the
amount which such owner, lessor, or party in interest ought to have paid, with interest
thereon at the rate of 12 percent per annum, or may retain the same from any rent due or
accruing from the person to such owner or lessor for land on which such tax is so paid. A
person making a payment under this section may file with the county recorder or registrar
of titles of the proper county a deleted text begin noticedeleted text end new text begin sworn statementnew text end stating the amount and date of such
payment, new text begin with a copy of the receipt attached, new text end and stating thenew text begin legal or equitablenew text end interest
claimed in the land, with a description of the land against which the taxes were charged;
and the same shall thereupon be a liennew text begin as of the date of recording of the sworn statementnew text end
upon such land in favor of the person paying the same until the same is paid. The county
recorder shall record such deleted text begin noticedeleted text end new text begin sworn statementnew text end in the indices maintained by the county
recorder. The registrar of titles shall record the deleted text begin noticedeleted text end new text begin sworn statementnew text end on the certificate of
title for the land. Upon the payment of any such lien, the person filing such deleted text begin noticedeleted text end new text begin sworn
statementnew text end shall satisfy the same of record.
Sec. 2.
Minnesota Statutes 2024, section 580.10, is amended to read:
580.10 SURPLUS.
new text begin Subdivision 1. new text end
new text begin Demand for surplus. new text end
In all cases not provided for in section 580.09, new text begin and
except as required by subdivision 3, new text end if, after sale of any real estate, made as herein prescribed,
there remains in the hands of the officer making the sale any surplus money, after satisfying
the mortgage, with interest, taxes paid, and costs of sale, the surplus shall be paid over by
such officer, on demand, to the mortgagor, the mortgagor's legal representatives or assigns.new text begin
Any surplus of $100 or greater shall be held by the sheriff for the duration of the time
allowed for redemption under section 580.23 or 582.032, whichever is applicable, and if
requested by the owner, applied toward a redemption as described in subdivision 3. If there
is no redemption under section 580.23 or 582.032, a surplus of $100 or greater shall be paid
first to junior creditors with liens of record at the time of the sheriff's sale in order of priority,
if demanded by a junior creditor within the time allowed for redemption under section
580.23 or 582.032, whichever is applicable, and thereafter to the owner of record at the time
of the sheriff's sale, or as provided by court order under section 580.28. A demand by a
party other than the owner shall be accompanied by an affidavit stating the amount remaining
unpaid and the interest creating a right to the surplus.
new text end
new text begin Subd. 2. new text end
new text begin Notice of surplus. new text end
new text begin
When there is a surplus of $100 or greater, the sheriff shall
notify the owner by mail sent to the property address, or if no street address is assigned for
the property on the property tax statement, to the taxpayer's address on the property tax
statement, that a surplus exists and to call the sheriff's office for more information about
the surplus and how to make a claim to the surplus. The notice shall also include contact
information for the Minnesota Homeownership Center and a statement to call the Minnesota
Homeownership Center for information about redemption and surplus.
new text end
new text begin Subd. 3. new text end
new text begin Request by owner to have surplus applied. new text end
new text begin
At any time during the owner's
redemption period, the owner of record at the time of the sheriff's sale may submit a written
request to the sheriff to have the surplus applied to the redemption amount. The right to
have the surplus applied to the redemption amount is not transferable to any subsequent
owner.
new text end
new text begin Subd. 4. new text end
new text begin Surplus less than $100. new text end
new text begin
If a surplus remains under $100, the sheriff may pay
the surplus amount to the owner of record at the time of the sheriff's sale.
new text end
new text begin Subd. 5. new text end
new text begin Resolution of competing claims. new text end
new text begin
If there are competing claims or if it appears
to the sheriff that any claim is not meritorious, the sheriff may apply to the court in the
county in which the sale was made and set forth by petition the facts then known to the
sheriff, and the names and addresses of the owner and all known claimants to the surplus,
at no cost to the sheriff. The sheriff shall retain the surplus until further order of the court
under section 580.28. If a hearing is scheduled, the sheriff may participate in an advisory
capacity. The sheriff shall be represented by the county attorney. The sheriff shall give
notice of the opening of the court file to the holders of the claims by service of the petition
in the manner of a summons under the Rules of Civil Procedure. Failure of an owner to
participate in the court action does not waive the right of that owner to the surplus.
new text end
Sec. 3.
Minnesota Statutes 2024, section 580.225, is amended to read:
580.225 SATISFACTION OF deleted text begin JUDGMENTdeleted text end new text begin MORTGAGEnew text end .
The amount received from foreclosure sale under this chapter is full satisfaction of the
mortgage debt, except as provided in section 582.30.
Sec. 4.
Minnesota Statutes 2024, section 580.24, is amended to read:
580.24 REDEMPTION BY CREDITOR.
(a) If no redemption is made by the mortgagor, the mortgagor's personal representatives
or assigns, the most senior creditor having a legal or equitable lien upon the mortgaged
premises, or some part of it, subsequent to the foreclosed mortgage, may redeem within
deleted text begin sevendeleted text end new text begin 14new text end days after the expiration of the redemption period determined under section 580.23
or 582.032, whichever is applicable; and each subsequent creditor having a lien may redeem,
in the order of priority of their respective liens, within deleted text begin sevendeleted text end new text begin 14new text end days after the time allowed
the prior lienholder by paying the amount required under this section. However, no creditor
is entitled to redeem unless, one week or more prior to the expiration of the period allowed
for redemption by the mortgagor, the creditor:
(1) records with each county recorder and registrar of titles where the foreclosed mortgage
is recorded a notice of the creditor's intention to redeem;
(2) records with each county recorder and registrar of titles where the notice of the
creditor's intention to redeem is recorded all documents necessary to create the lien on the
mortgaged premises and to evidence the creditor's ownership of the lien, including a copy
of any money judgment necessary to create the lien; and
(3) after complying with clauses (1) and (2), delivers to the sheriff who conducted the
foreclosure sale or the sheriff's successor in office a copy of each of the documents required
to be recorded under clauses (1) and (2), with the office, date and time of filing for record
stated on the first page of each document.
The sheriff shall maintain for public inspection all documents delivered to the sheriff
and shall note the date of delivery on each document. The sheriff may charge a fee of $100
for the documents delivered to the sheriff relating to each lien. The sheriff shall maintain
copies of documents delivered to the sheriff for a period of six months after the end of the
mortgagor's redemption period.
(b) Saturdays, Sundays, legal holidays, and the first day following the expiration of the
prior redemption period must be included in computing the deleted text begin seven-daydeleted text end new text begin 14-daynew text end redemption
period. When the last day of the period falls on Saturday, Sunday, or a legal holiday, that
day must be omitted from the computation. The order of redemption by judgment creditors
subsequent to the foreclosed mortgage shall be determined by the order in which their
judgments were entered as memorials on the certificate of title for the foreclosed premises
or docketed in the office of the district court administrator if the property is not registered
under chapter 508 or 508A, regardless of the homestead status of the property. All mechanic's
lienholders who have coordinate liens shall have one combined deleted text begin seven-daydeleted text end new text begin 14-daynew text end period
to redeem.
(c) The amount required to redeem from the holder of the sheriff's certificate of sale is
the amount required under section 580.23. The amount required to redeem from a deleted text begin persondeleted text end new text begin
creditornew text end holding a certificate of redemption is:
(1) the amount paid to redeem as shown on the certificate of redemption; plus
(2) interest on that amount to the date of redemptionnew text begin at the rates stated on the certificate
of sale and the affidavit provided by section 580.25, clause (3), or six percent if no rate is
otherwise statednew text end ; plus
(3) the amount claimed due on the deleted text begin person'sdeleted text end new text begin creditor'snew text end lien, as shown on the affidavit
under section 580.25, clause (3).
new text begin (d) If the sheriff determines there is a dispute or question of validity about a redemption,
the sheriff may accept the amount required to redeem, together with documents in support
of the redemption, from one or more creditors competing for or claiming a right to redeem,
without executing and delivering a certificate of redemption, and the sheriff may commence
an action under section 580.28 at no cost to the sheriff. A creditor subject to a dispute or
question of validity about a redemption may submit the matter for adjudication of the court
under section 580.28. If the sheriff does not execute and deliver a certificate of redemption
under this section, all further junior creditor redemption periods are stayed until determined
by the court, and all junior creditors who have recorded notices of intent to redeem should
be included in the action under section 580.28. new text end The amount required to redeem may be paid
to the holder of the sheriff's certificate of sale or the certificate of redemption, as the case
may be, or to the sheriff for the holder.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for redemptions occurring after January
1, 2026.
new text end
Sec. 5.
Minnesota Statutes 2024, section 580.25, is amended to read:
580.25 new text begin CREDITOR new text end REDEMPTION, HOW MADE.
Redemption shall be made as provided in this section.
The deleted text begin persondeleted text end new text begin creditornew text end desiring to redeem shall pay the amount required by law for the
redemption, and shall produce to the person or officer receiving the redemption payment:
(1) a copy of the docket of the judgment, or of the recorded deed or mortgage, or of the
record or files evidencing any other lien under which the deleted text begin persondeleted text end new text begin creditornew text end claims a right to
redeem;
(2) a copy of any recorded assignment necessary to evidence the deleted text begin person'sdeleted text end new text begin creditor'snew text end
ownership of the lien. If the redemption is under an assignment of a judgment, the assignment
shall be filed in the court entering the judgment, as provided by law, and the deleted text begin persondeleted text end new text begin creditornew text end
so redeeming shall produce a copy of it and of the record of its filing, and the copy of the
docket shall show that the proper entry was made upon the docket. No further evidence of
the assignment of the judgment is required unless the mortgaged premises or part of it is
registered property, in which case the judgment and all assignments of the judgment must
be entered as a memorial upon the certificate of title to the mortgaged premises and a copy
of the judgment and each assignment with the certificate of record endorsed on it must be
produced; and
(3) an affidavit of the deleted text begin persondeleted text end new text begin creditornew text end or the deleted text begin person'sdeleted text end new text begin creditor'snew text end agent, deleted text begin showing the amount
then actually claimed due on the person'sdeleted text end new text begin identifying thenew text end lien deleted text begin and required to be paid on the
lien in order to redeem from the persondeleted text end new text begin under which the creditor claims a right to redeem
and stating the amount then actually claimed due and owing on the lien and stating the
interest rate on the liennew text end . Additional fees and charges may be claimed due only as provided
in section 582.03.new text begin The sheriff receiving the affidavit may furnish a copy of the affidavit to
any interested party, upon request.
new text end
If redemption is made to the sheriff, the sheriff may charge a fee of $250 for issuing the
certificate of redemption and any related service. No other fee may be charged by the sheriff
for a redemption.
Within 24 hours after a redemption is made, new text begin or as soon as reasonably possible, new text end the person
redeeming shall cause the documents so required to be produced to be recorded with the
county recorder, or registrar of titles, new text begin or both when appropriate, new text end who may receive fees as
prescribed in section 357.18 or 508.82. If the redemption is made at any place other than
the county seat, it is sufficient forthwith to deposit the documents in the nearest post office,
addressed to the recorder or registrar of titles, with the postage prepaidnew text begin within 24 hours after
redemption is made or as soon as reasonably possiblenew text end . A person recording documents
produced for redemption shall, on the same day, deliver copies of the documents to the
sheriff for public inspection. The sheriff may receive a fee of $20 for the documents delivered
following a redemption. The sheriff shall note the date of delivery on the documents and
shall maintain for public inspection all documents delivered to the sheriff for a period of
six months after the end of the mortgagor's redemption period.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for redemptions occurring after January
1, 2026.
new text end
Sec. 6.
Minnesota Statutes 2024, section 580.26, is amended to read:
580.26 CERTIFICATE OF REDEMPTION; RECORD.
The person or officer from whom such redemption is made shall make and deliver to
the person redeeming a certificate executed and acknowledged in the same manner as a
conveyance, containing:
(1) new text begin if redeemed under section 580.23 or 582.032, new text end the name of the deleted text begin persondeleted text end new text begin mortgagor or
the mortgagor's legal representative or assigneenew text end redeeming,new text begin and if redeemed under section
580.25, the name of the creditor redeeming,new text end and the amount paid deleted text begin by the person on such
redemptiondeleted text end new text begin to redeemnew text end ;
(2) a description of the sale for which such redemption is made, and of the property
redeemed;
(3) a statement of the claim upon which such redemption is made and, if upon a lien,
the amount claimed to be due thereon at the date of redemption.
If redemption is made by the owner of the property sold, the owner's heirs, personal
representatives, or assigns, such certificate shall be recorded within deleted text begin four daysdeleted text end new text begin one weeknew text end
after the expiration of the period allowed by law to the owner for redemption and, if made
by a creditor holding a lien, the certificate shall be recorded within deleted text begin four daysdeleted text end new text begin one weeknew text end after
such redemption. Unless so recorded, the certificate shall be void deleted text begin asdeleted text end new text begin onlynew text end against any person
in good faith redeeming from the same person or lien.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for redemptions occurring after January
1, 2026.
new text end
Sec. 7.
Minnesota Statutes 2024, section 580.28, is amended to read:
580.28 ACTION TO SET ASIDE MORTGAGE; FORECLOSURE; REDEMPTION.
When an action is brought wherein it is claimed that any mortgage as to the plaintiff or
person for whose benefit the action is brought is fraudulent or void, or has been paid or
discharged, in whole or in part, or the relative priority or the validity of liensnew text begin , redemption
rights, or rights to any surplusnew text end is disputed, if such mortgage has been foreclosed by
advertisement, and the time for redemption from the foreclosure sale will expire before final
judgment in such action, the plaintiff or beneficiary having the right to redeem, for the
purpose of saving such right in case the action fails, may deposit with the sheriff before the
time of redemption expires the amount for which the mortgaged premises were sold, with
interest thereon to the time of deposit, together with deleted text begin a bond to the holder of the sheriff's
certificate of sale, in an amount and with sureties to be approved by the sheriff, conditioned
to pay all interest that may accrue or be allowed on such deposit if the action faildeleted text end new text begin a separate
deposit with the sheriff of one year's interest on the amount depositednew text end . The person shall, in
writing, notify such sheriff that deleted text begin the person claims the mortgage to be fraudulent or void, or
to have been paid or discharged, in whole or in part, as the case may be, and thatdeleted text end such action
is pending, and direct the sheriff to retain such money deleted text begin and bonddeleted text end until final judgmentnew text begin or
other order of the courtnew text end . deleted text begin In case such action failsdeleted text end new text begin If so ordered by the courtnew text end , such deposit
shall operate as a redemption of the premises from such foreclosure sale, and entitle the
plaintiff to a certificate thereof. Such foreclosure, deposit, deleted text begin bond,deleted text end and notice shall be brought
to the attention of the court by supplemental complaint in the action, and the judgment shall
determine the validity of the foreclosure sale, and the rights of the parties to the moneys
deleted text begin and bonddeleted text end so deposited, which shall be paid and delivered by the sheriff as directed by such
judgment upon delivery to the sheriff of a certified copy thereof. The remedy herein provided
shall be in addition to other remedies now existing.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for redemptions occurring after January
1, 2026.
new text end
Sec. 8.
Minnesota Statutes 2024, section 582.03, subdivision 1, is amended to read:
Subdivision 1.
Allowable costs collectable upon redemption.
The holder of any sheriff's
certificate of sale, from a foreclosure by advertisement or action of a mortgage or lien or
execution, or the holder of any certificate of redemption as a junior creditor during the
period of redemption, may pay and claim the following on redemption: any taxes or
assessments on which any penalty would otherwise accrue, and any costs of a hazard
insurance policy for the holder's interest in the mortgaged premises incurred for the period
of holding the sheriff's certificate, any costs incurred when an order to reduce a mortgagor's
redemption period under section 582.032 is entered, including costs and disbursements
awarded under section 582.032, subdivision 9, any fees paid to the county recorder, registrar
of titles, or sheriff to obtain or record the certificates of sale or redemption or notices of
intention to redeem, any reasonable fees paid to licensed real estate brokers for broker price
opinions or to licensed appraisers for appraisals, any deed tax paid to file a certificate of
redemption, reasonable attorney fees incurred after the foreclosure sale not to exceed one-half
of the amount authorized by section 582.01, any costs incurred under section 582.031, and
any interest or installment of principal upon any prior or superior mortgage, lien, or contract
for deed in default or that becomes due during the period of redemption. In all such cases,
the costs so paid and claimed due, with interestnew text begin from the date of payment at the rate stated
in the certificate of sale or at six percent if no rate is statednew text end , shall be a part of the sum required
to be paid to redeem from such sale. No other costs, fees, interest, or other amount may be
added to the amount necessary to redeem.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for affidavits filed with the sheriff after
January 1, 2026.
new text end
Sec. 9.
Minnesota Statutes 2024, section 582.03, subdivision 2, is amended to read:
Subd. 2.
Affidavit of allowable costs.
Any payments made and claimed due under
subdivision 1 shall be proved by the affidavit of the holder of the sheriff's certificate or its
agent or attorney, itemizing each of the allowable costsnew text begin and the date of paymentnew text end and
describing the premises. The affidavit must be filed with the sheriff of the county in which
the sale was held at any time prior to expiration of the mortgagor's redemption period. Upon
written request by the sheriff, the holder of the sheriff's certificate or certificate of redemption
shall provide an affidavit of allowable costs to the sheriff within seven days of the date of
the request by the sheriff. If the mortgagor does not redeem within seven days after the
affidavit is filed, the holder of the sheriff's certificate may file a supplemental affidavit if
additional allowable costs are incurred during the redemption period. If the holder of the
sheriff's certificate or certificate of redemption fails to respond to the sheriff's request within
seven days, the sheriff may calculate a redemption amount pursuant to section 580.23,
subdivision 1, and issue a certificate of redemption for that amount. If the time allowed to
redeem is less than seven days from the expiration of the redemption period, the sheriff
shall make a reasonable effort to request the affidavit of allowable costs in writing from the
holder of the sheriff's certificate, its agent, or attorney before issuing a certificate of
redemption. If the affidavit of allowable costs is not provided more than one business day
before the expiration of the redemption period, at any time one business day or less before
the expiration of the redemption period, the sheriff may calculate a redemption amount
pursuant to section 580.23, subdivision 1, and issue a certificate of redemption for that
amount. The amount calculated by the sheriff, absent malfeasance by the sheriff, binds the
holder of the sheriff's certificate even if the amount calculated by the sheriff is less than the
actual amount due.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for affidavits filed with the sheriff after
January 1, 2026.
new text end
Sec. 10.
Minnesota Statutes 2024, section 582.043, subdivision 6, is amended to read:
Subd. 6.
Dual tracking.
(a) If the servicer has received a loss mitigation application and
the subject mortgage loan has not already been referred to an attorney for foreclosure, a
servicer shall not refer the subject mortgage loan to an attorney for foreclosure while the
mortgagor's application is pending, unless:
(1) the servicer determines that the mortgagor is not eligible for any loss mitigation
option, the servicer informs the mortgagor of the determination in writing, and the applicable
appeal period has expired without an appeal or the appeal has been properly denied;
(2) where a written offer is made and a written acceptance is required, the mortgagor
fails to accept the loss mitigation offer within the time frame specified in the offer or within
14 days after the date of the offer, whichever is longer; or
(3) the mortgagor declines the loss mitigation offer in writing.
(b) If the servicer receives a loss mitigation application after the subject mortgage loan
has been referred to an attorney for foreclosure, but before a foreclosure sale has been
scheduled, a servicer shall not move for an order of foreclosure, seek a foreclosure judgment,
or conduct a foreclosure sale unless:
(1) the servicer determines that the mortgagor is not eligible for a loss mitigation option,
the servicer informs the mortgagor of this determination in writing, and the applicable appeal
period has expired without an appeal or the appeal has been properly denied;
(2) where a written offer is made and a written acceptance is required, the mortgagor
fails to accept the loss mitigation offer within the time frame specified in the offer or within
14 days after the date of the offer, whichever is longer; or
(3) the mortgagor declines a loss mitigation offer in writing.
(c) If the servicer receives a loss mitigation application after the foreclosure sale has
been scheduled, but before midnight of the seventh business day prior to the foreclosure
sale date, the servicer must halt the foreclosure sale and evaluate the application. If required
to halt the foreclosure sale and evaluate the application, the servicer new text begin may cancel the
foreclosure sale or postpone the foreclosure sale under section 580.07, subdivision 1, but
new text end must not move for an order of foreclosure, seek a foreclosure judgment, or conduct a
foreclosure sale unlessnew text begin 60 days have passed since the occurrence of one of the following,
whichever is applicablenew text end :
(1) the servicer determines that the mortgagor is not eligible for a loss mitigation option,
the servicer informs the mortgagor of this determination in writing, and the applicable appeal
period has expired without an appeal or the appeal has been properly denied;
(2) where a written offer is made and a written acceptance is required, the mortgagor
fails to accept the loss mitigation offer within the time frame specified in the offer or within
14 days after the date of the offer, whichever is longer; or
(3) the mortgagor declines a loss mitigation offer in writing.
(d) A servicer shall not move for an order of foreclosure or conduct a foreclosure sale
under any of the following circumstances:
(1) the mortgagor is in compliance with the terms of a trial or permanent loan
modification, or other loss mitigation option; or
(2) a short sale has been approved by all necessary parties and proof of funds or financing
has been provided to the servicer.