Minnesota Session Laws - 1985, Regular Session

  

                         Laws of Minnesota 1985 

                        CHAPTER 251-S.F.No. 882 
           An act relating to commerce; clarifying submission of 
          applications for directors and officers liability 
          insurance; providing for the withdrawal of certain 
          registration statements; broadening the securities 
          transaction exemptions for isolated sales and limited 
          offerings; simplifying an exemption from franchise 
          registration; providing for disclosure of 
          representation by real estate brokers and 
          salespersons; expanding those officers who may verify 
          corporate broker licenses; altering re-examination 
          requirements for brokers and salespersons who fail to 
          renew their licenses; altering the unclaimed property 
          reporting deadline for life insurance companies; 
          raising the aggregation amount for holders reporting 
          unclaimed property; specifying dates for notifying and 
          advertising owners of abandoned property; and 
          providing for the notification of all lienholders by a 
          unit owners association in an assessment lien 
          foreclosure; amending Minnesota Statutes 1984, 
          sections 60A.08, by adding a subdivision; 80A.10, by 
          adding a subdivision; 80A.13, subdivision 1;  80A.15, 
          subdivision 2; 80C.03; 82.19, subdivision 3, and by 
          adding a subdivision; 82.20, subdivision 4; 82.21, 
          subdivision 1; 82.22, subdivision 10; 82.24, 
          subdivision 4; 345.41; 345.42, subdivisions 1 and 3; 
          and 515A.3-115; proposing coding for new law in 
          Minnesota Statutes, chapter 82. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1984, section 60A.08, is 
amended by adding a subdivision to read: 
    Subd. 11.  [DIRECTORS' AND OFFICERS' LIABILITY 
POLICIES.] No misrepresentation or omission made in an 
application or negotiation for any policy providing directors 
and officers liability coverage for directors or officers of a 
corporation shall defeat or avoid coverage or prevent the policy 
from attaching for a director or officer unless the director or 
officer has signed the application and has actual knowledge of 
the facts misrepresented or omitted.  The application shall be 
attached to and incorporated into the contract.  This 
subdivision applies with respect to all policies governed by 
this chapter or issued or renewed in this state. 
    Sec. 2.  Minnesota Statutes 1984, section 80A.10, is 
amended by adding a subdivision to read: 
    Subd. 4.  [WITHDRAWAL.] A registration statement that has 
been on file with the commissioner for a period of nine months 
and has not become effective is considered to have been 
withdrawn.  If the registration statement has been amended, the 
nine-month period must be computed from the date of the latest 
amendment.  Notwithstanding the provisions of section 80A.28, 
subdivision 1, paragraph (c), no part of the filing fee shall be 
returned if a registration statement is withdrawn pursuant to 
this subdivision. 
    Sec. 3.  Minnesota Statutes 1984, section 80A.13, 
subdivision 1, is amended to read: 
    Subdivision 1.  The commissioner may issue a stop order 
denying effectiveness to, or suspending or revoking the 
effectiveness of, any registration statement if he finds (a) 
that the order is in the public interest and (b) that 
    (1) the registration statement as of its effective date or 
as of any earlier date in the case of an order denying 
effectiveness, or any amendment under section 80A.12, 
subdivision 9, as of its effective date, or any report under 
section 80A.12, subdivision 8, is incomplete in any material 
respect or contains any statement which was, in the light of the 
circumstances under which it was made, false or misleading with 
respect to any material fact; 
    (2) any provision of sections 80A.01 to 80A.31 or any rule, 
order, or condition lawfully imposed under sections 80A.01 to 
80A.31 has been willfully violated in connection with the 
offering, by (i) the person filing the registration statement, 
(ii) the issuer, any partner, officer, or director of the 
issuer, any person occupying a similar status or performing 
similar functions, or any person directly or indirectly 
controlling or controlled by the issuer, but only if the person 
filing the registration statement is directly or indirectly 
controlled by or acting for the issuer, or (iii) any underwriter;
    (3) the security registered or sought to be registered is 
the subject of an administrative stop order or similar order or 
a permanent or temporary injunction of any court of competent 
jurisdiction entered under any other federal or state act 
applicable to the offering; but (i) the commissioner may not 
institute a proceeding against an effective registration 
statement under this clause more than one year from the date of 
the order or injunction relied on, and (ii) may not enter an 
order under this clause on the basis of an order or injunction 
entered under any other state act unless that order or 
injunction was based on facts which would currently constitute a 
ground for a stop order under this section; 
    (4) the issuer's enterprise or method of business includes 
or would include activities which are illegal where performed; 
    (5) the offering has worked or tended to work a fraud upon 
purchasers or would so operate; 
    (6) except with respect to securities which are being 
registered by notification, the terms of the securities are 
unfair and inequitable; provided, however, that the commissioner 
may not determine that an offering is unfair and inequitable 
solely on the grounds that the securities are to be sold at an 
excessive price where the offering price has been determined by 
arms length negotiation between nonaffiliated parties.  The 
selling price of any security being sold by a broker-dealer 
licensed in this state shall be presumed to have been determined 
by arms length negotiation; 
    (7) when a security is sought to be registered by 
coordination there has been a failure to comply with the 
undertaking required by section 80A.10, subdivision 2, clause 
(d); or 
    (8) the applicant or registrant has failed to pay the 
proper filing fee; but the commissioner may enter only a denial 
order under this clause and he shall vacate any such order when 
the deficiency has been corrected.; or 
    (9) the offering of securities sought to be registered is 
not firmly underwritten and the maximum amount of proceeds from 
the sale of the securities is (i) not more than $500,000, and 
(ii) more than 200 percent of the minimum amount of proceeds 
required to go forward with the offering. 
    The commissioner may not institute a stop order proceeding 
against an effective registration statement solely on the basis 
of a fact or transaction known to him when the registration 
statement became effective unless the proceeding is instituted 
within the next 30 days.  
    Sec. 4.  Minnesota Statutes 1984, section 80A.15, 
subdivision 2, is amended to read: 
    Subd. 2.  The following transactions are exempted from 
sections 80A.08 and 80A.16: 
    (a) Any isolated sales, whether or not effected through a 
broker-dealer, provided that no person shall make more than five 
ten sales of securities of the same issuer pursuant to this 
exemption during any period of 12 consecutive months; provided 
further, that in the case of sales by an issuer, except sales of 
securities registered under the Securities Act of 1933 or 
exempted by section 3(b) of that act, (1) the seller reasonably 
believes that all buyers are purchasing for investment, and (2) 
the securities are not advertised for sale to the general public 
in newspapers or other publications of general circulation or 
otherwise, or by radio, television, or direct mailing electronic 
means or similar communications media, or through a program of 
general solicitation by means of mail or telephone. 
    (b) Any nonissuer distribution of an outstanding security 
if (1) either Moody's, Fitch's, or Standard & Poor's Securities 
Manuals, or other recognized manuals approved by the 
commissioner contains the names of the issuer's officers and 
directors, a balance sheet of the issuer as of a date not more 
than 18 months prior to the date of the sale, and a profit and 
loss statement for the fiscal year preceding the date of the 
balance sheet, and (2) the issuer or its predecessor has been in 
active, continuous business operation for the five-year period 
next preceding the date of sale, and (3) if the security has a 
fixed maturity or fixed interest or dividend provision, the 
issuer has not, within the three preceding fiscal years, 
defaulted in payment of principal, interest, or dividends on the 
securities. 
     (c) The execution of any orders by a licensed broker-dealer 
for the purchase or sale of any security, pursuant to an 
unsolicited offer to purchase or sell; provided that the 
broker-dealer acts as agent for the purchaser or seller, and has 
no direct material interest in the sale or distribution of the 
security, receives no commission, profit, or other compensation 
from any source other than the purchaser and seller and delivers 
to the purchaser and seller written confirmation of the 
transaction which clearly itemizes his commission, or other 
compensation. 
     (d) Any nonissuer sale of notes or bonds secured by a 
mortgage lien if the entire mortgage, together with all notes or 
bonds secured thereby, is sold to a single purchaser at a single 
sale. 
    (e) Any judicial sale, exchange, or issuance of securities 
made pursuant to an order of a court of competent jurisdiction. 
    (f) The sale, by a pledge holder, of a security pledged 
with him in good faith as collateral for a bona fide debt. 
    (g) Any offer or sale to a bank, savings institution, trust 
company, insurance company, investment company as defined in the 
Investment Company Act of 1940, pension or profit sharing trust, 
or other financial institution or institutional buyer, or to a 
broker-dealer, whether the purchaser is acting for itself or in 
some fiduciary capacity. 
    (h) Any sales by an issuer to the number of persons as, 
when aggregated with the number of persons to whom sales have 
been made pursuant to clause (a) or (k), that shall not exceed 
25 persons in this state, or 35 persons if the sales are made in 
compliance with Regulation D promulgated by the Securities and 
Exchange Commission, Code of Federal Regulations, title 17, 
sections 230.501 to 230.506, (other than those designated in 
clause paragraph (a) or (g)) during any period of 12 consecutive 
months, whether or not any of the purchasers is then present in 
this state, if (1) the issuer reasonably believes that all of 
the buyers in this state (other than those designated in clause 
(g)) are purchasing for investment, and (2) no commission or 
other remuneration is paid or given directly or indirectly for 
soliciting any prospective buyer in this state (other than those 
designated in clause (g)), except reasonable and customary 
commissions paid by the issuer to a broker-dealer licensed under 
this chapter, and (3) the issuer has, ten days prior to any sale 
pursuant to this paragraph, supplied the commissioner with a 
statement of issuer on forms prescribed by the commissioner, 
containing the following information:  (i) the name and address 
of the issuer, and the date and state of its organization; (ii) 
the number of units, price per unit, and a description of the 
securities to be sold; (iii) the amount of commissions to be 
paid and the persons to whom they will be paid; (iv) the names 
of all officers, directors and persons owning five percent or 
more of the equity of the issuer; (v) a brief description of the 
intended use of proceeds; (vi) a description of all sales of 
securities made by the issuer within the 12-month six-month 
period next preceding the date of filing; and (vii) a copy of 
the investment letter, if any, intended to be used in connection 
with any sale.  Sales that are made more than six months before 
the start of an offering made pursuant to this exemption or are 
made more than six months after completion of an offering made 
pursuant to this exemption will not be considered part of the 
offering, so long as during those six-month periods there are no 
sales of unregistered securities (other than those made pursuant 
to paragraph (a) or (g)) by or for the issuer that are of the 
same or similar class as those sold under this exemption.  The 
commissioner may by rule or order as to any security or 
transaction or any type of security or transaction, withdraw or 
further condition this exemption, or increase the number of 
offers and sales permitted, or waive the conditions in clause 
(1), (2), or (3) with or without the substitution of a 
limitation or remuneration. 
    (i) Any offer (but not a sale) of a security for which a 
registration statement has been filed under sections 80A.01 to 
80A.31, if no stop order or refusal order is in effect and no 
public proceeding or examination looking toward an order is 
pending; and any offer of a security if the sale of the security 
is or would be exempt under this section.  The commissioner may 
by rule exempt offers (but not sales) of securities for which a 
registration statement has been filed as he deems appropriate, 
consistent with the purposes of sections 80A.01 to 80A.31. 
    (j) The offer and sale by a cooperative association 
organized under chapter 308, of its securities when the 
securities are offered and sold only to its members, or when the 
purchase of the securities is necessary or incidental to 
establishing membership in such association, or when such 
securities are issued as patronage dividends. 
    (k) Any offer or sale of securities, including offers and 
sales pursuant to preorganization subscriptions for the 
securities of an issuer to be formed, by a corporation having 
its principal office in this state if, after giving effect 
thereto, the aggregate number of holders of all of the issuer's 
securities, all of whom shall have purchased for investment, 
does not exceed ten, exclusive of persons designated in clause 
(g), provided that no commission or other remuneration has been 
paid and no advertising has been published or circulated in 
connection with the sale, and all sales are consummated within 
30 days after commencement of business by the issuer.  The 
commissioner may by rule or order increase the number of persons 
to whom sales may be made under this exemption. 
    (l) The issuance and delivery of any securities of one 
corporation to another corporation or its security holders in 
connection with a merger, exchange of shares, or transfer of 
assets whereby the approval of stockholders of the other 
corporation is required to be obtained, provided, that the 
commissioner has been furnished with a general description of 
the transaction and with other information as he by rule 
prescribes not less than ten days prior to the issuance and 
delivery. 
    (m) Any transaction between the issuer or other person on 
whose behalf the offering is made and an underwriter or among 
underwriters. 
    (n) The distribution by a corporation of its or other 
securities to its own security holders as a stock dividend or as 
a dividend from earnings or surplus or as a liquidating 
distribution; or upon conversion of an outstanding convertible 
security; or pursuant to a stock split or reverse stock split. 
    (o) Any offer or sale of securities by an affiliate of the 
issuer thereof if:  (1) a registration statement is in effect 
with respect to securities of the same class of the issuer and 
(2) the offer or sale has been exempted from registration by 
rule or order of the commissioner.  
    Sec. 5.  Minnesota Statutes 1984, section 80C.03, is 
amended to read: 
    80C.03 [EXEMPTIONS.] 
    The registration requirement imposed by section 80C.02 
shall not apply to the following provided that the method of 
offer or sale is not used for the purpose of evading sections 
80C.01 to 80C.22: 
    (a) The offer or sale by a franchisee of a franchise owned 
by him, or the offer or sale by a subfranchisor of the entire 
area franchise owned by him if the sale is not effected by or 
through a franchisor; provided, however, that no person shall 
make more than one sale during any period of 12 consecutive 
months of a franchise or area franchise granted by a single 
franchisor.  A sale is not effected by or through a franchisor 
merely because a franchisor has a right to approve or disapprove 
a different franchisee; 
    (b) Any transaction by an executor, administrator, sheriff, 
receiver, trustee in bankruptcy, guardian or conservator; 
    (c) Any offer or sale to a banking organization, financial 
organization or life insurance corporation within the meanings 
given these terms by section 345.31; 
    (d) Securities currently registered in this state pursuant 
to chapter 80A;  
    (e) The offer or sale of a franchise, not including an area 
franchise, provided that:  
    (1) Neither the franchisor nor any predecessor or affiliate 
of the franchisor has more than two franchises in Minnesota at 
the time of any such offer or will have more than three 
franchises in Minnesota immediately following any such sale the 
franchisor shall make no more than one sale of a franchise 
pursuant to this exemption during any period of 12 consecutive 
months;  
    (2) the franchisor has not directed or caused to be 
directed any advertisement for the franchise to anyone within 
Minnesota who has not requested it; and advertised the franchise 
for sale to the general public in newspapers or other 
publications of general circulation or otherwise by radio, 
television, electronic means or similar communications media, or 
through a program of general solicitation by means of mail or 
telephone; 
    (3) the franchisor deposits all franchisee fees within two 
days of receipt in an escrow account until all obligations of 
the franchisor to the franchisee which are, pursuant to the 
terms of the franchise agreement, to be performed prior to the 
opening of the franchise, have been performed.  The franchisor 
shall provide the franchisee with a purchase receipt for the 
franchise fees paid, a copy of the escrow agreement and the 
name, address and telephone number of the escrow agent.  The 
escrow agent shall be a bank located in Minnesota.  All such 
franchise fees shall be deposited in the escrow account within 
two business days after receipt.  Upon a showing of good cause 
the commissioner may waive the escrow of franchise fees; and 
    (4) the franchisor has filed with provided to the 
commissioner, no later than 10 business days prior to the date 
of the first sale, a written notice of its intention to offer or 
sell franchises a franchise pursuant to the exemptions set forth 
in this paragraph, which notice shall be accompanied by a fee of 
$50, together with a copy of the disclosure document and 
standard franchise agreement of the franchisor, which documents 
are required to be supplied by the franchisor to the franchisee 
pursuant to rules of the Federal Trade Commission this exemption.
    (f) The offer or sale of a fractional franchise;  
    (g) Any transaction which the commissioner by rule or order 
exempts as not being within the purposes of this chapter and the 
registration of which he or she finds is not necessary or 
appropriate in the public interest or for the protection of 
investors; and 
    (h) The offer or sale of a franchise to a resident of a 
foreign state, territory, or country who is neither domiciled in 
this state nor actually present in this state, if the franchise 
business is not to be operated wholly or partly in this state, 
and if the sale of this franchise is not in violation of any law 
of the foreign state, territory, or county concerned.  
    Sec. 6.  Minnesota Statutes 1984, section 82.19, 
subdivision 3, is amended to read:  
    Subd. 3.  No real estate broker or salesperson shall offer, 
pay or give, and no person shall accept, any compensation or 
other thing of value from any real estate broker or salesperson 
by way of commission-splitting, rebate, finder's fees or 
otherwise, in connection with any real estate or business 
opportunity transaction; provided this subdivision does not 
apply to transactions (1) between a licensed real estate broker 
or salesperson and the person by whom he is engaged to purchase 
or sell real estate or business opportunity, (2) among persons 
licensed as provided herein, and (3) between a licensed real 
estate broker or salesperson and persons from other 
jurisdictions similarly licensed in that jurisdiction.  A 
licensed real estate broker or salesperson may assign or direct 
that commissions or other compensation earned in connection with 
any real estate or business opportunity transaction be paid to a 
corporation of which the licensed real estate broker or 
salesperson is the sole owner.  
    Sec. 7.  Minnesota Statutes 1984, section 82.19, is amended 
by adding a subdivision to read: 
    Subd. 5.  [DISCLOSURE REGARDING REPRESENTATION OF 
PARTIES.] (a) No person licensed pursuant to this chapter or who 
otherwise acts as a real estate broker or salesperson shall 
represent any party or parties to a real estate transaction or 
otherwise act as a real estate broker or salesperson unless he 
or she makes an affirmative written disclosure to all parties to 
the transaction as to which party he or she represents in the 
transaction.  The disclosure shall be printed in at least 
six-point bold type on the purchase agreement and acknowledged 
by separate signatures of the buyer and seller. 
    (b) The disclosure required by this subdivision must be 
made by the licensee prior to any offer being made to or 
accepted by the buyer.  A change in licensee's representation 
that makes the initial disclosure incomplete, misleading, or 
inaccurate requires that a new disclosure be made at once. 
    (c) The seller may, in the listing agreement, authorize the 
seller's broker to disburse part of the broker's compensation to 
other brokers, including the buyer's brokers solely representing 
the buyer.  A broker representing a buyer shall make known to 
the seller or the seller's agent the fact of the agency 
relationship before any showing or negotiations are initiated.  
    Sec. 8.  Minnesota Statutes 1984, section 82.20, 
subdivision 4, is amended to read: 
    Subd. 4.  [CORPORATE AND PARTNERSHIP LICENSES.] (a) A 
corporation applying for a license shall have at least one 
officer individually licensed to act as broker for the 
corporation.  The corporation broker's license shall extend no 
authority to act as broker to any person other than the 
corporate entity.  Each officer who intends to act as a broker 
shall obtain a license; 
    (b) A partnership applying for a license shall have at 
least one partner individually licensed to act as broker for the 
partnership.  Each partner who intends to act as a broker shall 
obtain a license; 
    (c) Applications for a license made by a corporation shall 
be verified by the president and secretary one other officer.  
Applications made by a partnership shall be verified by at least 
two partners; 
    (d) Any partner or officer who ceases to act as broker for 
a partnership or corporation shall notify the commissioner upon 
said termination.  The individual licenses of all salespersons 
acting on behalf of a corporation or partnership, are 
automatically ineffective upon the revocation or suspension of 
the license of the partnership or corporation.  The commissioner 
may suspend or revoke the license of an officer or partner 
without suspending or revoking the license of the corporation or 
partnership; 
    (e) The application of all officers of a corporation or 
partners in a partnership who intend to act as a broker on 
behalf of a corporation or partnership shall accompany the 
initial license application of the corporation or partnership.  
Officers or partners intending to act as brokers subsequent to 
the licensing of the corporation or partnership shall procure an 
individual real estate broker's license prior to acting in the 
capacity of a broker.  No license as a real estate salesperson 
shall be issued to any officer of a corporation or member of a 
partnership to which a license was issued as a broker; 
    (f) The corporation or partnership applicant shall make 
available upon request, such records and data required by the 
commissioner for enforcement of this chapter. 
    Sec. 9.  Minnesota Statutes 1984, section 82.22, 
subdivision 10, is amended to read: 
    Subd. 10.  [RENEWAL; EXAMINATION.] Except as provided in 
subdivisions 3 and 7, no examination shall be required for the 
renewal of any license, provided, however, any licensee having 
been licensed as a broker or salesperson in the state of 
Minnesota and who shall fail to renew the license for a period 
of one year two years shall be required by the commissioner to 
again take an examination. 
    Sec. 10.  Minnesota Statutes 1984, section 82.24, 
subdivision 4, is amended to read:  
    Subd. 4.  [COMMINGLING FUNDS.] A broker or salesperson 
shall deposit only trust funds in a trust account and shall not 
commingle personal funds or other funds in a trust account, 
except that a broker or salesperson may deposit and maintain a 
sum not to exceed $100 $500 in a trust account from his personal 
funds, which sum shall be specifically identified and used to 
pay service charges relating to the trust account.  
    Sec. 11.  Minnesota Statutes 1984, section 345.41, is 
amended to read: 
    345.41 [REPORT OF ABANDONED PROPERTY.] 
    (a) Every person holding funds or other property, tangible 
or intangible, presumed abandoned under sections 345.31 to 
345.60 shall report annually to the commissioner with respect to 
the property as hereinafter provided. 
    (b) The report shall be verified and shall include: 
    (1) except with respect to traveler's checks and money 
orders, the name, if known, and last known address, if any, of 
each person appearing from the records of the holder to be the 
owner of any property of the value of $10 $25 or more presumed 
abandoned under sections 345.31 to 345.60; 
    (2) in case of unclaimed funds of life insurance 
corporations, the full name of the policyholder, insured or 
annuitant and his last known address according to the life 
insurance corporation's records; 
    (3) the nature and identifying number, if any, or 
description of the property and the amount appearing from the 
records to be due, except that items of value under $10 $25 each 
may be reported in aggregate; 
    (4) the date when the property became payable, demandable 
or returnable, and the date of the last transaction with the 
owner with respect to the property; and 
    (5) other information which the commissioner prescribes by 
rule as necessary for the administration of sections 345.31 to 
345.60. 
    (c) If the person holding property presumed abandoned is a 
successor to other persons who previously held the property for 
the owner, or if the holder has changed his name while holding 
the property, he shall file with his report all prior known 
names and addresses of each holder of the property. 
    (d) The report shall be filed before November 1 of each 
year as of June 30 next preceding, but the report of life 
insurance corporations shall be filed before May October 1 of 
each year as of December 31 next preceding.  The commissioner 
may postpone the reporting date upon written request by any 
person required to file a report. 
    (e) If the holder of property presumed abandoned under 
sections 345.31 to 345.60 knows the whereabouts of the owner and 
if the owner's claim has not been barred by the statute of 
limitations, the holder shall, before filing the annual report, 
inform the owner of the steps necessary to prevent abandonment 
from being presumed. 
    (f) Verification, if made by a partnership, shall be 
executed by a partner; if made by an unincorporated association 
or private corporation, by an officer, and if made by a public 
corporation, by its chief fiscal officer. 
     (g) Holders of property described in section 345.32 shall 
not impose any charges against property which is described in 
section 345.32, clauses (a), (b) or (c). 
     (h) Any person who has possession of property which he has 
reason to believe will be reportable in the future as unclaimed 
property may, with the permission of the commissioner, report 
and deliver such property prior to the date required for 
reporting in accordance with this section. 
    Sec. 12.  Minnesota Statutes 1984, section 345.42, 
subdivision 1, is amended to read: 
    Subdivision 1.  Within 120 days from the filing of the 
report required by section 345.41 On or before April 1 of each 
year, the commissioner shall cause notice to be published at 
least once but not more than twice in an English language 
newspaper of general circulation in the county in this state in 
which is located the last known address of any person to be 
named in the notice.  If no address is listed or if the address 
is outside this state, the notice shall be published in the 
county in which the holder of the abandoned property has his 
principal place of business within this state. 
    Sec. 13.  Minnesota Statutes 1984, section 345.42, 
subdivision 3, is amended to read: 
    Subd. 3.  Within 120 days from the receipt of the report 
required by section 345.41 On or before April 1 of each year, 
the commissioner shall mail a notice to each person having an 
address listed therein who appears to be entitled to property of 
the value of $25 or more presumed abandoned under sections 
345.31 to 345.60.  Said notice shall contain: 
    (a) a statement that, according to a report filed with the 
commissioner, property is being held to which the addressee 
appears entitled; 
    (b) the name and address of the person holding the property 
and any necessary information regarding changes of name and 
address of the holder; and 
    (c) a statement that, if satisfactory proof of claim is not 
presented by the owner to the holder by the date specified in 
the published notice, the property will be placed in the custody 
of the commissioner to whom all further claims must be directed. 
    Sec. 14.  Minnesota Statutes 1984, section 515A.3-115, is 
amended to read: 
    515A.3-115 [LIEN FOR ASSESSMENTS.] 
    (a) The association has a lien on a unit for any assessment 
levied against that unit from the time the assessment becomes 
payable.  The association's lien may be foreclosed as provided 
by the laws of this state as if it were a lien under a mortgage 
containing a power of sale but the association shall give 
reasonable notice of its action to all lienholders of the unit 
whose interest would be affected.  The rights of the parties 
shall be the same as those provided by law except that the 
period of redemption for unit owners shall be six months from 
the date of sale.  Unless the declaration otherwise provides, 
fees, charges, late charges, and interest charges pursuant to 
section 515A.3-102(8), (9) and (12) are enforceable as 
assessments under this section.  
    (b) A lien under this section is prior to all other liens 
and encumbrances on a unit except (1) liens and encumbrances 
recorded before the recordation of the declaration, (2) any 
recorded mortgage on the unit securing a first mortgage holder, 
and (3) liens for real estate taxes and other governmental 
assessments or charges against the unit.  This subsection does 
not affect the priority of mechanics' or materialmen's liens. 
    (c) Recording of the declaration constitutes record notice 
and perfection of the lien, and no further recordation of any 
claim of lien for assessment under this section is required. 
    (d) Proceedings to enforce an assessment must be instituted 
within three years after the last installment of the assessment 
becomes payable.  
    (e) Unit owners at the time an assessment is payable are 
personally liable to the association for payment of the 
assessments.  
    (f) A foreclosure sale, judgment or decree in any action, 
proceeding or suit brought under this section shall include 
costs and reasonable attorney's fees for the prevailing party. 
    (g) The association shall furnish to a unit owner or his 
authorized agent upon written request of the unit owner or his 
authorized agent a recordable statement setting forth the amount 
of unpaid assessments currently levied against his unit.  The 
statement shall be furnished within ten business days after 
receipt of the request and is binding on the association and 
every unit owner. 
    Sec. 15.  [EFFECTIVE DATE.] 
    Sections 11 to 13 are effective January 1, 1986. 
    Approved May 29, 1985