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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  
    Laws of Minnesota 1993 

                          CHAPTER 6-S.F.No. 48 
           An act relating to real property; providing for 
          recordation of mortgage satisfaction or release 
          following change in identity of corporate mortgagee or 
          assignee; allowing enforcement of assignment of rents 
          and profits of certain mortgaged real property, 
          against only nonhomestead portion of that property; 
          providing procedures for interested person to file for 
          record a request for notice of mortgage foreclosure; 
          allowing postponement of foreclosure sale by party 
          conducting the foreclosure; providing that certain 
          forfeitures of real property are subject to interests 
          of good faith purchasers; amending Minnesota Statutes 
          1992, sections 507.411; 559.17, subdivision 2; 
          580.032, subdivision 1; 580.07; and 609.5311, 
          subdivision 3. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1992, section 507.411, is 
amended to read: 
    507.411 [SATISFACTION AND RELEASE OF MORTGAGES; CORPORATE 
NAME OR IDENTITY CHANGE.] 
    When a change in the name or identity of a corporate 
mortgagee or assignee of the mortgagee is caused by or results 
from a merger, consolidation, amendment to charter or articles 
of incorporation, or conversion of articles of incorporation or 
charter from federal to state, from state to federal, or from 
one form of entity to another, a mortgage satisfaction or 
release that is otherwise recordable and that specifies, in both 
the body and acknowledgment, of the instrument the merger, 
consolidation, amendment, or conversion event causing the change 
in name or identity is in recordable form.  The satisfaction or 
release is entitled to be recorded in the office of the county 
recorder or filed with the registrar of titles, without further 
evidence of corporate merger, consolidation, amendment, or 
conversion.  For purposes of satisfying or releasing the 
mortgage, the satisfaction or release is prima facie evidence of 
the facts stated in it with respect to the corporate merger, 
consolidation, amendment, or conversion, and the county recorder 
and the registrar of titles shall rely upon it to satisfy or 
release the mortgage. 
     Sec. 2.  Minnesota Statutes 1992, section 559.17, 
subdivision 2, is amended to read: 
    Subd. 2.  A mortgagor may assign, as additional security 
for the debt secured by the mortgage, the rents and profits from 
the mortgaged real property, if the mortgage: 
    (1) was executed, modified or amended subsequent to August 
1, 1977; 
    (2) secured an original principal amount of $100,000 or 
more or is a lien upon residential real estate containing more 
than four dwelling units; and 
    (3) is not a lien upon property which was: 
    (i) entirely homesteaded, as agricultural property; or 
    (ii) residential real estate containing four or less fewer 
dwelling units where at least one of the units is homesteaded, 
or agricultural property.  The assignment may be enforced, but 
only against the nonhomestead portion of the mortgaged property, 
as follows: 
    (a) if, by the terms of an assignment, a receiver is to be 
appointed upon the occurrence of some specified event, and a 
showing is made that the event has occurred, the court shall, 
without regard to waste, adequacy of the security, or solvency 
of the mortgagor, appoint a receiver who shall, with respect to 
the excess cash remaining after application as provided in 
section 576.01, subdivision 2, apply it as prescribed by the 
assignment.  If the assignment so provides, the receiver shall 
apply the excess cash in the manner set out herein from the date 
of appointment through the entire redemption period from any 
foreclosure sale.  Subject to the terms of the assignment, the 
receiver shall have the powers and duties as set forth in 
section 576.01, subdivision 2; or 
     (b) if no provision is made for the appointment of a 
receiver in the assignment or if by the terms of the assignment 
a receiver may be appointed, the assignment shall be binding 
upon the assignor unless or until a receiver is appointed 
without regard to waste, adequacy of the security or solvency of 
the mortgagor, but only in the event of default in the terms and 
conditions of the mortgage, and only in the event the assignment 
requires the holder thereof to first apply the rents and profits 
received as provided in section 576.01, subdivision 2, in which 
case the same shall operate against and be binding upon the 
occupiers of the premises from the date of filing by the holder 
of the assignment in the office of the county recorder or the 
office of the registrar of titles for the county in which the 
property is located of a notice of default in the terms and 
conditions of the mortgage and service of a copy of the notice 
upon the occupiers of the premises.  The holder of the 
assignment shall apply the rents and profits received in 
accordance with the terms of the assignment, and, if the 
assignment so provides, for the entire redemption period from 
any foreclosure sale.  A holder of an assignment who enforces it 
in accordance with this clause shall not be deemed to be a 
mortgagee in possession with attendant liability. 
    Nothing contained herein shall prohibit the right to 
reinstate the mortgage debt granted pursuant to section 580.30, 
nor the right to redeem granted pursuant to sections 580.23 and 
581.10, and any excess cash, as that term is used herein, 
collected by the receiver under clause (a), or any rents and 
profits taken by the holder of the assignment under clause (b), 
shall be credited to the amount required to be paid to effect a 
reinstatement or redemption. 
    Sec. 3.  Minnesota Statutes 1992, section 580.032, 
subdivision 1, is amended to read: 
    Subdivision 1.  [FILING REQUEST FOR NOTICE.] A person 
having a redeemable interest in real property under section 
580.23 or 580.24, may file for record a request for notice of a 
mortgage foreclosure by advertisement with the county recorder 
or registrar of titles of the county where the property is 
located.  To be effective for purposes of this section, a 
request for notice must be filed for record as a separate and 
distinct document, or may be incorporated in a mechanic's lien 
statement filed for record pursuant to section 514.08, if the 
mechanic's lien statement includes a request for notice and 
includes the name and mailing address of the person requesting 
notice. 
    Sec. 4.  Minnesota Statutes 1992, section 580.07, is 
amended to read: 
    580.07 [POSTPONEMENT.] 
    Such The sale may be postponed, from time to time, by the 
party conducting the foreclosure, by inserting a notice of such 
the postponement, as soon as practicable, in the newspaper in 
which the original advertisement was published, and 
continuing such the publication until the time to which the sale 
is postponed, at the expense of the party requesting the same 
postponement.  
    Sec. 5.  Minnesota Statutes 1992, section 609.5311, 
subdivision 3, is amended to read: 
    Subd. 3.  [LIMITATIONS ON FORFEITURE OF CERTAIN PROPERTY 
ASSOCIATED WITH CONTROLLED SUBSTANCES.] (a) A conveyance device 
is subject to forfeiture under this section only if the retail 
value of the controlled substance is $25 or more and the 
conveyance device is associated with a felony-level controlled 
substance crime. 
     (b) Real property is subject to forfeiture under this 
section only if the retail value of the controlled substance or 
contraband is $1,000 or more. 
     (c) Property used by any person as a common carrier in the 
transaction of business as a common carrier is subject to 
forfeiture under this section only if the owner of the property 
is a consenting party to, or is privy to, the use or intended 
use of the property as described in subdivision 2. 
     (d) Property is subject to forfeiture under this section 
only if its owner was privy to the use or intended use described 
in subdivision 2, or the unlawful use or intended use of the 
property otherwise occurred with the owner's knowledge or 
consent. 
    (e) Forfeiture under this section of a conveyance device or 
real property encumbered by a bona fide security interest is 
subject to the interest of the secured party unless the secured 
party had knowledge of or consented to the act or omission upon 
which the forfeiture is based.  A person claiming a security 
interest bears the burden of establishing that interest by clear 
and convincing evidence.  
    (f) Forfeiture under this section of real property is 
subject to the interests of a good faith purchaser for value 
unless the purchaser had knowledge of or consented to the act or 
omission upon which the forfeiture is based. 
    (g) Notwithstanding paragraphs (d) and, (e), and (f), 
property is not subject to forfeiture based solely on the 
owner's or secured party's knowledge of the unlawful use or 
intended use of the property:  (1) if the owner or secured party 
took reasonable steps to terminate use of the property by the 
offender; or (2) the property is real property owned by the 
parent of the offender, unless the parent actively participated 
in, or knowingly acquiesced to, a violation of chapter 152, or 
the real property constitutes proceeds derived from or traceable 
to a use described in subdivision 2. 
    Sec. 6.  [EFFECTIVE DATE; APPLICATION.] 
    Section 1 is effective retroactively to March 7, 1991.  
Section 2 is effective the day following final enactment.  A 
request for notice under Minnesota Statutes, section 580.032, 
subdivision 1, filed on or after August 1, 1992, and prior to 
August 1, 1993, that is not a separate and distinct document, or 
incorporated in a mechanic's lien statement filed for record 
pursuant to Minnesota Statutes, section 514.08, ceases to be a 
request for notice on June 30, 1994, unless a supplemental 
request for notice that complies with Minnesota Statutes, 
section 580.032, subdivision 1, and states the recording 
information, including document number or book and page of the 
original request for notice, is filed before July 1, 1994. 
    Presented to the governor March 11, 1993 
    Signed by the governor March 12, 1993, 2:55 p.m.