Key: (1) language to be deleted (2) new language
An act
relating to real property; clarifying ownership definitions; requiring the record owner to be listed as grantee in tax-forfeited land sales;
amending Minnesota Statutes 2020, sections 282.301; 325N.01; 325N.02; 325N.03; 325N.04; 325N.06; 325N.10, subdivisions 2, 3, 4, 5, 7; proposing coding for new law in Minnesota Statutes, chapter 282.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
When any sale has been made under sections 282.012 and 282.241 to 282.324, the purchaser shall receive from the county auditor at the time of repurchase a receipt, in such form as may be prescribed by the attorney general. When the purchase price of a parcel of land shall be paid in full, the following facts shall be certified by the county auditor to the commissioner of revenue of the state of Minnesota: the description of landdeleted text begin , the date of sale, the name of the purchaser or the purchaser's assignee,deleted text end and the date when the final installment of the purchase price was paid. deleted text begin Upon payment in full of the purchase price, the purchaser or the assignee shall receive a quitclaim deed from the state, to be executed by the commissioner of revenue. The deed must be sent to the county auditor who shall have it recorded before it is forwarded to the purchaser. Failure to make any payment herein required shall constitute default and upon such default and cancellation in accord with section 282.40, the right, title and interest of the purchaser or the purchaser's heirs, representatives, or assigns in such parcel shall terminate.deleted text end
new text begin This section is effective July 1, 2021, and applies to repurchases approved on or after that date. new text end
new text begin Except as provided in subdivision 2, upon receipt of the certification by the county auditor required under section 282.301, the commissioner of revenue must issue a quitclaim deed in the name of the state, as grantor, to the record owner of the property at the time of the expiration of the redemption period established under section 281.23. new text end
new text begin Notwithstanding subdivision 1, the state deed must name the record owner's estate as grantee if a sale conducted under section 282.01 is made to a personal representative, heir, or devisee of the record owner, and the record owner is either deceased at the time of the expiration of redemption period established under section 281.23 or is deceased at the time the certification of payment under section 282.301 is made. If the record owner's estate has not been opened in a probate court of this state at the time of execution of the state deed, the state deed to the record owner's estate is deemed an effective conveyance to the estate upon opening of the estate. new text end
new text begin This section is effective July 1, 2021, and applies to repurchases approved on or after that date. new text end
new text begin If the record owner at the time of the expiration of redemption assigns an installment contract used to repurchase, and the assignment was registered or recorded, the state deed must name the assignee as the grantee. new text end
new text begin This section is effective July 1, 2021, and applies to repurchases approved on or after that date. new text end
new text begin (a) The quitclaim deed issued under section 282.302 must be electronically recorded or sent to the county auditor who must have it recorded before it is forwarded to the grantee. Recording of the deed by the county auditor is deemed delivery to the grantee. new text end
new text begin (b) Failure to make any payment required by this chapter will constitute default and upon such default, the sale will be subject to the cancellation provisions of section 282.40. new text end
new text begin This section is effective July 1, 2021, and applies to repurchases approved on or after that date. new text end
The definitions in paragraphs (a) to (h) apply to sections 325N.01 to 325N.09.
(a) deleted text begin "Foreclosure consultant"deleted text end new text begin "Solicitor"new text end means any person who, directly or indirectly, makes any solicitation, representation, or offer to any owner to perform for compensation or who, for compensation, performs any service which the person in any manner represents will in any manner do any of the following:
(1) stop or postpone deleted text begin thedeleted text end new text begin anew text end foreclosure salenew text begin , a tax forfeiture sale, or a contract for deed terminationnew text end ;
(2) obtain any forbearance from any beneficiarynew text begin , local unit of government, association of apartment owners, contract for deed seller,new text end or mortgageenew text begin regarding:new text end
new text begin (i) taxesnew text end ;
new text begin (ii) dues owed to an association of apartment owners; or new text end
new text begin (iii) contract for deed, mortgage, or any other payments; new text end
(3) assist the owner tonew text begin :new text end
new text begin (i)new text end exercise the right of reinstatement provided in section 580.30new text begin or the right of redemption provided in section 580.25new text end ;
new text begin (ii) exercise the right of redemption under chapter 281 or the right to repurchase under sections 282.241 to 282.324; new text end
new text begin (iii) cure a default that has resulted in a termination notice issued under section 559.21, subdivision 2a; or new text end
new text begin (iv) cure a default that resulted in a lien secured by a common interest community or a master association; new text end
(4) obtain any extension of the period within which the owner may reinstate the owner's obligation;
(5) obtain any waiver of an acceleration clause contained in any promissory note or contract secured by a mortgage on a residence in foreclosure or contained in the mortgage;
(6) assist the owner in foreclosurenew text begin , tax forfeiture,new text end or deleted text begin loandeleted text end default new text begin on a loan, contract for deed payments, or dues owed to an association of apartment owners, new text end to obtain a loan or advance of funds;
(7) avoid or ameliorate the impairment of the owner's credit resulting from the recording of a notice of defaultnew text begin on taxes or any debt secured by the covered residencenew text end or the conduct of a foreclosure new text begin or tax forfeiture new text end sale;
(8) save the owner's residence from foreclosurenew text begin , tax forfeiture, or contract for deed terminationnew text end ; or
(9) negotiate or modify the terms or conditions of an existing residential mortgage loannew text begin , a repayment agreement on taxes owed, a repurchase agreement of tax-forfeited real property, or a contract for deednew text end .
(b) A deleted text begin foreclosure consultantdeleted text end new text begin solicitornew text end does not include any of the following:
(1) a person licensed to practice law in this state when the person renders service in the course of the person's practice as an attorney-at-law;
(2) a person licensed as a debt management services provider under chapter 332A, when the person is acting as a debt management services provider as defined in that chapter;
(3) a person licensed as a real estate broker or salesperson under chapter 82 when the person engages in acts whose performance requires licensure under that chapter unless the person is engaged in offering services designed to, or purportedly designed to, enable the owner to retain possession of thenew text begin coverednew text end residence deleted text begin in foreclosuredeleted text end ;
(4) a person licensed as an accountant under chapter 326A when the person is acting in any capacity for which the person is licensed under those provisions;
(5) a person or the person's authorized agent acting under the express authority or written approval of the Department of Housing and Urban Development or other department or agency of the United States or this state to provide services;
(6) a person who holds or is owed an obligation secured by a lien on anynew text begin coverednew text end residence deleted text begin in foreclosuredeleted text end when the person performs services in connection with this obligation or lien if the obligation or lien did not arise as the result of or as part of a proposed deleted text begin foreclosuredeleted text end new text begin propertynew text end reconveyance;
(7) any person or entity doing business under any law of this state, or of the United States relating to banks, trust companies, savings and loan associations, industrial loan and thrift companies, regulated lenders, credit unions, insurance companies, or a mortgagee which is a United States Department of Housing and Urban Development approved mortgagee and any subsidiary or affiliate of these persons or entities, and any agent or employee of these persons or entities while engaged in the business of these persons or entities;
(8) a person licensed as a residential mortgage originator or servicer pursuant to chapter 58, when acting under the authority of that license, except that the provisions of sections 325N.01 to 325N.06, 325N.08, and 325N.09 shall apply to any person operating under a mortgage originator license who negotiates or offers to negotiate the terms or conditions of an existing residential mortgage loan;
(9) a nonprofit agency or organization that has tax-exempt status under section 501(c)(3) of the Internal Revenue Code that offers counseling or advice to an owner of a home in foreclosure or loan default if they do not contract for services with for-profit lenders or deleted text begin foreclosuredeleted text end new text begin equitynew text end purchasers, except that they shall comply with the provisions of section 325N.04, clause (1);
(10) a judgment creditor of the owner, to the extent that the judgment creditor's claim accrued prior to the personal service of the foreclosure notice required by section 580.03, but excluding a person who purchased the claim after such personal service; deleted text begin anddeleted text end
(11) deleted text begin a foreclosuredeleted text end new text begin an equitynew text end purchaser as defined in section 325N.10new text begin ; andnew text end
new text begin (12) any common interest community association or master association that holds or is owed an obligation secured by a lien on any residence in foreclosure and any employee or agent of either while performing services within the scope of the employment or agencynew text end .
(c) deleted text begin "Foreclosuredeleted text end new text begin "Propertynew text end reconveyance" means a transaction involving:
(1) the transfer of title to real property by deleted text begin a foreclosed homeowner during a foreclosure proceeding, either by transfer of interest from the foreclosed homeowner or by creation of a mortgage or other lien or encumbrance during the foreclosure processdeleted text end new text begin an owner, either by transfer of interest from the owner or by creation of a mortgage or other lien or encumbrancenew text end that allows the acquirer to obtain title to the property by redeeming the property as a junior lienholdernew text begin or by other legal process, prior to the expiration of:new text end
new text begin (i) the right of reinstatement provided in section 580.30 or the right of redemption of a property provided in section 580.25; new text end
new text begin (ii) the right of redemption under chapter 281 or the right to repurchase under sections 282.241 to 282.324; new text end
new text begin (iii) the period to cure a default that has resulted in a termination notice issued under section 559.21, subdivision 2a; or new text end
new text begin (iv) the period to cure a default that resulted in a lien assessed by a common interest community or a master associationnew text end ; and
(2) the subsequent conveyance, or promise of a subsequent conveyance, of an interest back to the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end by the acquirer or a person acting in participation with the acquirer that allows the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end to possess either the new text begin covered new text end residence deleted text begin in foreclosuredeleted text end or any other real property, which interest includes, but is not limited to, an interest in a contract for deed, purchase agreement, option to purchase, or lease.
(d) "Person" means any individual, partnership, corporation, limited liability company, association, or other group, however organized.
(e) "Service" means and includes, but is not limited to, any of the following:
(1) debt, budget, or financial counseling of any type;
(2) receiving money for the purpose of distributing it to creditorsnew text begin , vendors, or association of apartment ownersnew text end in payment or partial payment of any obligation secured by deleted text begin a lien ondeleted text end a new text begin covered new text end residence deleted text begin in foreclosuredeleted text end ;
(3) contacting creditorsnew text begin , vendors, association of apartment owners,new text end or servicers to negotiate or offer to negotiate the terms or conditions of an existing residential mortgage loannew text begin , a tax forfeiture redemption or repurchase agreement, or a contract for deednew text end ;
(4) arranging or attempting to arrange for an extension of the period within which the owner of anew text begin coverednew text end residence deleted text begin in foreclosuredeleted text end maynew text begin :new text end
new text begin (i)new text end cure the owner's default and reinstate the owner's obligation pursuant to section 580.30;
new text begin (ii) cure the owner's property tax default and redeem the property; new text end
new text begin (iii) cure the owner's default on dues owed to an association of apartment owners and release the common interest community or master association's lien; or new text end
new text begin (iv) cure the default on a contract for deed and void the purchaser's ability to terminate the contract; new text end
(5) arranging or attempting to arrange for any delay or postponement of the time of sale of thenew text begin coverednew text end residence deleted text begin in foreclosuredeleted text end ;
(6) advising the filing of any document or assisting in any manner in the preparation of any document for filing with any bankruptcy court; or
(7) giving any advice, explanation, or instruction to an owner of a new text begin covered new text end residence deleted text begin in foreclosuredeleted text end , which in any manner relates to the cure of a default in or the reinstatement of an obligation secured by a lien on the new text begin covered new text end residence deleted text begin in foreclosuredeleted text end , the full satisfaction of that obligation, or the postponement or avoidance of a sale of a new text begin covered new text end residence deleted text begin in foreclosuredeleted text end , pursuant to a power of sale contained in any mortgage.
(f) deleted text begin "Residence in foreclosure"deleted text end new text begin "Covered residence"new text end means residential real property deleted text begin consisting of one to four family dwelling units, one of which the owner occupies as the owner's principal place of residence, or real property that is principally used for farming, as defined in section 500.24, subdivision 2, whether or not parcels are contiguous, so long as the owner occupies one of the parcels as the owner's principal place of residence, where there is a delinquency or default on any loan payment or debt secured by or attached to the residential real property including, but not limited to, contract for deed paymentsdeleted text end new text begin where there is a delinquency or default on any loan, tax, or contract for deed payment, association of apartment owner or master association dues, or other debt secured by or attached to the residential real property that:new text end
new text begin (i) consists of one to four family dwelling units, one of which the owner occupies as the owner's principal place of residence; new text end
new text begin (ii) is an apartment, as that term is defined in section 515.02, subdivision 2; new text end
new text begin (iii) is the subject of a contract for deed; or new text end
new text begin (iv) is real property that is principally used for farming, as defined in section 500.24, subdivision 2, whether or not parcels are contiguous, so long as the owner occupies one of the parcels as the owner's principal place of residencenew text end .
(g) "Owner" means the record owner of deleted text begin the residential real property in foreclosuredeleted text end new text begin a covered residence. For the purposes of this chapter, if the residence in foreclosure is subject to a mortgage foreclosure, an owner is the record ownernew text end at the time the notice of pendency was recorded, or the summons and complaint served.
(h) "Contract" means any agreement, or any term in any agreement, between a deleted text begin foreclosure consultantdeleted text end new text begin solicitornew text end and an owner for the rendition of any service as defined in paragraph (e).
new text begin (i) "Association of apartment owners" has the meaning given in section 515.02, subdivision 5. new text end
new text begin (j) "Common interest community" has the meaning given in section 515B.1-103, clause (10). new text end
new text begin (k) "Master association" has the meaning given in section 515B.1-103, clause (21). new text end
new text begin This section is effective July 1, 2021. new text end
(a) In addition to any other right under law to rescind a contract, an owner has the right to cancel deleted text begin suchdeleted text end a new text begin solicitor new text end contract until midnight of the third business day after the day on which the owner signs a contract which complies with section 325N.03.
(b) Cancellation occurs when the owner gives written notice of cancellation to the deleted text begin foreclosure consultantdeleted text end new text begin solicitornew text end at the address specified in the contract.
(c) Notice of cancellation, if given by mail, is effective when deposited in the mail properly addressed with postage prepaid.
(d) Notice of cancellation given by the owner need not take the particular form as provided with the contract and, however expressed, is effective if it indicates the intention of the owner not to be bound by the contract.
new text begin This section is effective July 1, 2021, and applies to contracts executed on or after that date. new text end
(a) Every contract must be in writing and must fully disclose the exact nature of the deleted text begin foreclosure consultant'sdeleted text end new text begin solicitor'snew text end services and the total amount and terms of compensation.
(b) The following notice, printed in at least 14-point boldface type and completed with the name of the deleted text begin foreclosure consultantdeleted text end new text begin solicitornew text end , must be printed immediately above the statement required by paragraph (c):
"NOTICE REQUIRED BY MINNESOTA LAW | ||
......................... (Name) or anyone working for him or her CANNOT: | ||
(1) Take any money from you or ask you for money until ......................... (Name) has completely finished doing everything he or she said he or she would do; and | ||
(2) Ask you to sign or have you sign any lien, mortgage, or deed." |
(c) The contract must be written in the same language as principally used by the deleted text begin foreclosure consultantdeleted text end new text begin solicitornew text end to describe his or her services or to negotiate the contract, must be dated and signed by the owner, and must contain in immediate proximity to the space reserved for the owner's signature a conspicuous statement in a size equal to at least 10-point boldface type, as follows:
"You, the owner, may cancel this transaction at any time prior to midnight of the third business day after the date of this transaction. See the attached notice of cancellation form for an explanation of this right."
(d) The notice of cancellation must contain, and the contract must contain on the first page, in a type size no smaller than that generally used in the body of the document, each of the following:
(1) the name and physical address of the deleted text begin foreclosure consultantdeleted text end new text begin solicitornew text end to which the notice of cancellation is to be mailed or otherwise delivered. A post office box does not constitute a physical address. A post office box may be designated for delivery by mail only if it is accompanied by a physical address at which the notice could be delivered by a method other than mail. An e-mail address may be included, in addition to the physical address; and
(2) the date the owner signed the contract.
(e) Cancellation occurs when the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end delivers, by any means, written notice of cancellation to the address specified in the contract. If cancellation is mailed, delivery is effective upon mailing. If e-mailed, cancellation is effective upon transmission. The contract must be accompanied by a completed form in duplicate, captioned "notice of cancellation," which must be attached to the contract, must be easily detachable, and must contain in at least 10-point type the following statement written in the same language as used in the contract:
"NOTICE OF CANCELLATION | ||
. | ||
(Enter date of transaction) (Date) | ||
You may cancel this transaction, without any penalty or obligation, within three business days from the above date. | ||
To cancel this transaction, you may use any of the following methods: (1) mail or otherwise deliver a signed and dated copy of this cancellation notice, or any other written notice of cancellation; or (2) e-mail a notice of cancellation | ||
to . | ||
(Name of deleted text begin foreclosure consultantdeleted text end new text begin solicitornew text end ) | ||
at . | ||
(Physical address of deleted text begin foreclosure consultant'sdeleted text end new text begin solicitor'snew text end place of business) | ||
. | ||
(E-mail address of deleted text begin foreclosure consultant'sdeleted text end new text begin solicitor'snew text end place of business) | ||
NOT LATER THAN MIDNIGHT OF . | ||
(Date) | ||
I hereby cancel this transaction . | ||
(Date) | ||
. | ||
(Owner's signature)" |
(f) The deleted text begin foreclosure consultantdeleted text end new text begin solicitornew text end shall provide the owner with a copy of the contract and the attached notice of cancellation immediately upon execution of the contract.
(g) The three business days during which the owner may cancel the contract shall not begin to run until the deleted text begin foreclosure consultantdeleted text end new text begin solicitornew text end has complied with this section.
new text begin This section is effective July 1, 2021, and applies to contracts executed on or after that date. new text end
It is a violation for a deleted text begin foreclosure consultantdeleted text end new text begin solicitornew text end to:
(1) claim, demand, charge, collect, or receive any compensation until after the deleted text begin foreclosure consultantdeleted text end new text begin solicitornew text end has fully performed each and every service the deleted text begin foreclosure consultantdeleted text end new text begin solicitornew text end contracted to perform or represented he or she would perform;
(2) claim, demand, charge, collect, or receive any fee, interest, or any other compensation for any reason which exceeds eight percent per annum of the amount of any loan which the deleted text begin foreclosure consultantdeleted text end new text begin solicitornew text end may make to the owner. Such a loan must not, as provided in clause (3), be secured by the new text begin covered new text end residence deleted text begin in foreclosuredeleted text end or any other real or personal property;
(3) take any wage assignment, any lien of any type on real or personal property, or other security to secure the payment of compensation. Any such security is void and unenforceable;
(4) receive any consideration from any third party in connection with services rendered to an owner unless the consideration is first fully disclosed to the owner;
(5) acquire any interest, directly or indirectly, or by means of a subsidiary or affiliate in a new text begin covered new text end residence deleted text begin in foreclosuredeleted text end from an owner with whom the deleted text begin foreclosure consultantdeleted text end new text begin solicitornew text end has contracted;
(6) take any power of attorney from an owner for any purpose, except to inspect documents as provided by law; or
(7) induce or attempt to induce any owner to enter a contract which does not comply in all respects with sections 325N.02 and 325N.03.
new text begin This section is effective July 1, 2021. new text end
Any waiver by an owner of the provisions of sections 325N.01 to 325N.09 is void and unenforceable as contrary to public policy. Any attempt by a deleted text begin foreclosure consultantdeleted text end new text begin solicitornew text end to induce an owner to waive the owner's rights is a violation of sections 325N.01 to 325N.09.
new text begin This section is effective July 1, 2021. new text end
(a) A violation of sections 325N.01 to 325N.09 is considered to be a violation of section 325F.69, and all remedies of section 8.31 are available for such an action. A private cause of action under section 8.31 by deleted text begin a foreclosed homeownerdeleted text end new text begin an ownernew text end is in the public interest. An owner may bring an action against a deleted text begin foreclosure consultantdeleted text end new text begin solicitornew text end for any violation of sections 325N.01 to 325N.09. Judgment must be entered for actual damages, reasonable attorney fees and costs, and appropriate equitable relief.
(b) The rights and remedies provided in paragraph (a) are cumulative to, and not a limitation of, any other rights and remedies provided by law. Any action brought pursuant to this section must be commenced within deleted text begin fourdeleted text end new text begin sixnew text end years from the date of the alleged violation.
(c) The court may award exemplary damages up to 1-1/2 times the compensation charged by the deleted text begin foreclosure consultantdeleted text end new text begin solicitornew text end if the court finds that the deleted text begin foreclosure consultantdeleted text end new text begin solicitornew text end violated the provisions of section 325N.04, clause (1), (2), or (4), and the deleted text begin foreclosure consultant'sdeleted text end new text begin solicitor'snew text end conduct was in bad faith.
(d) Notwithstanding any other provision of this section, no action may be brought on the basis of a violation of sections 325N.01 to 325N.09, except by an owner against whom the violation was committed or by the attorney general. This limitation does not apply to administrative action by the commissioner of commerce.
new text begin This section is effective July 1, 2021. new text end
deleted text begin "Foreclosed homeowner" means an owner of residential real property, including a condominium, or an owner of real property that is principally used for farming as defined in section 500.24, subdivision 2, that is the primary residence of the owner and whose mortgage on the real property is or was in foreclosuredeleted text end new text begin "Owner" has the meaning given in section 325N.01, paragraph (g)new text end .
new text begin This section is effective July 1, 2021. new text end
deleted text begin "Foreclosuredeleted text end new text begin "Propertynew text end reconveyance" deleted text begin means a transaction involving:deleted text end
deleted text begin (1) the transfer of title to real property by a foreclosed homeowner during a foreclosure proceeding, either by transfer of interest from the foreclosed homeowner or by creation of a mortgage or other lien or encumbrance during the foreclosure process that allows the acquirer to obtain title to the property by redeeming the property as a junior lienholder; and deleted text end
deleted text begin (2) the subsequent conveyance, or promise of a subsequent conveyance, of an interest back to the foreclosed homeowner by the acquirer or a person acting in participation with the acquirer that allows the foreclosed homeowner to possess either the residence in foreclosure or other real property, which interest includes, but is not limited to, an interest in a contract for deed, purchase agreement, option to purchase, or leasedeleted text end new text begin has the meaning given in section 325N.01, paragraph (c)new text end .
new text begin This section is effective July 1, 2021. new text end
deleted text begin "Foreclosuredeleted text end new text begin "Equitynew text end purchaser" means a person that has acted as the acquirer in a deleted text begin foreclosuredeleted text end new text begin propertynew text end reconveyance. deleted text begin Foreclosuredeleted text end new text begin Equitynew text end purchaser also includes a person that has acted in joint venture or joint enterprise with one or more acquirers in a deleted text begin foreclosuredeleted text end new text begin propertynew text end reconveyance. deleted text begin A foreclosuredeleted text end new text begin An equitynew text end purchaser does not include: (i) a natural person who shows that the natural person is not in the business of deleted text begin foreclosuredeleted text end new text begin equitynew text end purchasing and has a prior personal relationship with the deleted text begin forecloseddeleted text end homeownernew text begin of the covered residence, unless a showing of fraud under section 325F.69, subdivision 1, has been madenew text end , or (ii) a federal or state chartered bank, savings bank, thrift, or credit union.
new text begin This section is effective July 1, 2021. new text end
"Resale" means a bona fide market sale of the property subject to the deleted text begin foreclosuredeleted text end new text begin propertynew text end reconveyance by the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser to an unaffiliated third party.
new text begin This section is effective July 1, 2021. new text end
deleted text begin "Residence in foreclosure" means residential real property consisting of one to four family dwelling units, one of which the owner occupies as the owner's principal place of residence, or real property that is principally used for farming, as defined in section 500.24, subdivision 2, whether or not parcels are contiguous, so long as the owner occupies one of the parcels as the owner's principal place of residence, where there is a delinquency or default on any loan payment or debt secured by or attached to the real property, including, but not limited to, contract for deed paymentsdeleted text end new text begin "Covered residence" has the meaning given in section 325N.01, paragraph (f)new text end .
new text begin This section is effective July 1, 2021. new text end
deleted text begin A foreclosuredeleted text end new text begin An equitynew text end purchaser shall enter into every deleted text begin foreclosuredeleted text end new text begin propertynew text end reconveyance in the form of a written contract. Every contract must be written in letters of a size equal to at least 12-point boldface type, in the same language principally used by the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser and deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end to negotiate the sale of the new text begin covered new text end residence deleted text begin in foreclosuredeleted text end and must be fully completed and signed and dated by the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end and deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser before the execution of any instrument of conveyance of the new text begin covered new text end residence deleted text begin in foreclosuredeleted text end .
new text begin This section is effective July 1, 2021, and applies to contracts executed on or after that date. new text end
Every contract required by section 325N.11 must contain the entire agreement of the parties and must include the following terms:
(1) the name, business address, and the telephone number of the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser;
(2) the address of the new text begin covered new text end residence deleted text begin in foreclosuredeleted text end ;
(3) the total consideration to be given by the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser in connection with or incident to the sale;
(4) a complete description of the terms of payment or other consideration including, but not limited to, any services of any nature that the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser represents he or she will perform for the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end before or after the sale;
(5) the time at which possession is to be transferred to the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser;
(6) a complete description of the terms of any related agreement designed to allow the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end to remain in the home, such as a rental agreement, repurchase agreement, contract for deed, or lease with option to buy;
(7) a notice of cancellation as provided in section 325N.14, paragraph (b); and
(8) the following notice in at least 14-point boldface type, if the contract is printed or in capital letters if the contract is typed, and completed with the name of the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser, immediately above the statement required by section 325N.14, paragraph (a):
"NOTICE REQUIRED BY MINNESOTA LAW
Until your right to cancel this contract has ended, ....... (Name) or anyone working for ....... (Name) CANNOT ask you to sign or have you sign any deed or any other document."
The contract required by this section survives delivery of any instrument of conveyance of the new text begin covered new text end residence deleted text begin in foreclosuredeleted text end , and has no effect on persons other than the parties to the contract.
new text begin This section is effective July 1, 2021, and applies to contracts executed on or after that date. new text end
(a) In addition to any other right of rescission, the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end has the right to cancel any contract with deleted text begin a foreclosuredeleted text end new text begin an equitynew text end purchaser until midnight of the fifth business day following the day on which the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end signs a contract that complies with sections 325N.10 to 325N.15 or until 8:00 a.m. on the last day of the period during which the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end has a right of redemption, whichever occurs first.
(b) Cancellation occurs when the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end delivers, by any means, written notice of cancellation, provided that, at a minimum, the contract and the notice of cancellation must contain a physical address to which notice of cancellation may be mailed or otherwise delivered. A post office box does not constitute a physical address. A post office box may be designated for delivery by mail only if it is accompanied by a physical address at which the notice could be delivered by a method other than mail. An e-mail address may be provided in addition to the physical address. If cancellation is mailed, delivery is effective upon mailing. If e-mailed, cancellation is effective upon transmission.
(c) A notice of cancellation given by the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end need not take the particular form as provided with the contract.
(d) Within ten days following receipt of a notice of cancellation given in accordance with this section, the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser shall return without condition any original contract and any other documents signed by the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end .
new text begin This section is effective July 1, 2021, and applies to contracts executed on or after that date. new text end
(a) The contract must contain in immediate proximity to the space reserved for the deleted text begin foreclosed homeowner'sdeleted text end new text begin owner'snew text end signature a conspicuous statement in a size equal to at least 14-point boldface type, if the contract is printed, or in capital letters, if the contract is typed, as follows:
"You may cancel this contract for the sale of your house without any penalty or obligation at any time before | ||
. | ||
(Date and time of day) | ||
See the attached notice of cancellation form for an explanation of this right." |
The deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser shall accurately enter the date and time of day on which the cancellation right ends.
(b) The contract must be accompanied by a completed form in duplicate, captioned "notice of cancellation" in a size equal to a 12-point boldface type if the contract is printed, or in capital letters, if the contract is typed, followed by a space in which the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser shall enter the date on which the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end executes the contract. This form must be attached to the contract, must be easily detachable, and must contain in type of at least 10 points, if the contract is printed or in capital letters if the contract is typed, the following statement written in the same language as used in the contract:
"NOTICE OF CANCELLATION | ||
. | ||
(Enter date contract signed) | ||
You may cancel this contract for the sale of your house, without any penalty or obligation, at any time before | ||
. | ||
(Enter date and time of day) | ||
To cancel this transaction, you may use any of the following methods: (1) mail or otherwise deliver a signed and dated copy of this cancellation notice; or (2) e-mail a notice of cancellation to | ||
. | ||
(Name of purchaser) | ||
at . | ||
(Physical address of purchaser's place of business) | ||
. | ||
(E-mail address of foreclosure consultant's place of business) | ||
NOT LATER THAN . | ||
(Enter date and time of day) | ||
I hereby cancel this transaction . | ||
(Date) | ||
. | ||
(Seller's signature)" |
(c) The deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser shall provide the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end with a copy of the contract and the attached notice of cancellation at the time the contract is executed by all parties.
(d) The five business days during which the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end may cancel the contract must not begin to run until all parties to the contract have executed the contract and the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser has complied with this section.
new text begin This section is effective July 1, 2021, and applies to contracts executed on or after that date. new text end
Any waiver of the provisions of sections 325N.10 to 325N.18 is void and unenforceable as contrary to public policy except a consumer may waive the five-day right to cancel provided in section 325N.13 if the property is subject to a foreclosure sale within the five business days, and the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end agrees to waive his or her right to cancel in a handwritten statement signed by all parties holding title to the foreclosed property.
new text begin This section is effective July 1, 2021. new text end
deleted text begin A foreclosuredeleted text end new text begin An equitynew text end purchaser shall not:
(a) enter into, or attempt to enter into, a deleted text begin foreclosuredeleted text end new text begin propertynew text end reconveyance with deleted text begin a foreclosed homeownerdeleted text end new text begin an ownernew text end unless:
(1) the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser verifies and can demonstrate that the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end has a reasonable ability to pay for the subsequent conveyance of an interest back to the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end . In the case of a lease with an option to purchase, payment ability also includes the reasonable ability to make the lease payments and purchase the property within the term of the option to purchase. There is a rebuttable presumption that deleted text begin a homeownerdeleted text end new text begin an ownernew text end is reasonably able to pay for the subsequent conveyance if the owner's payments for primary housing expenses and regular principal and interest payments on other personal debt, on a monthly basis, do not exceed 60 percent of the owner's monthly gross income. For the purposes of this section, "primary housing expenses" means the sum of payments for regular principal, interest, rent, utilities, hazard insurance, real estate taxes, and association dues. There is a rebuttable presumption that the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser has not verified reasonable payment ability if the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser has not obtained documents other than a statement by the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end of assets, liabilities, and income;
(2) the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser and the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end complete a closing for any deleted text begin foreclosuredeleted text end new text begin propertynew text end reconveyance in which the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser obtains a deed or mortgage from deleted text begin a foreclosed homeownerdeleted text end new text begin an ownernew text end . For purposes of this section, "closing" means an in-person meeting to complete final documents incident to the sale of the real property or creation of a mortgage on the real property conducted by a closing agent, as defined in section 82.55, who is not employed by or an affiliate of the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser, or employed by such an affiliate, and who does not have a business or personal relationship with the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser other than the provision of real estate settlement services;
(3) the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser obtains the written consent of the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end to a grant by the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser of any interest in the property during such times as the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end maintains any interest in the property; and
(4) the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser complies with the requirements for disclosure, loan terms, and conduct in the federal Home Ownership Equity Protection Act, United States Code, title 15, section 1639, or its implementing regulation, Code of Federal Regulations, title 12, sections 226.31, 226.32, and 226.34, for any deleted text begin foreclosuredeleted text end new text begin propertynew text end reconveyance in which the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end obtains a vendee interest in a contract for deed, regardless of whether the terms of the contract for deed meet the annual percentage rate or points and fees requirements for a covered loan in Code of Federal Regulations, title 12, sections 226.32 (a) and (b);
(b) fail to either:
(1) ensure that title to the subject dwelling has been reconveyed to the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end ; or
(2) make a payment to the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end such that the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end has received consideration in an amount of at least 82 percent of the fair market value of the property within 150 days of either the eviction or voluntary relinquishment of possession of the dwelling by the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end . The deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser shall make a detailed accounting of the basis for the payment amount, or a detailed accounting of the reasons for failure to make a payment, including providing written documentation of expenses, within this 150-day period. The accounting shall be on a form prescribed by the attorney general, in consultation with the commissioner of commerce, without being subject to the rulemaking procedures of chapter 14. For purposes of this provision, the following applies:
(i) there is a rebuttable presumption that an appraisal by a person licensed or certified by an agency of the federal government or this state to appraise real estate constitutes the fair market value of the property;
(ii) the time for determining the fair market value amount shall be determined in the deleted text begin foreclosuredeleted text end new text begin propertynew text end reconveyance contract as either at the time of the execution of the deleted text begin foreclosuredeleted text end new text begin propertynew text end reconveyance contract or at resale. If the contract states that the fair market value shall be determined at the time of resale, the fair market value shall be the resale price if it is sold within 120 days of the eviction or voluntary relinquishment of the property by the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end . If the contract states that the fair market value shall be determined at the time of resale, and the resale is not completed within 120 days of the eviction or voluntary relinquishment of the property by the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end , the fair market value shall be determined by an appraisal conducted during this 120-day period and payment, if required, shall be made to the deleted text begin homeownerdeleted text end new text begin ownernew text end , but the fair market value shall be recalculated as the resale price on resale and an additional payment amount, if appropriate based on the resale price, shall be made to the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end within 15 days of resale, and a detailed accounting of the basis for the payment amount, or a detailed accounting of the reasons for failure to make additional payment, shall be made within 15 days of resale, including providing written documentation of expenses. The accounting shall be on a form prescribed by the attorney general, in consultation with the commissioner of commerce, without being subject to the rulemaking procedures of chapter 14;
(iii) "consideration" shall mean any payment or thing of value provided to the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end , including unpaid rent or contract for deed payments owed by the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end prior to the date of eviction or voluntary relinquishment of the property, reasonable costs paid to third parties necessary to complete the deleted text begin foreclosuredeleted text end new text begin propertynew text end reconveyance transaction, payment of money to satisfy a debt or legal obligation of the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end , or the reasonable cost of repairs for damage to the dwelling caused by the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end ; or a penalty imposed by a court for the filing of a frivolous claim under section 325N.18, subdivision 6, but
(iv) "consideration" shall not include amounts imputed as a down payment or fee to the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser, or a person acting in participation with the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser, incident to a contract for deed, lease, or option to purchase entered into as part of the deleted text begin foreclosuredeleted text end new text begin propertynew text end reconveyance, except for reasonable costs paid to third parties necessary to complete the deleted text begin foreclosuredeleted text end new text begin propertynew text end reconveyance;
(c) enter into repurchase or lease terms as part of the subsequent conveyance that are unfair or commercially unreasonable, or engage in any other unfair conduct;
(d) represent, directly or indirectly, that:
(1) the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser is acting as an advisor or a consultant, or in any other manner represents that the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser is acting on behalf of the deleted text begin homeownerdeleted text end new text begin ownernew text end ;
(2) the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser has certification or licensure that the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser does not have, or that the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser is not a member of a licensed profession if that is untrue;
(3) the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser is assisting the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end to "save the house" or substantially similar phrase; or
(4) the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser is assisting the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end in preventing a completed foreclosurenew text begin or forfeiturenew text end if the result of the transaction is that the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end will not complete a redemption of the property;
(e) make any other statements, directly or by implication, or engage in any other conduct that is false, deceptive, or misleading, or that has the likelihood to cause confusion or misunderstanding, including, but not limited to, statements regarding the value of the new text begin covered new text end residence deleted text begin in foreclosuredeleted text end , the amount of proceeds the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end will receive after a deleted text begin foreclosuredeleted text end salenew text begin of the covered residencenew text end , any contract term, or the deleted text begin foreclosed homeowner'sdeleted text end new text begin owner'snew text end rights or obligations incident to or arising out of the deleted text begin foreclosuredeleted text end new text begin propertynew text end reconveyance; or
(f) do any of the following until the time during which the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end may cancel the transaction has fully elapsed:
(1) accept from any deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end an execution of, or induce any deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end to execute, any instrument of conveyance of any interest in the new text begin covered new text end residence deleted text begin in foreclosuredeleted text end ;
(2) record with the county recorder or file with the registrar of titles any document, including but not limited to, any instrument of conveyance, signed by the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end ;
(3) transfer or encumber or purport to transfer or encumber any interest in the new text begin covered new text end residence deleted text begin in foreclosuredeleted text end to any third party, provided no grant of any interest or encumbrance is defeated or affected as against a bona fide purchaser or encumbrance for value and without notice of a violation of sections 325N.10 to 325N.18, and knowledge on the part of any such person or entity that the property was "deleted text begin realdeleted text end new text begin coverednew text end property deleted text begin in foreclosuredeleted text end " does not constitute notice of a violation of sections 325N.10 to 325N.18. This section does not abrogate any duty of inquiry which exists as to rights or interests of persons in possession of the deleted text begin realdeleted text end new text begin coverednew text end property deleted text begin in foreclosuredeleted text end ; or
(4) pay the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end any consideration.
new text begin This section is effective July 1, 2021. new text end
A violation of sections 325N.10 to 325N.17 is considered to be a violation of section 325F.69, and all the remedies of section 8.31 are available for such an action. A private right of action under section 8.31 by deleted text begin a foreclosed homeownerdeleted text end new text begin an ownernew text end is in the public interest.
new text begin This section is effective July 1, 2021. new text end
In a private right of action under section 8.31 for a violation of section 325N.17, the court may award exemplary damages of any amount. In the event the court determines that an award of exemplary damages is appropriate, the amount of exemplary damages awarded shall not be less than 1-1/2 times the deleted text begin foreclosed homeowner'sdeleted text end new text begin owner'snew text end actual damages. Any claim for exemplary damages brought pursuant to this section must be commenced within four years after the date of the alleged violation.
new text begin This section is effective July 1, 2021. new text end
Any deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser who engages in any practice which would operate as a fraud or deceit upon deleted text begin a foreclosed homeownerdeleted text end new text begin an ownernew text end may, upon conviction, be fined not more than $50,000 or imprisoned not more than one year, or both. Prosecution or conviction for any one of the violations does not bar prosecution or conviction for any other offenses.
new text begin This section is effective July 1, 2021. new text end
Failure of the parties to complete the reconveyance transaction, in the absence of additional misconduct, shall not subject deleted text begin a foreclosuredeleted text end new text begin an equitynew text end purchaser to the criminal penalties under this section or section 325N.07.
new text begin This section is effective July 1, 2021. new text end
(a) A court hearing an eviction action against deleted text begin a foreclosed homeownerdeleted text end new text begin an ownernew text end must issue an automatic stay, without imposition of a bond, if a defendant makes a prima facie showing that the defendant:
(1) has (i) commenced an action concerning a deleted text begin foreclosuredeleted text end new text begin propertynew text end reconveyance; (ii) asserts a defense under section 504B.121 that the property that is the subject of the eviction action is also the subject of a deleted text begin foreclosuredeleted text end new text begin propertynew text end reconveyance in violation of sections 325N.10 to 325N.17; or (iii) asserts a claim or affirmative defense of fraud, false pretense, false promise, misrepresentation, misleading statement, or deceptive practice, in connection with a deleted text begin foreclosuredeleted text end new text begin propertynew text end reconveyance;
(2) owned the deleted text begin forecloseddeleted text end new text begin coverednew text end residence;
(3) conveyed title to the deleted text begin forecloseddeleted text end new text begin coverednew text end residence to a third party upon a promise that the defendant would be allowed to occupy the deleted text begin forecloseddeleted text end new text begin coverednew text end residence or other real property in which the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser or a person acting in participation with the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser has an interest and that the deleted text begin forecloseddeleted text end new text begin coverednew text end residence or other real property would be the subject of a deleted text begin foreclosuredeleted text end new text begin propertynew text end reconveyance; and
(4) since the conveyance, has continuously occupied the deleted text begin forecloseddeleted text end new text begin coverednew text end residence or other real property in which the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser or a person acting in participation with the deleted text begin foreclosuredeleted text end new text begin equitynew text end purchaser has an interest.
For purposes of this subdivision, notarized affidavits are acceptable means of proof to meet the defendant's burden. Upon good cause shown, a defendant may request and the court may grant up to an additional two weeks to produce evidence required to make the prima facie showing.
(b) A court may award to a plaintiff a $500 penalty upon a showing that the defendant filed a frivolous claim or asserted a frivolous defense.
(c) The automatic stay expires upon the later of:
(1) the failure of the deleted text begin foreclosed homeownerdeleted text end new text begin ownernew text end to commence an action in a court of competent jurisdiction in connection with a deleted text begin forecloseddeleted text end new text begin propertynew text end reconveyance transaction within 90 days after the issuance of the stay; or
(2) the issuance of an order lifting the stay by a court hearing claims related to the deleted text begin foreclosuredeleted text end new text begin propertynew text end reconveyance.
(d) If, after the expiration of the stay or an order lifting the stay, a court finds that the defendant's claim or defense was asserted in bad faith and wholly without merit, the court may impose a sanction against the defendant of $500 plus reasonable attorney fees.
new text begin This section is effective July 1, 2021. new text end
Presented to the governor March 22, 2021
Signed by the governor March 23, 2021, 11:27 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes