2006 Minnesota Statutes

82A.14 UNFAIR PRACTICES.
No membership camping operator shall:
(1) sell or offer to sell any membership camping contract with respect to a campground
located in this state which is subject to a blanket encumbrance unless;
(i) each person holding an interest in a blanket encumbrance shall have executed and
delivered a nondisturbance agreement and recorded the agreement in the real estate records of the
county in which the campground is located; or
(ii) a bond or irrevocable letter of credit has been issued, or cash or a certified check in an
amount sufficient to cover payment of all amounts secured by the blanket encumbrance has been
deposited, in the name of the state for the benefit and protection of purchasers of membership
camping contracts and subject to terms as approved by the commissioner. Any interest accruing
on amounts held in the account shall be payable, as and when earned, to the membership camping
operator. Any bond shall be executed by an insurance company authorized to do business in this
state, which has sufficient net worth to satisfy the indebtedness and which has given consent
to be sued in this state. Any irrevocable letter of credit shall be issued by a bank or savings
association which has sufficient net worth to satisfy the indebtedness and which has given its
consent to be sued in this state. The bond, cash, certified check, or irrevocable letter of credit shall
be in an amount which is not less than 110 percent of the remaining principal balance of every
indebtedness or obligation secured by a blanket encumbrance affecting the campground. The bond
or agreement accompanying the cash, certified check, or irrevocable bank letter of credit shall
provide for the payment of all amounts secured by the blanket encumbrance, including costs,
expenses, and legal fees of the lien holder, if for any reason the blanket encumbrance is enforced.
The bond, cash, certified check, or letter of credit may be reduced periodically in proportion to the
reductions in the amount secured by the blanket encumbrance; or
(iii) the lender providing the major hypothecation loan to the membership camping operator
(the "hypothecation lender"), and having a lien on or security interest in the membership camping
operator's interest in the campground, shall have executed and delivered a nondisturbance
agreement and recorded the agreement in the real estate records of the county in which the
campground is located in this state. Each person holding an interest in a blanket encumbrance
superior to the interest held by the hypothecation lender shall have executed, delivered, and
recorded an instrument stating that the person shall give the hypothecation lender notice of,
and at least 30 days' opportunity to cure, any default under the blanket encumbrance which
entitles the person to foreclose upon the campground. The instrument shall state that the notice
and opportunity to cure shall be given before the person commences any foreclosure action
affecting the campground and in accordance with the instrument. The hypothecation lender shall
have guaranteed that it will cure or arrange for the cure of the default. Any holder of a blanket
encumbrance inferior to the hypothecation lender who acquires the campground in foreclosure
shall take the campground subject to the hypothecation lender's nondisturbance agreement. For
purposes of this provision, a "hypothecation lender" is any lender extending a loan or line of credit
to a membership camping operator secured by all or substantially all of the contract receivables
arising from the membership camping operator's sale of membership camping contracts in this
state. For purposes of this provision, "lender" means an insurance company or a federally or state
chartered bank, savings association, any other lending institution, the deposits of which are
guaranteed or insured, by a federal agency, or any other person which has sufficient net worth to
pay the obligations pursuant to this section if there are no reasonable grounds to believe that the
lender will not be able to pay these obligations in the future; or
(iv) the operator can provide an alternative plan acceptable to the commissioner;
(2) sell any campground which is located in this state and available for use by purchasers,
unless:
(i) the membership camping operator sells the campground to a person who takes the
campground subject to all rights and interests of purchasers, and contractually agrees not
to compromise the rights and interests of purchasers in regard to future conveyances of, or
encumbrances placed on the campground;
(ii) the membership camping operator immediately substitutes for the use of purchasers
another campground which is in the same general area and is at least as desirable for the purpose
of camping and outdoor recreation as the previous campground. For purposes of this provision,
"same general area" means a location within a 50-mile radius of the previous campground; or
(iii) the membership camping operator immediately substitutes for the use of purchasers
another campground and the substitution is approved by two-thirds of all existing purchasers;
(3) substitute any campground located in this state and available for use by purchasers with a
different campground, unless the substituted campground is in the same general area and is at
least as desirable for the purpose of camping and outdoor recreation as the previous campground.
For purposes of this provision, "same general area" means a location within a 50-mile radius of
the previous campground;
(4) sell membership camping contracts with respect to any campground located in this state
that is not owned by the membership camping operator or leased by the membership camping
operator for a lease term at least equal to the term of the membership camping contract with
respect to the campground;
(5) fail to disclose the circumstances, if any, under which any reciprocal program that has
been offered as an inducement to purchasers may be terminated;
(6) materially modify any campground rules or regulations or modify purchasers' rights to
or the scope and nature of an amenity in a manner which significantly degrades or diminishes
the material rights of any purchaser without prior notice to purchasers resident in this state;
or materially adversely modify any material campground rules or regulations or materially
adversely modify purchaser's rights to or the scope and nature of an amenity in a manner which
the purchaser proves:
(i) significantly degrades or diminishes any material rights of that purchaser; and
(ii) has no compensating benefit to any other purchaser or groups of purchasers;
(7) terminate or provide for termination of a membership camping contract, except for good
cause. "Good cause" shall mean failure of the purchaser to substantially or consistently comply
with reasonable requirements imposed by the membership camping contract and campground
rules and regulations;
(8) terminate a membership camping contract without first giving written notice setting
forth all reasons for the termination to the purchaser at least 30 days prior to the termination
becoming effective;
(9) increase a purchaser's membership dues after the sale of a contract in such a manner as to
result in an increase thereof greater than whichever of the following increases is higher:
(i) the actual increase in costs of services or improvements for which the membership dues
are imposed; or
(ii) the increase in the United States city average Consumer Price Index for all urban
consumers issued by the United States Bureau of Labor Statistics or such other federally prepared
Consumer Price Index or Wage Earner Index as reasonably selected by the operator in its
discretion;
(10) require purchaser to certify the absence of any misrepresentation or other violation of
this chapter provided, however, that a purchaser's acknowledgment of receipt of a copy of the
membership camping contract shall not be deemed to constitute such a certification;
(11) require the purchaser to waive the right to assert against the membership camping
operator or any assignee any claim or defense the purchaser may have against the membership
camping operator under the membership camping contract; or
(12) materially and repeatedly fail to maintain a campground in this state in the manner
contractually agreed upon.
History: 1985 c 129 s 14; 1986 c 444; 1995 c 202 art 1 s 25