HOUSING LAW
Prepared by:
Ron Elwood, Staff Attorney
Legal Services Advocacy Project
651-222-3749, ext. 109
relwood@mnlsap.org

I. APPROPRIATIONS
Chapter 78, Article 1, Section 6, Subds. 4, 5, 6, and 9 (HF 2088)
Effective July 1, 2009

Appropriates:

• $2,638,000 in Fiscal Year (FY) 2010 and 2011 to rental housing assistance for persons with a mental illness;
• $7,465,000 in FY 2010 and FY 2011 to family homeless prevention and assistance programs;
• $860,000 in FY 2010 and FY 2011 to the home ownership assistance program; and
• $865,000 in FY 2010 and FY 2011 to the homeownership education, counseling, and training (HECAT) program.
  

II. FORECLOSURE LAW CHANGES

A. Additional Duty Imposed on Holder of Sheriff's Certificate to Protect Premises
Chapter 123, Section 9 (SF 1147)
Amends Minn. Stat. § 582.031
Effective August 1, 2009

Imposes upon holder of a sheriff's certificate, where the holder knows that there is prima facie evidence of abandonment, to enter the premises and make reasonable periodic inspections, install or change the locks on all doors, install locks on all windows that do not have locks, and ensure that any existing window locks are functioning properly. Permits the holder to take additional steps to prevent waste and prevent or minimize damage from the weather, vandalism, trespass, or other illegal activity. Allows the holder to recover costs of these actions upon redemption.

B. Five Week Redemption Period
Chapter 123, Sections 11, 12, and 13 (SF 1147)
Amends Minn. Stat. § 582.032, subds. 4, 5, and 7

1. City May Petition
Allows a city or county to initiate or intervene in an action to reduce the redemption period to five weeks.
Effective August 1, 2009

2. Remedy for Wrongful Finding of Abandonment
Clarifies that Rule 60.02 (i.e., vacation for mistakes, newly discovered evidence, etc.) of the Minnesota Rules of Civil Procedure applies to findings that the failure to appear is conclusive proof of abandonment.
Effective retroactively and prospectively from May 21, 2009, and applies to orders issued before, on, or after that date

C. Foreclosure Data
Chapter 130, Section 5 (SF 1302)
Amends Minn. Stat. § 580.025
Effective August 1, 2009 for foreclosures in which the notice of pendency under section 580.032 is recorded on or after that date

Clarifies that the data requirements added in 2008 to the notice of pendency apply only to foreclosures involving one-to-four family dwellings.

D. Notice of Foreclosure

1. Requirement to Specify Date and Time to Vacate.
Requires that the notice of foreclosure for single-family, owner-occupied dwellings specify: (1) the date on or before which the homeowner must vacate if the mortgage is not reinstated or redeemed; and (2) the time by which the homeowner must vacate is 11:59 p.m.
Chapter 130, Section 6 (SF 1302)
Amends Minn. Stat. § 580.04
Effective August 1, 2009 for foreclosures in which the notice of pendency under section 580.032 is recorded on or after that date

2. Requirement to Add Street Address
Requires that the notice of foreclosure include the commonly used street address of the property.
Chapter 123, Section 6 (SF 1147)
Amends Minn. Stat. § 580.04
Effective August 1, 2009 and applies to notices of sale first published on or after that date

E. Notice of Opportunity for Counseling
Chapter 130, Section 4 (SF 1302)
Amends Minn. Stat. § 580.04
Effective August 1, 2009 for foreclosures in which the notice of pendency under section 580.032 or the lis pendens for a foreclosure under chapter 581 is recorded on or after that date

Clarifies, by removing a cross reference, that the applicability of the right to the notice of the opportunity of foreclosure prevention counseling is not limited to homeowners with "conventional loans," defined as loans whose principal is $100,000 or less.

F. Notice of Postponement of Foreclosure
Chapter 130, Section 9 (SF 1302)
Amends Minn. Stat. § 580.09
Effective August 1, 2009 for notices of postponement published or served on or after that date

Requires the foreclosing party to provide notice of postponement, including the date and time if known, directly to the homeowner. Requires the notice to inform the homeowner: (1) of the date on or before which the homeowner must vacate the property if the mortgage is not reinstated or redeemed; and (2) that the time by which the homeowner must vacate is 11:59 p.m.

G. Postponement of Sheriff's Sale and Extension of Reinstatement Period
Chapter 78, Article 8, Section 21 (HF 2088)
Amends Minn. Stat. § 580.07
Effective June 14, 2009 and applies to foreclosure sales scheduled to occur on or after that date

1. Right to Postpone
Permits a homeowner of a homesteaded property - at any time after the first publication of the notice of mortgage foreclosure sale but at least 15 days before the scheduled sale - to postpone the sale for five months, effectively replacing most of the redemption period with an extension of the reinstatement period.

2. Procedure for Postponing
Specifies that the homeowner may postpone the sale by: (1) executing a sworn affidavit in a form set by statute; (2) recording the affidavit with the County Recorder(s) and Registrar of Titles where the mortgage was recorded; (3) filing a copy of the recorded affidavit with the sheriff conducting the sale; (4) and delivering a copy of the recorded affidavit to the foreclosing attorney.

3. Effect on Redemption Period
Provides that recordation automatically reduces the redemption period to five weeks, effectively providing one additional week over and above the typical period comprising reinstatement and redemption.

4. Limitation on Exercising Right to Postpone
Allows, without exception, only one postponement.

H. Rights of Homeowners Subject to Judicial Foreclosure
Chapter 130, Sections 1 and 7 (SF 1302)
Amends Minn. Stat. §§ 580.021, subd. 1; and 580.041, subd. 1a
Effective August 1, 2009 for foreclosures in which the notice of pendency under section 580.032 or the lis pendens for a foreclosure under chapter 581 is recorded on or after that date

1. Pre-Foreclosure Notice
Extends to judicial foreclosures (foreclosures by action) the requirements to: (1) provide notice to the homeowner: (i) of the opportunity for foreclosure prevention counseling; and (ii) that the homeowner's contact information will be shared with the foreclosure counseling agency; and (2) provide notice to the counseling agency of the homeowner that will be subject to the foreclosure.
Amends Minn. Stat. § 580.021, subd. 1

2. Foreclosure Advice Notice to Homeowners
Extends to judicial foreclosures the requirement to provide the foreclosure advice notice to homeowners along with the notice of foreclosure.
Amends Minn. Stat. § 580.041, subd. 1a

I. Tenant Protections

1. Rights of Tenants Living in Properties Subject to Judicial Foreclosure

a. Foreclosure Advice Notice to Tenants
Chapter 130, Section 8 (SF 1302)
Amends Minn. Stat. § 580.042, subd. 1
Effective August 1, 2009 for foreclosures in which the notice of pendency under section 580.032 or the lis pendens for a foreclosure under chapter 581 is recorded on or after that date

Extends to judicial foreclosures the requirement to provide the foreclosure advice notice to tenants along with the notice of foreclosure.

b. Notice that Property is in Foreclosure
Chapter 123, Section 3 (SF 1147)
Amends Minn. Stat. § 504B.151, subd. 1
Effective August 1, 2009 and applies to leases entered into on or after that date

Extends to judicial foreclosures the requirement that landlords provide notice to prospective tenants that the property is in foreclosure.

c. Withholding Rent
Chapter 123, Section 4 (SF 1147)
Amends Minn. Stat. § 504B.178, subd. 8
Effective August 1, 2009 and applies to cancellations of contracts for deed in which the notice of cancellation is first served or published on or after August 1, 2009, and mortgage foreclosures under chapter 581 in which the lis pendens is recorded on or after that date

Extends to judicial foreclosures the right of tenants in foreclosed properties and cancelled contract for deed transactions to withhold last month's rent.

2. Notice to Vacate
Chapter 130, Section 1 (SF 1302)
Amends Minn. Stat. § 504B.285, subd. 1
Effective August 1, 2009

Clarifies that tenants who enter into leases prior to the notice of foreclosure are entitled to the two month notice to vacate foreclosing parties are required to send before they can evict.

III. HOME WARRANTIES
Chapter 91 (HF 420)
Amends Minn. Stat. §§ 327A.04; 327A.06; 327A.07; and 327A.08
Effective August 1, 2009, and applies to contracts entered into, or construction of dwellings or home improvements completed, on or after that date

Requires vendors and contractors to provide express warranties, eliminating the existing implied warranties. Requires the warranties to be provided to the buyer in writing. Prohibits waivers, but allows post-contract modifications pursuant to existing law. Gives homeowners, by operation of law, an implied warranty with the effect of an express warranty where the vendor or contractor fails to provide an express warranty as required.

IV. MANUFACTURED HOME RELOCATION TRUST FUND
Chapter 78, Article 8, Sections 1 - 3 (HF 2088)
Amends Minn. Stat. § 327C.095, subds. 12 and 13
Adds Minn. Stat. § 327C.03, subd. 6
Effective August 1, 2009

A. Assessment and Recoupment of Park Owners for Annual Resident Payments

1. Assessment
Changes the method of collection of the statutorily required $12 annual resident payments to the fund. Eliminates the requirement that park owners collect the fee from each resident and forward it to the Department of Finance (now Minnesota Management & Budget or MMB) and eliminates MMB's obligations to post information and forms regarding the payments on its Web site. Replaces existing obligations by requiring MMB to annually assess each manufactured home park owner by mail the total amount of $12 times each licensed lot in their park, payable on or before September 15 of each year, and notify owners by July 15 of their obligation to forward the lump sum payment.
Amends Minn. Stat. § 327C.095, subd. 12

2. Recoupment
Permits park owners who have been assessed for resident payments to recoup those payments either as a lump sum or by adding no more than $1 per month to the lot rent. Requires separate itemization and clear labeling of the additional $1 as "Minnesota Manufactured Home Relocation Trust Fund" on the lot rent statement.
Adds Minn. Stat. § 327C.03, subd. 6

B. Disputes
Provides that prevailing parties are entitled to reasonable attorney fees, court costs, and disbursements where disputes regarding owner or resident payments to the fund arise and are adjudicated in court.
Amends Minn. Stat. § 327C.095, subd. 12

C. Eligibility to Access Fund
Eliminates the provision making a manufactured home park resident ineligible to access the fund if the resident has failed to make the $12 required annual payment.
Amends Minn. Stat. § 327C.095, subd. 12

V. RENTERS' CREDIT

Reduces expenditures for this program, through unallotment, by 27% or almost $51 million for 2010 for rent paid in 2009.

VI. TARGETED NEIGHBORHOOD REVITALIZATION PROGRAM
Chapter 78, Article 8, Sections 6 - 20 (HF 2088)
Amends Minn. Stat. §§ 469.201, subds 2, 4, 6, 7, 10, 11, and 12; 469.202; 469.203, subds. 1, 2, and 4; 469.204, subd. 1; 469.205; and 469.207, subd. 2
Adds Minn. Stat. § 469.204, subd. 4
Effective August 1, 2009

A. Designation of Targeted Communities
Increases the median income threshold for designation of a targeted community for the Minneapolis and St. Paul Metropolitan Statistical Area from 50% to 80%. Adds and defines a new standard: an area with a disproportionate number of vacant residential buildings and mortgage foreclosures is a qualifying factor. Requires that three of four standards must now be met for the community to be eligible for the program.
Amends Minn. Stat. § 469.202, subd. 2

B. Eligible Activities
Adds the following measures as allowable activities under the program: (1) addressing vacancies and foreclosures; (2) preserving existing housing; and (3) addressing lead abatement, energy efficiencies, or other activities related to the health of a building.
Amends Minn. Stat. § 469.201, subd. 6

C. Eligible Municipalities
Adds the following municipalities to those eligible to participate in the program: (1) a statutory or home rule charter city; (2) a town; or (3) a township.
Amends Minn. Stat. § 469.201, subd. 2

D. Financing
Establishes a Targeted Community Revitalization Revolving Fund.
Adds Minn. Stat. § 469.204, subd. 4

E. Program Name
Replaces "revitalization" with "community" in all references, effectively renaming the program the Targeted Community Revitalization Program.
Amends Minn. Stat. §§ 469.201, subds.4, 10, and 12; 469.202; 469.205; and 469.207; subd. 2

F. Requirements of Municipalities
Allows more flexibility for municipalities to meet the requirement to match state funds.
Amends Minn. Stat. § 469.203, subds. 1, 2, and 3