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

I. AFFORDABLE HOUSING IN COMPREHENSIVE PLANS
Chapter 347, Article 1, Section 24 (SF 2510)
Adds Minn. Stat. § 462.355, subd. 3
Effective August 1, 2010

Provides that passage of amendments to a municipal comprehensive plan permitting affordable housing development requires only a simple majority. (Note: Other resolutions to amend or adopt a comprehensive plan require a two-thirds vote.)

II. CONTRACTS FOR DEED (TECHNICAL CORRECTIONS)
Chapter 233, Section 1 (HF 2823)
Amends Minn. Stat. § 507.235, subd. 1a
Effective for contracts for deed acknowledged on or after April 16, 2010

Removes an incorrect reference in the definitions of "contract for deed" and "residential real property," redefining the terms as follows:

• "Contract for deed" means an executory contract for the conveyance of residential real property under which the seller provides financing for the purchase of the residential real property and under which the purchaser does or has a right to go into possession. Contract for deed does not include: (i) a purchase agreement; (ii) an earnest money contract; (iii) an exercised option or a lease, including a lease with an option to purchase; or (iv) a mortgage, as defined in section 287.01; and
• "Residential real property" means real property occupied, or intended to be occupied, by one to four families, if the purchaser intends to occupy the real property. Residential real property does not include property subject to a family farm security loan or a transaction subject to sections 583.20 to 583.32 (i.e., the Farmer-Lender Mediation Program).

III. CONVEYANCES OF STATE LAND TO TRIBAL GOVERNMENTS
Chapter 226 (HF 2956)
Amends Minn. Stat. § 161.44, subd. 1
Effective April 11, 2010

Permits the Minnesota Department of Transportation to convey and quitclaim to Indian tribal governments any lands (or portions of lands) owned in fee by the state for trunk highway purposes (including those on which improvements were made) if the lands are no longer needed for those purposes.

IV. FORECLOSURE LAW

A. Equity Stripping Protections
Chapter 375, Section 11 (SF 2430)
Amends Minn. Stat. § 580.06, subd. 1
Adds Minn. Stat. § 580.06, subds. 2 and 3
Effective for sheriff's sales conducted on or after August 1, 2010, and expires on December 31, 2012

1. New Notice to Mortgagor
Requires, with certain exceptions, any person attempting to acquire fee title to the mortgagor's property directly from the mortgagor after the sheriff's sale but before the end of the redemption period to provide a notice to the mortgagor that:

• contains: (i) the date the sale occurred; (ii) the identity of the purchaser and any assignees of the purchaser; and (iii) the sheriff's sale price;
• contains a verbatim statement included in the statute: (i) describing the redemption process; (ii) noting that the property may have been sold (and thus may be redeemed) at less than the amount remaining on the mortgage; and (iii) providing information on where to obtain foreclosure prevention counseling; and
• is personally delivered three days prior to entering into an agreement with the mortgagor to acquire title.
  Adds Minn. Stat. § 580.06, subd. 2

2. Exceptions
Exempts the following transactions and persons from the new requirement: (1) a transaction in which either party is represented by a licensed real estate agent; (2) a transaction in which the sale price is equal to or greater than the sheriff's sale price; (3) a deed in lieu of foreclosure transaction; (4) a nonprofit lender holding a certificate of exemption from DOC; or (5) the state or a local government or its agent.
Adds Minn. Stat. § 580.06, subd. 2

3. Private Right of Action
Makes a person who violates the notice requirement liable to an aggrieved mortgagor for the sum of: (1) actual, incidental, and consequential damages; (2) $1,000 statutory damages; and (3) costs, disbursements, and reasonable attorney fees. Establishes a rebuttable presumption of compliance if an affidavit stating that the mortgagor received the required notice has been recorded with the county recorder or registrar of titles.
Adds Minn. Stat. § 580.06, subd. 3

B. Notice of Redemption Rights
Chapter 375, Sections 9 and 10 (SF 2430)
Amends Minn. Stat. §§ 580.03; and 580.041, subd. 2
Adds Minn. Stat. § 580.041, subd. 1c
Effective for foreclosure notices delivered on or after August 1, 2010

Requires that foreclosing parties include a new "Notice of Redemption Rights" along with the notice of foreclosure (currently required under Minn. Stat. §§ 580.03 and 580.04) and the "Foreclosure Advice Notice" (currently required under Minn. Stat. § 580.041). Requires the new notice to be: (1) in 14-point boldface type; and (2) printed on colored paper different from the color of the notice of foreclosure and the foreclosure advice notice. Provides that the Notice of Redemption Rights must: (1) explain what occurs after the foreclosure sale; (2) inform the mortgagor how to obtain information about the results of the sale; (3) warn the mortgagor to be wary of scams; and (4) provide referral information to foreclosure prevention counselors.
Amends Minn. Stat. § 580.041, subd. 2 (Content of notice)
Adds Minn. Stat. § 580.041, subd. 1c (Form of notice)

C. Postponement of Sheriff's Sale
Chapter 237 (SF 2559)
Amends Minn. Stat. § 580.07, subds. 2 and 3
Effective for foreclosure sales scheduled to occur on or after May 15, 2010

Permits mortgagors subject to a 12-month redemption period the right to postpone the sale for 11 months (effectively extending the reinstatement period), extending the 2009 legislation that permitted homeowners in foreclosure subject to a six-month redemption period the right to postpone the sheriff's sale for five months.

V. MINNESOTA APPRAISAL MANAGEMENT COMPANY LICENSING AND REGULATION ACT
Chapter 347, Article 6, Sections 9 - 24 (SF 2510)
Adds Chapter 82C, specifically Minn. Stat. §§ 82C.01 - .16
Effective August 1, 2010

Covers third party entities that: (1) arrange appraisal services and; (2) are unrelated to the mortgage transaction, the clients, or the lenders. Creates a regulatory framework that, among other things: (1) requires appraisal management companies to obtain a license from DOC; and (2) prohibits appraisal management company employees, directors, officers, or agents from influencing or attempting to influence the development, reporting, or review of an appraisal through coercion, extortion, collusion, compensation, inducement, intimidation, or bribery.

VI. RENTERS' CREDIT
First Special Session, Chapter 1, Article 13, Section 4 (HF 1)
Effective May 22, 2010 for calendar year 2009 only, but also applicable to credits based on property taxes payable in 2010 that include gross rents paid in 2009

Makes a one-time reduction to the credit by changing the percentage on which it is based from 19% to 15% of rent constituting property taxes.

VII. VALID INSTRUMENTS SECURING A DEBT
Chapter 211 (HF 2828)
Amends Minn. Stat. § 287.03
Effective for any instrument executed or recorded before, on, or after July 1, 2010, but is ineffective with respect to any action, case, or proceeding commenced before July 1, 2010, provided a notice of lis pendens of the action is recorded with the county recorder or registrar of titles before July 1, 2010

Clarifies that an instrument relating to real property, other than a decree of marriage dissolution or an instrument made pursuant to it, may be enforced as security for any other kind of debt only if the instrument expressly provides for such enforcement. Provides that, to the extent the instrument relating to real estate provides for security of another debt, it may be enforced only for the portion (which may be the entirety) of the other debt that is initially known and expressed in the instrument securing the real property.