Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 2000, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 450-H.F.No. 3047
An act relating to real property; title insurance;
modifying mortgage release certificate language to
include assignment of rents and profits; modifying
common interest ownership resale disclosure
certificate requirements; amending Minnesota Statutes
1998, sections 507.401, subdivisions 1, 3, 6, and 7;
and 559.17, by adding a subdivision; Minnesota
Statutes 1999 Supplement, section 515B.4-107.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1998, section 507.401,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] (a) The definitions in this
subdivision apply to this section.
(b) "Assignment of rents and profits" means an assignment,
whether in a separate document or in a mortgage, of any of the
benefits accruing under a recorded or unrecorded lease or
tenancy existing, or subsequently created, on property
encumbered by a mortgage, which is given as additional security
for the debt secured by the mortgage.
(c) "Mortgage" means a mortgage or mortgage lien, including
any assignment of rents and profits given as additional security
for the debt secured by that lien, on an interest in real
property in this state given to secure a loan in the original
principal amount of $500,000 $1,500,000 or less.
(c) (d) "Mortgagee" means:
(1) the grantee of a mortgage; or
(2) if a mortgage has been assigned of record, the last
person to whom the mortgage has been assigned of record.
(d) (e) "Mortgage servicer" means the last person to whom a
mortgagor or the mortgagor's successor in interest has been
instructed by a mortgagee to send payments on a loan secured by
a mortgage. A person transmitting a payoff statement is the
mortgage servicer for the mortgage described in the payment
payoff statement.
(e) (f) "Mortgagor" means the grantor of a mortgage.
(g) "Partial release" means the release of specified
parcels of land from a mortgage.
(f) (h) "Payoff statement" means a statement of the amount
of:
(1) the unpaid balance of a loan secured by a mortgage,
including principal, interest, and any other charges properly
due under or secured by the mortgage;, and
(2) interest on a per day basis for the unpaid balance; or
(2) the portion of the unpaid balance of the loan secured
by the mortgage required by the mortgagee or mortgage servicer
to be paid as a condition for the issuance of a partial release.
(g) (i) "Record" means to record with the county recorder
or file with the registrar of titles.
(h) (j) "Title insurance company" means a corporation or
other business entity authorized and licensed to transact the
business of insuring titles to interests in real property in
this state under chapter 68A.
Sec. 2. Minnesota Statutes 1998, section 507.401,
subdivision 3, is amended to read:
Subd. 3. [CONTENTS.] A certificate of release executed
under this section must contain substantially all of the
following:
(1) the name of the mortgagor, the name of the original
mortgagee, and, if applicable, the mortgage servicer, the date
of the mortgage, the date of recording, and volume and page or
document number in the real property records where the mortgage
is recorded, together with similar information for the last
recorded assignment of the mortgage;
(2) if applicable, the date of any assignment of rents and
profits, the date of its recording, and its volume and page or
document number in the real property records where it has been
recorded or filed, together with similar information for the
last recorded assignment thereof;
(3) a statement that the mortgage was in the original
principal amount of $500,000 $1,500,000 or less;
(3) (4) a statement that the person executing the
certificate of release is an officer or a duly appointed agent
of a title insurance company authorized and licensed to transact
the business of insuring titles to interests in real property in
this state under chapter 68A;
(4) (5) a statement that the certificate of release is made
on behalf of the mortgagor or a person who acquired title from
the mortgagor to all or a part of the property described in the
mortgage;
(5) (6) a statement that the mortgagee or mortgage servicer
provided a payoff statement which was used to make full or
partial payment in full of the unpaid balance of the loan
secured by the mortgage; and
(6) (7) a statement that full or partial payment in full of
the unpaid balance of the loan secured by the mortgage was made
in accordance with the written or verbal payoff statement; and
(8) where the certificate of release affects only a portion
of the land encumbered by the mortgage, a legal description of
the portion being released.
Sec. 3. Minnesota Statutes 1998, section 507.401,
subdivision 6, is amended to read:
Subd. 6. [RECORDING.] If a mortgage is recorded in more
than one county and a certificate of release is recorded in one
of them, a certified copy of the certificate of release may be
recorded in another county with the same effect as the
original. In all cases, the certificate of release shall be
entered and indexed as satisfactions of mortgage and releases of
assignments of rents and profits are entered and indexed.
Sec. 4. Minnesota Statutes 1998, section 507.401,
subdivision 7, is amended to read:
Subd. 7. [APPLICATION.] This section applies only to a
mortgage in the original principal amount of $500,000 $1,500,000
or less.
Sec. 5. Minnesota Statutes 1999 Supplement, section
515B.4-107, is amended to read:
515B.4-107 [RESALE OF UNITS.]
(a) In the event of a resale of a unit by a unit owner
other than a declarant, unless exempt under section
515B.4-101(c), the unit owner shall furnish to a purchaser,
before execution of any purchase agreement for a unit or
otherwise before conveyance, the following documents relating to
the association or to the master association, if applicable:
(1) copies of the declaration (other than any CIC plat),
the articles of incorporation and bylaws, any rules and
regulations, and any amendments thereto;
(2) the organizational and operating documents relating to
the master association, if any; and
(3) a resale disclosure certificate from the association
dated not more than 90 days prior to the date of the purchase
agreement or the date of conveyance, whichever is earlier,
containing the information set forth in subsection (b).
(b) The resale disclosure certificate shall contain the
following information must be in substantially the following
form:
(1) a statement disclosing any right of first refusal or
other restraint on the free alienability of the unit contained
in the declaration, articles of incorporation, bylaws, rules and
regulations, or any amendment thereof;
(2) a statement setting forth:
(i) the installments of annual common expense assessments
payable with respect to the unit, and the payment schedule;
(ii) the installments of special common expense
assessments, if any, payable with respect to the unit, and the
payment schedule; and
(iii) any plan approved by the association for levying
certain common expense assessments against fewer than all the
units pursuant to section 515B.3-115, subsection (h), and the
amount and payment schedule for any such common expenses payable
with respect to the unit;
(3) a statement of any fees or charges other than
assessments payable by unit owners;
(4) a statement of any extraordinary expenditures approved
by the association, and not yet assessed, for the current and
two succeeding fiscal years;
(5) a statement of the amount of any reserves for
maintenance, repair or replacement and of any portions of those
reserves designated by the association for any specified
projects or uses;
(6) the most recent regularly prepared balance sheet and
income and expense statement of the association;
(7) the current budget of the association;
(8) a statement of any unsatisfied judgments against the
association and the status of any pending suits in which the
association is party;
(9) a detailed description of the insurance coverage
provided for the benefit of unit owners, including a statement
as to which, if any, of the items referred to in section
515B.3-113, subsection (b), are insured by the association;
(10) a statement as to whether the board has notified the
unit owner (i) that any alterations or improvements to the unit
or to the limited common elements assigned thereto violate any
provision of the declaration or (ii) that the unit is in
violation of any governmental statute, ordinance, code or
regulation;
(11) a statement of the remaining term of any leasehold
estate affecting the common interest community and the
provisions governing any extension or renewal thereof; and
(12) any other matters affecting the unit or the unit
owner's obligations with respect to the unit which the
association deems material.
COMMON INTEREST COMMUNITY
RESALE DISCLOSURE CERTIFICATE
Name of Common Interest Community:..............................
Name of Association:............................................
Address of Association:.........................................
Unit Number(s) (include principal unit and any garage, storage,
or other auxiliary unit(s)):.....................................
The following information is furnished by the association
named above according to Minnesota Statutes, section 515B.4-107.
1. There is no right of first refusal or other restraint
on the free alienability of the above unit(s) contained in the
declaration, bylaws, rules and regulations, or any amendment to
them, except as follows:........................................
................................................................
................................................................
................................................................
2. The following periodic installments of common expense
assessments and special assessments are payable with respect to
the above unit(s):
a. Annual assessment
installments: $....... Due: .............
b. Special assessment
installments: $....... Due: .............
c. Unpaid assessments, fines, or other charges:
(1) Annual $.......
(2) Special $.......
(3) Fines $.......
(4) Other Charges $.......
d. The association has/has not (strike one) approved
a plan for levying certain common expense
assessments against fewer than all the units
according to Minnesota Statutes, section 515B.3-115,
subsection (e). If a plan is approved, a description
of the plan is attached to this certificate.
3. In addition to the amounts due under paragraph 2, the
following additional fees or charges other than assessments are
payable by unit owners (include late payment charges, user fees,
etc.):..........................................................
................................................................
................................................................
4. There are no extraordinary expenditures approved by the
association, and not yet assessed, for the current and two
succeeding fiscal years, except as follows:.....................
................................................................
................................................................
5. The association has reserved the following amounts for
maintenance, repair, or replacement:............................
................................................................
................................................................
The following portions of these reserves are designated for the
following specified projects or uses:...........................
................................................................
6. The following documents are furnished with this
certificate according to statute:
a. The most recent regularly prepared balance sheet and
income and expense statement of the association.
b. The current budget of the association.
7. There are no unsatisfied judgments against the
association, except as follows (identify creditor and amount):..
................................................................
................................................................
8. There are no pending lawsuits to which the association
is a party, except as follows (identify and summarize status):..
................................................................
................................................................
................................................................
9. Description of insurance coverages:
a. The association provides the following insurance
coverage for the benefit of unit owners: (Reference may be made
to applicable sections of the declaration or bylaws; however,
any additional coverages should be described in this space)
................................................................
................................................................
................................................................
b. The following described fixtures, decorating items, or
construction items within the unit referred to in Minnesota
Statutes, section 515B.3-113, subsection (b), are insured by the
association (check as applicable):
..._____Ceiling or wall finishing materials
..._____Floor coverings
..._____Cabinetry
..._____Finished millwork
..._____Electrical or plumbing fixtures serving a single unit
..._____Built-in appliances
..._____Improvements and betterments as originally constructed
..._____Additional improvements and betterments installed by
unit owners
10. The board of directors of the association has not
notified the unit owner (i) that any alterations or improvements
to the unit or to the limited common elements assigned to it
violate any provision of the declaration; or (ii) that the unit
is in violation of any governmental statute, ordinance, code, or
regulation, except as follows:...................................
.................................................................
11. The remaining term of any leasehold estate affecting
the common interest community and the premises governing any
extension or renewal of it are as follows:......................
................................................................
................................................................
12. In addition to the above, the following matters
affecting the unit or the unit owner's obligations with respect
to the unit are deemed material.
I hereby certify that the foregoing information and
statements are true and correct as of .............
(Date)
By: .......................
Title: .....................
(Association representative)
Address:....................
Phone Number:...............
RECEIPT
In addition to the foregoing information furnished by the
association, the unit owner is obligated to furnish to the
purchaser before execution of any purchase agreement for a unit
or otherwise before conveyance, copies of the following
documents relating to the association or to the master
association (as applicable): the declaration (other than any
common interest community plat), articles of incorporation,
bylaws, rules and regulations (if any), and any amendments to
these documents. Receipt of the foregoing documents, and the
resale disclosure certificate, is acknowledged by the
undersigned buyer(s).
Dated: ............ .........................
(Buyer)
.........................
(Buyer)
(c) If the association is subject to a master association
to which has been delegated the association's powers under
section 515B.3-102(a)(2), then the financial information
required to be disclosed under subsection (b) may be disclosed
on a consolidated basis.
(d) The association, within ten days after a request by a
unit owner, or the unit owner's authorized representative, shall
furnish the certificate required in subsection (a). The
association may charge a reasonable fee for furnishing the
certificate and any association documents related thereto. A
unit owner providing a certificate pursuant to subsection (a) is
not liable to the purchaser for any erroneous information
provided by the association and included in the certificate.
(e) A purchaser is not liable for any unpaid common expense
assessments, including special assessments, if any, not set
forth in the certificate required in subsection (a). A
purchaser is not liable for the amount by which the annual or
special assessments exceed the amount of annual or special
assessments stated in the certificate for assessments payable in
the year in which the certificate was given, except to the
extent of any increases subsequently approved in accordance with
the declaration or bylaws. A unit owner is not liable to a
purchaser for the failure of the association to provide the
certificate, or a delay by the association in providing the
certificate in a timely manner.
Sec. 6. Minnesota Statutes 1998, section 559.17, is
amended by adding a subdivision to read:
Subd. 3. [SATISFACTION, RELEASE, AND ASSIGNMENT.] (a) An
assignment of rents and profits under this section, whether in
the mortgage or in a separate instrument, shall expire:
(1) with respect to the rents and profits from all of the
mortgaged property, upon recording in the office of the county
recorder or filing in the office of the registrar of titles of
the county where the mortgaged property is located, of a
satisfaction of the mortgage or a certificate of release
complying with section 507.401 in lieu of a satisfaction of the
mortgage; or
(2) with respect to the rents and profits from a portion of
the mortgaged property, upon recording in the office of the
county recorder or filing in the office of the registrar of
titles of the county where that portion of the mortgaged
property is located, of a release of that portion of the
mortgaged property from the lien of the mortgage, or a
certificate of release complying with section 507.401 in lieu of
a release of that portion of the mortgaged property.
No separate reassignment of the rents and profits or
satisfaction or release of the assignment is required.
(b) An assignment of a mortgage, whether or not the
mortgage mentions an assignment of rents and profits, is
sufficient to assign both the mortgage and the assignment of
rents and profits permitted by this subdivision which secures
the debt secured by the mortgage, and no separate assignment of
the assignment of rents and profits shall be required.
Sec. 7. [APPLICATION.]
Sections 1, 2, 3, 4, and 6 apply to all mortgages and
assignments of rents and profits, whenever executed, except as
to those mortgages and assignments of rents and profits, the
rights to which have been fully adjudicated or which are the
subject of pending litigation as of the effective date of this
act.
Presented to the governor April 27, 2000
Signed by the governor May 1, 2000, 2:47 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes