Minnesota 2023-2024 Regular Session

Minnesota House Bill HF685 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		1.1 A bill for an act
2	2		1.2 relating to housing; restricting residential rentals by corporate home owners;
3		-	1.3 establishing a statewide landlord database; proposing coding for new law in
4		-	1.4 Minnesota Statutes, chapters 462A; 500; 504B.
5		-	1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
6		-	1.6 Section 1. [462A.45] STATEWIDE LANDLORD DATABASE.
7		-	1.7 Subdivision 1.Definitions.(a) For the purposes of this section, the terms defined in this
8		-	1.8subdivision have the meanings given.
9		-	1.9 (b) "Landlord" has the meaning given in section 504B.001, subdivision 7.
10		-	1.10 (c) "Residential building" has the meaning given in section 504B.001, subdivision 11.
11		-	1.11 (d) "Tenant" has the meaning given to "residential tenant" in section 504B.001,
12		-	1.12subdivision 12.
13		-	1.13 Subd. 2.Statewide landlord database.The commissioner of the Housing Finance
14		-	1.14Agency, in consultation with the secretary of state and the Department of Commerce, shall
15		-	1.15create a statewide landlord database that collects and retains the information required in
16		-	1.16this section. The agency must not charge a fee to a landlord for annually submitting
17		-	1.17information to the database. Access to the database must be at no cost and the information
18		-	1.18submitted must be accessible to the public through a public website that can be searched
19		-	1.19by a public user. The database must allow tenants and prospective tenants to report rental
20		-	1.20units or landlords who cannot be found in the database.
	3	+	1.3 proposing coding for new law in Minnesota Statutes, chapter 500.
	4	+	1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
	5	+	1.5 Section 1. [500.35] SINGLE-FAMILY HOME RENTALS; CORPORATE
	6	+	1.6RESTRICTIONS.
	7	+	1.7 Subdivision 1.Definitions.(a) For purposes of this section, the following terms have
	8	+	1.8the meanings given.
	9	+	1.9 (b) "Corporate owner" includes any person, partnership, company, corporation, or
	10	+	1.10organization. Corporate owner does not include an individual who is a natural person, a
	11	+	1.11married couple, or a trust for the benefit of a natural person, married couple, or a trust where
	12	+	1.12the majority of the beneficiaries are related by law.
	13	+	1.13 (c) "Residential tenant" has the meaning given in section 504B.001, subdivision 12.
	14	+	1.14 Subd. 2.Single-family home rentals restricted.(a) The owner of a single-family home
	15	+	1.15is prohibited from renting the home out to a residential tenant when:
	16	+	1.16 (1) the owner has a property interest in ten or more single-family nonhomestead properties
	17	+	1.17that have a current residential tenant, or are available for rent or have been rented within
	18	+	1.18the last 12 months by a residential tenant; and
	19	+	1.19 (2) the owner is not a named exception to this restriction under subdivision 3.
21	20		1Section 1.
22		-	REVISOR JSK H0685-2HF685 ~~SECOND~~ ENGROSSMENT
	21	+	REVISOR JSK H0685-1HF685 FIRST ENGROSSMENT
23	22		State of Minnesota
24	23		This Document can be made available
25	24		in alternative formats upon request
26	25		HOUSE OF REPRESENTATIVES
27	26		H. F. No. 685
28	27		NINETY-THIRD SESSION
29	28		Authored by Agbaje, Howard, Norris, Reyer, Hassan and others01/23/2023
30	29		The bill was read for the first time and referred to the Committee on Housing Finance and Policy
31	30		Adoption of Report: Re-referred to the Committee on Judiciary Finance and Civil Law02/02/2023
32	31		By motion, recalled and re-referred to the Committee on Housing Finance and Policy02/13/2024
33		-	Adoption of Report: Amended and re-referred to the Committee on Judiciary Finance and Civil Law03/11/2024
34		-	Adoption of Report: Amended and re-referred to the Committee on Housing Finance and Policy04/11/2024
35		-	Pursuant to Joint Rule 2.03, re-referred to the Committee on Rules and Legislative Administration 2.1 Subd. 3.Landlord database; annual submissions.(a) Before renting a rental unit in
36		-	2.2a residential building in the state or within 30 days of renting a rental unit in the state, a
37		-	2.3landlord must provide the following information to the statewide landlord database:
38		-	2.4 (1) the complete legal names of the owners of the residential building where the rental
39		-	2.5property is located and, if the property is owned by a company or group of investors, the
40		-	2.6complete legal names of each natural person who has an economic interest in the residential
41		-	2.7building;
42		-	2.8 (2) the business address of each natural person who owns an interest in the property;
43		-	2.9 (3) the name, address, and contact information for the landlord or manager of the property;
44		-	2.10 (4) the rent for each residential rental unit on the first day that the property is rented or
45		-	2.11on January 1 of the year of the filing for a renewal; and
46		-	2.12 (5) if the rental unit or the residential building has a rental license, the date of issue,
47		-	2.13expiration, and jurisdiction issuing the license.
48		-	2.14 (b) A landlord must annually update a submission for each rental unit or residential
49		-	2.15building that the landlord is renting by February 1 or, if a unit is vacant, before or during
50		-	2.16the first 30 days that the rental unit is occupied.
51		-	2.17 (c) A landlord who fails to comply with this subdivision is subject to penalties under
52		-	2.18subdivision 4.
53		-	2.19 Subd. 4.Enforcement.(a) A tenant who is unable to locate a property or property owner
54		-	2.20in the statewide landlord database shall notify the Housing Finance Agency that the landlord
55		-	2.21or unit could not be found, and the tenant must provide their contact information, the unit
56		-	2.22address, and the contact information for the landlord. The Housing Finance Agency must
57		-	2.23send a letter to the landlord with information on the database and notice that the landlord
58		-	2.24must provide the landlord's annual submission to the database within 30 days of the date
59		-	2.25that the landlord received notice of the letter. The Housing Finance Agency must send the
60		-	2.26tenant a copy of the letter. An enforcement action under paragraph (b) may not be brought
61		-	2.27until 31 days after the date of the letter sent under this paragraph.
62		-	2.28 (b) The attorney general may enforce this section. The court may award a civil penalty
63		-	2.29of up to $5,000 if the court finds that the landlord has repeated knowing and willful violations
64		-	2.30of this section.
	32	+	Adoption of Report: Amended and re-referred to the Committee on Judiciary Finance and Civil Law03/11/2024 2.1 (b) "Homestead" has the meaning given in chapter 273. A property that is classified as
	33	+	2.2class 1a under section 273.13, subdivision 22, is an exempt property and should not be
	34	+	2.3counted as a property under paragraph (a), clause (1).
	35	+	2.4 Subd. 3.Exceptions; exemptions.(a) The owner of a single-family home is exempt
	36	+	2.5from the residential rental restriction in subdivision 1, if the owner is:
	37	+	2.6 (1) a local, state, or federal unit of government, including a state or federal agency;
	38	+	2.7 (2) a land trust as defined by section 462A.31;
	39	+	2.8 (3) a nonprofit as defined by chapter 317A;
	40	+	2.9 (4) a corporation primarily engaged in housing development through the construction
	41	+	2.10and rehabilitation of single-family residences; or
	42	+	2.11 (5) a mortgage note holder that owns the single-family residences through foreclosure.
	43	+	2.12 (b) If a person who is renting a single-family home as a short-term rental for less than
	44	+	2.1330 days and is in compliance with any state and local regulations governing short-term
	45	+	2.14rentals, then that home is not considered a residential tenancy for the purposes of this section.
	46	+	2.15 (c) A corporate owner may apply for an exemption from subdivision 2 with the
	47	+	2.16commissioner of the Housing Finance Agency. The commissioner may issue an exemption
	48	+	2.17if the exemption to the corporate owner would not have an impact upon the availability of
	49	+	2.18affordable housing. The commissioner shall have 60 days from the time an application for
	50	+	2.19exemption is filed to determine if the exemption shall be granted. The corporate owner may
	51	+	2.20make a request for reconsideration if the application has been denied and the commissioner
	52	+	2.21or their appointee must meet with the corporate owner within ten days of the request for
	53	+	2.22reconsideration and make a determination on that request within 20 days of the request. The
	54	+	2.23commissioner shall review annually each corporate owner that is issued an exemption under
	55	+	2.24this paragraph to ensure that owner continues to meet the criteria. If a corporate owner fails
	56	+	2.25to meet the criteria, the commissioner shall withdraw the exemption and the corporate owner
	57	+	2.26is subject to enforcement proceedings under subdivision 4. The commissioner shall submit
	58	+	2.27a report with a list of each corporate owner that is issued an exemption under this paragraph
	59	+	2.28to the chairs and ranking minority members of the senate and house of representatives
	60	+	2.29housing policy committees by October 1 of each year.
	61	+	2.30 Subd. 4.Enforcement.(a) If the attorney general or a local government has reason to
	62	+	2.31believe that a corporate owner has violated this section, or has taken substantial steps to
	63	+	2.32purchase real property with the intent to rent that property in violation of subdivision 2,
	64	+	2.33then the attorney general shall commence an action in the district court in which any real
65	65		2Section 1.
66		-	REVISOR JSK H0685-2HF685 SECOND ENGROSSMENT 3.1 Sec. 2. [500.35] SINGLE-FAMILY HOME RENTALS; CORPORATE
67		-	3.2RESTRICTIONS.
68		-	3.3 Subdivision 1.Definitions.(a) For purposes of this section, the following terms have
69		-	3.4the meanings given.
70		-	3.5 (b) "Corporate owner" includes any person, partnership, company, corporation, or
71		-	3.6organization. Corporate owner does not include an individual who is a natural person, a
72		-	3.7married couple, or a trust for the benefit of a natural person, married couple, or a trust where
73		-	3.8the majority of the beneficiaries are related by law.
74		-	3.9 (c) "Residential tenant" has the meaning given in section 504B.001, subdivision 12.
75		-	3.10 Subd. 2.Single-family home rentals restricted.(a) The corporate owner of a
76		-	3.11single-family home is prohibited from renting the home out to a residential tenant when:
77		-	3.12 (1) the owner has a property interest in ten or more single-family nonhomestead properties
78		-	3.13that have a current residential tenant, or are available for rent or have been rented within
79		-	3.14the last 12 months by a residential tenant; and
80		-	3.15 (2) the owner is not a named exception to this restriction under subdivision 3.
81		-	3.16 (b) The individual owner of a single-family home is prohibited from renting the home
82		-	3.17to a residential tenant when the owner has a property interest in 20 or more single-family
83		-	3.18nonhomestead properties that have a current residential tenant, or are available for rent or
84		-	3.19have been rented within the last 12 months by a residential tenant and the owner is not a
85		-	3.20named exception to this restriction under subdivision 3.
86		-	3.21 (c) For the purposes of this section, a "single-family home" is a single home and does
87		-	3.22not include a duplex, triplex, or fourplex.
88		-	3.23 (d) "Homestead" has the meaning given in chapter 273. A property that is classified as
89		-	3.24class 1a under section 273.13, subdivision 22, is an exempt property and should not be
90		-	3.25counted as a property under paragraph (a), clause (1).
91		-	3.26 Subd. 3.Exceptions; exemptions.(a) The owner or corporate owner of a single-family
92		-	3.27home is exempt from the residential rental restriction in subdivision 2, if the owner is:
93		-	3.28 (1) a local, state, or federal unit of government, including a state or federal agency;
94		-	3.29 (2) a land trust as defined by section 462A.31;
95		-	3.30 (3) a nonprofit as defined by chapter 317A;
96		-	3.31 (4) the owner of a home licensed under chapter 245D;
97		-	3Sec. 2.
98		-	REVISOR JSK H0685-2HF685 SECOND ENGROSSMENT 4.1 (5) an employer and the home is a home rented by the employer to an employee;
99		-	4.2 (6) a corporation primarily engaged in housing development through the construction
100		-	4.3and rehabilitation of single-family residences; or
101		-	4.4 (7) a sheriff certificate mortgage note holder that owns the single-family residences
102		-	4.5through foreclosure.
103		-	4.6 (b) If a person who is renting a single-family home as a short-term rental for less than
104		-	4.730 days and is in compliance with any state and local regulations governing short-term
105		-	4.8rentals, then that home is not considered a residential tenancy for the purposes of this section.
106		-	4.9 (c) An owner or a corporate owner may apply for an exemption from subdivision 2 with
107		-	4.10the commissioner of the Housing Finance Agency. The commissioner may issue an
108		-	4.11exemption if (1) the exemption to the corporate owner would not have an impact upon the
109		-	4.12availability of affordable housing, and (2) the exemption does not limit the supply of
110		-	4.13affordable, safe single-family homes available to purchasers who plan to be owner-occupants.
111		-	4.14The commissioner shall have 60 days from the time an application for exemption is filed
112		-	4.15to determine if the exemption shall be granted. The corporate owner may make a request
113		-	4.16for reconsideration if the application has been denied and the commissioner or their appointee
114		-	4.17must meet with the corporate owner within ten days of the request for reconsideration and
115		-	4.18make a determination on that request within 20 days of the request. The agency may charge
116		-	4.19a reasonable fee to process applications for exemptions and renewals of exemptions under
117		-	4.20this section. Each corporate owner that is issued an exemption under this section must file
118		-	4.21an annual request to continue the exemption. The agency shall grant the request if the
119		-	4.22applicant continues to meet the criteria. If a corporate owner fails to meet the criteria, the
120		-	4.23commissioner shall withdraw the exemption and the corporate owner is subject to
121		-	4.24enforcement proceedings under subdivision 4.
122		-	4.25 (d) The commissioner shall submit a report with a list of each corporate owner that is
123		-	4.26issued an exemption under this paragraph to the chairs and ranking minority members of
124		-	4.27the senate and house of representatives housing policy committees by October 1 of each
125		-	4.28year.
126		-	4.29 Subd. 4.Enforcement.(a) If the attorney general or a local government has reason to
127		-	4.30believe that a corporate owner has violated this section, or has taken substantial steps to
128		-	4.31purchase real property with the intent to rent that property in violation of subdivision 2,
129		-	4.32then the attorney general shall commence an action in the district court in which any real
130		-	4.33property related to the violation is situated.
131		-	4Sec. 2.
132		-	REVISOR JSK H0685-2HF685 SECOND ENGROSSMENT 5.1 (b) If the court finds that the business entity violated subdivision 2, it shall award a
133		-	5.2$100,000 civil fine for each single-family home rented in excess of the amount allowed
134		-	5.3under this section, as well as court costs and attorney fees. Civil fines collected pursuant to
135		-	5.4this section shall be deposited in the workforce and affordable homeownership development
136		-	5.5program.
137		-	5.6 (c) The parties may agree to a settlement that allows the sale of an earlier acquired rental
138		-	5.7property owned by a corporate owner in violation of this section.
139		-	5.8 EFFECTIVE DATE.This section is effective August 1, 2024. Corporate owners who
140		-	5.9own more than ten residential rental properties shall have two years to divest of properties
141		-	5.10in violation of this section from the date of enactment.
142		-	5.11 Sec. 3. [504B.112] OWNERSHIP DISCLOSURE.
143		-	5.12 A landlord must disclose to a tenant in writing the name and contact information for all
144		-	5.13parties with any interest in the real property subject to the lease.
145		-	5Sec. 3.
146		-	REVISOR JSK H0685-2HF685 SECOND ENGROSSMENT
	66	+	REVISOR JSK H0685-1HF685 FIRST ENGROSSMENT 3.1property related to the violation is situated. The attorney general or local government shall
	67	+	3.2file for record with the county recorder or the registrar of titles of each county in which any
	68	+	3.3portion of said property is located a notice of the pendency of the action as provided in
	69	+	3.4section 557.02.
	70	+	3.5 (b) If the court finds that the business entity violated subdivision 2, it shall enter an order
	71	+	3.6for injunctive relief, declaratory relief, damages, and when reasonable, court costs and
	72	+	3.7attorney fees.
	73	+	3.8 (c) The parties may agree to a settlement that allows the sale of an earlier acquired rental
	74	+	3.9property owned by a corporate owner in violation of this section and the agreement shall
	75	+	3.10require the corporate owner to follow the divestment requirements of this section including
	76	+	3.11the opportunity to purchase requirements in subdivision 5.
	77	+	3.12 (d) A corporate owner found to have violated this section by a court must first provide
	78	+	3.13notice of sale to the current renters and an opportunity to purchase consistent with subdivision
	79	+	3.145. The corporate owners shall have one year from the date of the entry of judgment to divest
	80	+	3.15itself of the property unless a purchase agreement with the renters is in place. The business
	81	+	3.16entity must cease the rental of the real property within one year of the entry of judgment
	82	+	3.17unless the tenant's lease at the time of the entry for judgment provides for a longer rental
	83	+	3.18period, the rental period is extended to prevent hardship to the tenant, or there is a purchase
	84	+	3.19agreement with the current renter under subdivision 5 in place. In no instance shall the real
	85	+	3.20property be rented more than two years after the entry of judgment.
	86	+	3.21 (e) If the real property is not divested as required within the time prescribed, then the
	87	+	3.22attorney general or local government may begin a condemnation proceeding on the real
	88	+	3.23property consistent with chapter 117. Real property subject to a civil action under this section
	89	+	3.24must be sold to an owner who will occupy the home consistent with the law in this section.
	90	+	3.25If a corporate owner failed to provide the current tenant of the property with an opportunity
	91	+	3.26to purchase under subdivision 5, the attorney general shall follow the requirements of
	92	+	3.27subdivision 5 prior to a sale under chapter 117.
	93	+	3.28 Subd. 5.Divestment purchase option.(a) No corporate owner may accept any offer
	94	+	3.29for the sale, lease, or transfer of a property found to be in violation of this section without
	95	+	3.30first giving 60 days' written notice by certified mail, return receipt requested, of the proposed
	96	+	3.31sale to each resident of the single-family home. The corporate owner must in good faith
	97	+	3.32consider the offer of a residential tenant prior to listing the property for sale.
	98	+	3Section 1.
	99	+	REVISOR JSK H0685-1HF685 FIRST ENGROSSMENT 4.1 (b) The notice required under this subdivision must be dated and indicate the price,
	100	+	4.2terms, and conditions of an acceptable offer to sell, lease, or transfer the single-family home.
	101	+	4.3The notice must include the following verbatim statement:
	102	+	4.4 "The owner is required to sell this home consistent with Minnesota Statutes, section
	103	+	4.5500.35. The price, terms, and conditions of the offer are listed below. The owner will consider
	104	+	4.6in good faith any offer submitted within 60 days of the date of this notice by a resident
	105	+	4.7before listing the property for sale to the public. The owner will negotiate in good faith with
	106	+	4.8any residents of the property. [List of price, terms, and conditions.]"
	107	+	4.9 (c) Nothing in this section prevents a residential tenant from making an offer on the
	108	+	4.10property or purchasing the home after the home has been listed for sale to the public.
	109	+	4.11 EFFECTIVE DATE.This section is effective August 1, 2024. Corporate owners who
	110	+	4.12own more than ten residential rental properties shall have two years to divest of properties
	111	+	4.13in violation of this section from the date of enactment.
	112	+	4Section 1.
	113	+	REVISOR JSK H0685-1HF685 FIRST ENGROSSMENT