1.1 A bill for an act
1.2 relating to real property; providing for mortgage foreclosure redemption and
1.3 surpluses; amending Minnesota Statutes 2024, sections 272.45; 580.10; 580.225;
1.4 580.24; 580.25; 580.26; 580.28; 582.03, subdivisions 1, 2; 582.043, subdivision
1.5 6.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2024, section 272.45, is amended to read:
1.8 272.45 TAXES PAID BY TENANT, OCCUPANT, OR OTHER PERSON BECOME
1.9LIEN, UPON NOTICE FILED WITH COUNTY RECORDER OR REGISTRAR OF
1.10TITLES.
1.11 When any past due or delinquent tax on land is paid by any occupant, tenant, or person
1.12with an a legal or equitable interest in the land other than a lien, or a person acting on that
1.13person's behalf, which, by agreement or otherwise, ought to have been paid by the owner,
1.14lessor, or other party in interest, such occupant, tenant, or person may recover by action the
1.15amount which such owner, lessor, or party in interest ought to have paid, with interest
1.16thereon at the rate of 12 percent per annum, or may retain the same from any rent due or
1.17accruing from the person to such owner or lessor for land on which such tax is so paid. A
1.18person making a payment under this section may file with the county recorder or registrar
1.19of titles of the proper county a notice sworn statement stating the amount and date of such
1.20payment, with a copy of the receipt attached, and stating the legal or equitable interest
1.21claimed in the land, with a description of the land against which the taxes were charged;
1.22and the same shall thereupon be a lien as of the date of recording of the sworn statement
1.23upon such land in favor of the person paying the same until the same is paid. The county
1.24recorder shall record such notice sworn statement in the indices maintained by the county
1Section 1.
REVISOR JSK H1027-1HF1027 FIRST ENGROSSMENT
116
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Page No.State of Minnesota
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HOUSE OF REPRESENTATIVES
H. F. No. 1027
NINETY-FOURTH SESSION
Authored by West and Feist02/17/2025
The bill was read for the first time and referred to the Committee on Judiciary Finance and Civil Law
Adoption of Report: Placed on the General Register as Amended04/01/2025
Read for the Second Time 2.1recorder. The registrar of titles shall record the notice sworn statement on the certificate of
2.2title for the land. Upon the payment of any such lien, the person filing such notice sworn
2.3statement shall satisfy the same of record.
2.4 Sec. 2. Minnesota Statutes 2024, section 580.10, is amended to read:
2.5 580.10 SURPLUS.
2.6 Subdivision 1.Demand for surplus.In all cases not provided for in section 580.09, and
2.7except as required by subdivision 3, if, after sale of any real estate, made as herein prescribed,
2.8there remains in the hands of the officer making the sale any surplus money, after satisfying
2.9the mortgage, with interest, taxes paid, and costs of sale, the surplus shall be paid over by
2.10such officer, on demand, to the mortgagor, the mortgagor's legal representatives or assigns.
2.11Any surplus of $100 or greater shall be held by the sheriff for the duration of the time
2.12allowed for redemption under section 580.23 or 582.032, whichever is applicable, and if
2.13requested by the owner, applied toward a redemption as described in subdivision 3. If there
2.14is no redemption under section 580.23 or 582.032, a surplus of $100 or greater shall be paid
2.15first to junior creditors with liens of record at the time of the sheriff's sale in order of priority,
2.16if demanded by a junior creditor within the time allowed for redemption under section
2.17580.23 or 582.032, whichever is applicable, and thereafter to the owner of record at the time
2.18of the sheriff's sale, or as provided by court order under section 580.28. A demand by a
2.19party other than the owner shall be accompanied by an affidavit stating the amount remaining
2.20unpaid and the interest creating a right to the surplus.
2.21 Subd. 2.Notice of surplus.When there is a surplus of $100 or greater, the sheriff shall
2.22notify the owner by mail sent to the property address, or if no street address is assigned for
2.23the property on the property tax statement, to the taxpayer's address on the property tax
2.24statement, that a surplus exists and to call the sheriff's office for more information about
2.25the surplus and how to make a claim to the surplus. The notice shall also include contact
2.26information for the Minnesota Homeownership Center and a statement to call the Minnesota
2.27Homeownership Center for information about redemption and surplus.
2.28 Subd. 3.Request by owner to have surplus applied.At any time during the owner's
2.29redemption period, the owner of record at the time of the sheriff's sale may submit a written
2.30request to the sheriff to have the surplus applied to the redemption amount. The right to
2.31have the surplus applied to the redemption amount is not transferable to any subsequent
2.32owner.
2.33 Subd. 4.Surplus less than $100.If a surplus remains under $100, the sheriff may pay
2.34the surplus amount to the owner of record at the time of the sheriff's sale.
2Sec. 2.
REVISOR JSK H1027-1HF1027 FIRST ENGROSSMENT 3.1 Subd. 5.Resolution of competing claims.If there are competing claims or if it appears
3.2to the sheriff that any claim is not meritorious, the sheriff may apply to the court in the
3.3county in which the sale was made and set forth by petition the facts then known to the
3.4sheriff, and the names and addresses of the owner and all known claimants to the surplus,
3.5at no cost to the sheriff. The sheriff shall retain the surplus until further order of the court
3.6under section 580.28. If a hearing is scheduled, the sheriff may participate in an advisory
3.7capacity. The sheriff shall be represented by the county attorney. The sheriff shall give
3.8notice of the opening of the court file to the holders of the claims by service of the petition
3.9in the manner of a summons under the Rules of Civil Procedure. Failure of an owner to
3.10participate in the court action does not waive the right of that owner to the surplus.
3.11 Sec. 3. Minnesota Statutes 2024, section 580.225, is amended to read:
3.12 580.225 SATISFACTION OF JUDGMENT MORTGAGE.
3.13 The amount received from foreclosure sale under this chapter is full satisfaction of the
3.14mortgage debt, except as provided in section 582.30.
3.15 Sec. 4. Minnesota Statutes 2024, section 580.24, is amended to read:
3.16 580.24 REDEMPTION BY CREDITOR.
3.17 (a) If no redemption is made by the mortgagor, the mortgagor's personal representatives
3.18or assigns, the most senior creditor having a legal or equitable lien upon the mortgaged
3.19premises, or some part of it, subsequent to the foreclosed mortgage, may redeem within
3.20seven 14 days after the expiration of the redemption period determined under section 580.23
3.21or 582.032, whichever is applicable; and each subsequent creditor having a lien may redeem,
3.22in the order of priority of their respective liens, within seven 14 days after the time allowed
3.23the prior lienholder by paying the amount required under this section. However, no creditor
3.24is entitled to redeem unless, one week or more prior to the expiration of the period allowed
3.25for redemption by the mortgagor, the creditor:
3.26 (1) records with each county recorder and registrar of titles where the foreclosed mortgage
3.27is recorded a notice of the creditor's intention to redeem;
3.28 (2) records with each county recorder and registrar of titles where the notice of the
3.29creditor's intention to redeem is recorded all documents necessary to create the lien on the
3.30mortgaged premises and to evidence the creditor's ownership of the lien, including a copy
3.31of any money judgment necessary to create the lien; and
3Sec. 4.
REVISOR JSK H1027-1HF1027 FIRST ENGROSSMENT 4.1 (3) after complying with clauses (1) and (2), delivers to the sheriff who conducted the
4.2foreclosure sale or the sheriff's successor in office a copy of each of the documents required
4.3to be recorded under clauses (1) and (2), with the office, date and time of filing for record
4.4stated on the first page of each document.
4.5 The sheriff shall maintain for public inspection all documents delivered to the sheriff
4.6and shall note the date of delivery on each document. The sheriff may charge a fee of $100
4.7for the documents delivered to the sheriff relating to each lien. The sheriff shall maintain
4.8copies of documents delivered to the sheriff for a period of six months after the end of the
4.9mortgagor's redemption period.
4.10 (b) Saturdays, Sundays, legal holidays, and the first day following the expiration of the
4.11prior redemption period must be included in computing the seven-day14-day redemption
4.12period. When the last day of the period falls on Saturday, Sunday, or a legal holiday, that
4.13day must be omitted from the computation. The order of redemption by judgment creditors
4.14subsequent to the foreclosed mortgage shall be determined by the order in which their
4.15judgments were entered as memorials on the certificate of title for the foreclosed premises
4.16or docketed in the office of the district court administrator if the property is not registered
4.17under chapter 508 or 508A, regardless of the homestead status of the property. All mechanic's
4.18lienholders who have coordinate liens shall have one combined seven-day 14-day period
4.19to redeem.
4.20 (c) The amount required to redeem from the holder of the sheriff's certificate of sale is
4.21the amount required under section 580.23. The amount required to redeem from a person
4.22creditor holding a certificate of redemption is:
4.23 (1) the amount paid to redeem as shown on the certificate of redemption; plus
4.24 (2) interest on that amount to the date of redemption at the rates stated on the certificate
4.25of sale and the affidavit provided by section 580.25, clause (3), or six percent if no rate is
4.26otherwise stated; plus
4.27 (3) the amount claimed due on the person's creditor's lien, as shown on the affidavit
4.28under section 580.25, clause (3).
4.29 (d) If the sheriff determines there is a dispute or question of validity about a redemption,
4.30the sheriff may accept the amount required to redeem, together with documents in support
4.31of the redemption, from one or more creditors competing for or claiming a right to redeem,
4.32without executing and delivering a certificate of redemption, and the sheriff may commence
4.33an action under section 580.28 at no cost to the sheriff. A creditor subject to a dispute or
4.34question of validity about a redemption may submit the matter for adjudication of the court
4Sec. 4.
REVISOR JSK H1027-1HF1027 FIRST ENGROSSMENT 5.1under section 580.28. If the sheriff does not execute and deliver a certificate of redemption
5.2under this section, all further junior creditor redemption periods are stayed until determined
5.3by the court, and all junior creditors who have recorded notices of intent to redeem should
5.4be included in the action under section 580.28. The amount required to redeem may be paid
5.5to the holder of the sheriff's certificate of sale or the certificate of redemption, as the case
5.6may be, or to the sheriff for the holder.
5.7 EFFECTIVE DATE.This section is effective for redemptions occurring after January
5.81, 2026.
5.9 Sec. 5. Minnesota Statutes 2024, section 580.25, is amended to read:
5.10 580.25 CREDITOR REDEMPTION, HOW MADE.
5.11 Redemption shall be made as provided in this section.
5.12 The person creditor desiring to redeem shall pay the amount required by law for the
5.13redemption, and shall produce to the person or officer receiving the redemption payment:
5.14 (1) a copy of the docket of the judgment, or of the recorded deed or mortgage, or of the
5.15record or files evidencing any other lien under which the person creditor claims a right to
5.16redeem;
5.17 (2) a copy of any recorded assignment necessary to evidence the person's creditor's
5.18ownership of the lien. If the redemption is under an assignment of a judgment, the assignment
5.19shall be filed in the court entering the judgment, as provided by law, and the person creditor
5.20so redeeming shall produce a copy of it and of the record of its filing, and the copy of the
5.21docket shall show that the proper entry was made upon the docket. No further evidence of
5.22the assignment of the judgment is required unless the mortgaged premises or part of it is
5.23registered property, in which case the judgment and all assignments of the judgment must
5.24be entered as a memorial upon the certificate of title to the mortgaged premises and a copy
5.25of the judgment and each assignment with the certificate of record endorsed on it must be
5.26produced; and
5.27 (3) an affidavit of the person creditor or the person's creditor's agent, showing the amount
5.28then actually claimed due on the person's identifying the lien and required to be paid on the
5.29lien in order to redeem from the person under which the creditor claims a right to redeem
5.30and stating the amount then actually claimed due and owing on the lien and stating the
5.31interest rate on the lien. Additional fees and charges may be claimed due only as provided
5.32in section 582.03. The sheriff receiving the affidavit may furnish a copy of the affidavit to
5.33any interested party, upon request.
5Sec. 5.
REVISOR JSK H1027-1HF1027 FIRST ENGROSSMENT 6.1 If redemption is made to the sheriff, the sheriff may charge a fee of $250 for issuing the
6.2certificate of redemption and any related service. No other fee may be charged by the sheriff
6.3for a redemption.
6.4 Within 24 hours after a redemption is made, or as soon as reasonably possible, the person
6.5redeeming shall cause the documents so required to be produced to be recorded with the
6.6county recorder, or registrar of titles, or both when appropriate, who may receive fees as
6.7prescribed in section 357.18 or 508.82. If the redemption is made at any place other than
6.8the county seat, it is sufficient forthwith to deposit the documents in the nearest post office,
6.9addressed to the recorder or registrar of titles, with the postage prepaid within 24 hours after
6.10redemption is made or as soon as reasonably possible. A person recording documents
6.11produced for redemption shall, on the same day, deliver copies of the documents to the
6.12sheriff for public inspection. The sheriff may receive a fee of $20 for the documents delivered
6.13following a redemption. The sheriff shall note the date of delivery on the documents and
6.14shall maintain for public inspection all documents delivered to the sheriff for a period of
6.15six months after the end of the mortgagor's redemption period.
6.16 EFFECTIVE DATE.This section is effective for redemptions occurring after January
6.171, 2026.
6.18 Sec. 6. Minnesota Statutes 2024, section 580.26, is amended to read:
6.19 580.26 CERTIFICATE OF REDEMPTION; RECORD.
6.20 The person or officer from whom such redemption is made shall make and deliver to
6.21the person redeeming a certificate executed and acknowledged in the same manner as a
6.22conveyance, containing:
6.23 (1) if redeemed under section 580.23 or 582.032, the name of the person mortgagor or
6.24the mortgagor's legal representative or assignee redeeming, and if redeemed under section
6.25580.25, the name of the creditor redeeming, and the amount paid by the person on such
6.26redemption to redeem;
6.27 (2) a description of the sale for which such redemption is made, and of the property
6.28redeemed;
6.29 (3) a statement of the claim upon which such redemption is made and, if upon a lien,
6.30the amount claimed to be due thereon at the date of redemption.
6.31 If redemption is made by the owner of the property sold, the owner's heirs, personal
6.32representatives, or assigns, such certificate shall be recorded within four days one week
6.33after the expiration of the period allowed by law to the owner for redemption and, if made
6Sec. 6.
REVISOR JSK H1027-1HF1027 FIRST ENGROSSMENT 7.1by a creditor holding a lien, the certificate shall be recorded within four days one week after
7.2such redemption. Unless so recorded, the certificate shall be void as only against any person
7.3in good faith redeeming from the same person or lien.
7.4 EFFECTIVE DATE.This section is effective for redemptions occurring after January
7.51, 2026.
7.6 Sec. 7. Minnesota Statutes 2024, section 580.28, is amended to read:
7.7 580.28 ACTION TO SET ASIDE MORTGAGE; FORECLOSURE; REDEMPTION.
7.8 When an action is brought wherein it is claimed that any mortgage as to the plaintiff or
7.9person for whose benefit the action is brought is fraudulent or void, or has been paid or
7.10discharged, in whole or in part, or the relative priority or the validity of liens, redemption
7.11rights, or rights to any surplus is disputed, if such mortgage has been foreclosed by
7.12advertisement, and the time for redemption from the foreclosure sale will expire before final
7.13judgment in such action, the plaintiff or beneficiary having the right to redeem, for the
7.14purpose of saving such right in case the action fails, may deposit with the sheriff before the
7.15time of redemption expires the amount for which the mortgaged premises were sold, with
7.16interest thereon to the time of deposit, together with a bond to the holder of the sheriff's
7.17certificate of sale, in an amount and with sureties to be approved by the sheriff, conditioned
7.18to pay all interest that may accrue or be allowed on such deposit if the action fail a separate
7.19deposit with the sheriff of one year's interest on the amount deposited. The person shall, in
7.20writing, notify such sheriff that the person claims the mortgage to be fraudulent or void, or
7.21to have been paid or discharged, in whole or in part, as the case may be, and that such action
7.22is pending, and direct the sheriff to retain such money and bond until final judgment or
7.23other order of the court. In case such action fails If so ordered by the court, such deposit
7.24shall operate as a redemption of the premises from such foreclosure sale, and entitle the
7.25plaintiff to a certificate thereof. Such foreclosure, deposit, bond, and notice shall be brought
7.26to the attention of the court by supplemental complaint in the action, and the judgment shall
7.27determine the validity of the foreclosure sale, and the rights of the parties to the moneys
7.28and bond so deposited, which shall be paid and delivered by the sheriff as directed by such
7.29judgment upon delivery to the sheriff of a certified copy thereof. The remedy herein provided
7.30shall be in addition to other remedies now existing.
7.31 EFFECTIVE DATE.This section is effective for redemptions occurring after January
7.321, 2026.
7Sec. 7.
REVISOR JSK H1027-1HF1027 FIRST ENGROSSMENT 8.1 Sec. 8. Minnesota Statutes 2024, section 582.03, subdivision 1, is amended to read:
8.2 Subdivision 1.Allowable costs collectable upon redemption.The holder of any sheriff's
8.3certificate of sale, from a foreclosure by advertisement or action of a mortgage or lien or
8.4execution, or the holder of any certificate of redemption as a junior creditor during the
8.5period of redemption, may pay and claim the following on redemption: any taxes or
8.6assessments on which any penalty would otherwise accrue, and any costs of a hazard
8.7insurance policy for the holder's interest in the mortgaged premises incurred for the period
8.8of holding the sheriff's certificate, any costs incurred when an order to reduce a mortgagor's
8.9redemption period under section 582.032 is entered, including costs and disbursements
8.10awarded under section 582.032, subdivision 9, any fees paid to the county recorder, registrar
8.11of titles, or sheriff to obtain or record the certificates of sale or redemption or notices of
8.12intention to redeem, any reasonable fees paid to licensed real estate brokers for broker price
8.13opinions or to licensed appraisers for appraisals, any deed tax paid to file a certificate of
8.14redemption, reasonable attorney fees incurred after the foreclosure sale not to exceed one-half
8.15of the amount authorized by section 582.01, any costs incurred under section 582.031, and
8.16any interest or installment of principal upon any prior or superior mortgage, lien, or contract
8.17for deed in default or that becomes due during the period of redemption. In all such cases,
8.18the costs so paid and claimed due, with interest from the date of payment at the rate stated
8.19in the certificate of sale or at six percent if no rate is stated, shall be a part of the sum required
8.20to be paid to redeem from such sale. No other costs, fees, interest, or other amount may be
8.21added to the amount necessary to redeem.
8.22 EFFECTIVE DATE.This section is effective for affidavits filed with the sheriff after
8.23January 1, 2026.
8.24 Sec. 9. Minnesota Statutes 2024, section 582.03, subdivision 2, is amended to read:
8.25 Subd. 2.Affidavit of allowable costs.Any payments made and claimed due under
8.26subdivision 1 shall be proved by the affidavit of the holder of the sheriff's certificate or its
8.27agent or attorney, itemizing each of the allowable costs and the date of payment and
8.28describing the premises. The affidavit must be filed with the sheriff of the county in which
8.29the sale was held at any time prior to expiration of the mortgagor's redemption period. Upon
8.30written request by the sheriff, the holder of the sheriff's certificate or certificate of redemption
8.31shall provide an affidavit of allowable costs to the sheriff within seven days of the date of
8.32the request by the sheriff. If the mortgagor does not redeem within seven days after the
8.33affidavit is filed, the holder of the sheriff's certificate may file a supplemental affidavit if
8.34additional allowable costs are incurred during the redemption period. If the holder of the
8Sec. 9.
REVISOR JSK H1027-1HF1027 FIRST ENGROSSMENT 9.1sheriff's certificate or certificate of redemption fails to respond to the sheriff's request within
9.2seven days, the sheriff may calculate a redemption amount pursuant to section 580.23,
9.3subdivision 1, and issue a certificate of redemption for that amount. If the time allowed to
9.4redeem is less than seven days from the expiration of the redemption period, the sheriff
9.5shall make a reasonable effort to request the affidavit of allowable costs in writing from the
9.6holder of the sheriff's certificate, its agent, or attorney before issuing a certificate of
9.7redemption. If the affidavit of allowable costs is not provided more than one business day
9.8before the expiration of the redemption period, at any time one business day or less before
9.9the expiration of the redemption period, the sheriff may calculate a redemption amount
9.10pursuant to section 580.23, subdivision 1, and issue a certificate of redemption for that
9.11amount. The amount calculated by the sheriff, absent malfeasance by the sheriff, binds the
9.12holder of the sheriff's certificate even if the amount calculated by the sheriff is less than the
9.13actual amount due.
9.14 EFFECTIVE DATE.This section is effective for affidavits filed with the sheriff after
9.15January 1, 2026.
9.16 Sec. 10. Minnesota Statutes 2024, section 582.043, subdivision 6, is amended to read:
9.17 Subd. 6.Dual tracking.(a) If the servicer has received a loss mitigation application and
9.18the subject mortgage loan has not already been referred to an attorney for foreclosure, a
9.19servicer shall not refer the subject mortgage loan to an attorney for foreclosure while the
9.20mortgagor's application is pending, unless:
9.21 (1) the servicer determines that the mortgagor is not eligible for any loss mitigation
9.22option, the servicer informs the mortgagor of the determination in writing, and the applicable
9.23appeal period has expired without an appeal or the appeal has been properly denied;
9.24 (2) where a written offer is made and a written acceptance is required, the mortgagor
9.25fails to accept the loss mitigation offer within the time frame specified in the offer or within
9.2614 days after the date of the offer, whichever is longer; or
9.27 (3) the mortgagor declines the loss mitigation offer in writing.
9.28 (b) If the servicer receives a loss mitigation application after the subject mortgage loan
9.29has been referred to an attorney for foreclosure, but before a foreclosure sale has been
9.30scheduled, a servicer shall not move for an order of foreclosure, seek a foreclosure judgment,
9.31or conduct a foreclosure sale unless:
9Sec. 10.
REVISOR JSK H1027-1HF1027 FIRST ENGROSSMENT 10.1 (1) the servicer determines that the mortgagor is not eligible for a loss mitigation option,
10.2the servicer informs the mortgagor of this determination in writing, and the applicable appeal
10.3period has expired without an appeal or the appeal has been properly denied;
10.4 (2) where a written offer is made and a written acceptance is required, the mortgagor
10.5fails to accept the loss mitigation offer within the time frame specified in the offer or within
10.614 days after the date of the offer, whichever is longer; or
10.7 (3) the mortgagor declines a loss mitigation offer in writing.
10.8 (c) If the servicer receives a loss mitigation application after the foreclosure sale has
10.9been scheduled, but before midnight of the seventh business day prior to the foreclosure
10.10sale date, the servicer must halt the foreclosure sale and evaluate the application. If required
10.11to halt the foreclosure sale and evaluate the application, the servicer may cancel the
10.12foreclosure sale or postpone the foreclosure sale under section 580.07, subdivision 1, but
10.13must not move for an order of foreclosure, seek a foreclosure judgment, or conduct a
10.14foreclosure sale unless 60 days have passed since the occurrence of one of the following,
10.15whichever is applicable:
10.16 (1) the servicer determines that the mortgagor is not eligible for a loss mitigation option,
10.17the servicer informs the mortgagor of this determination in writing, and the applicable appeal
10.18period has expired without an appeal or the appeal has been properly denied;
10.19 (2) where a written offer is made and a written acceptance is required, the mortgagor
10.20fails to accept the loss mitigation offer within the time frame specified in the offer or within
10.2114 days after the date of the offer, whichever is longer; or
10.22 (3) the mortgagor declines a loss mitigation offer in writing.
10.23 (d) A servicer shall not move for an order of foreclosure or conduct a foreclosure sale
10.24under any of the following circumstances:
10.25 (1) the mortgagor is in compliance with the terms of a trial or permanent loan
10.26modification, or other loss mitigation option; or
10.27 (2) a short sale has been approved by all necessary parties and proof of funds or financing
10.28has been provided to the servicer.
10Sec. 10.
REVISOR JSK H1027-1HF1027 FIRST ENGROSSMENT