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Minnesota Legislature

Protecting problem properties

Published (5/1/2009)
By Mike Cook
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Rep. Jeff Hayden (DFL-Mpls) said that Minneapolis had about 3,000 foreclosed properties last year and is on pace for about the same this year. But the state’s largest city is far from alone during the current foreclosure crisis.

A bill he sponsors with Sen. Linda Higgins (DFL-Mpls) aims to clarify rules and regulations for how cities can secure foreclosed and abandoned properties so they cannot be used for improper purposes.

Amended to include the House language, HF1394/SF1147* was approved 102-32 by the House April 29. The Senate did not concur with the changes and a conference committee has been requested.

Aspects of the bill include:

• specification of certain notice requirements;

• permission for a political subdivision to request reduction of the mortgagor’s redemption period to five weeks on a foreclosed abandoned property, like a property or mortgage owner can;

• extension of the deadline for action by a property owner from six to 14 days from being ordered to secure the premise, and failure to do so could result in municipal action; and

• classification of the sale or gift of alcohol in an abandoned property as a public nuisance in certain circumstances.

It also expands a property protection requirement by requiring the holder of a sheriff’s certificate of sale — the official document granted to the purchaser of real property sold at a mortgage foreclosure sale — to secure and protect the premise if there is prima facie evidence the property has been abandoned. If the locks are changed, the mortgagor must be provided a key.

An amendment successfully offered by Rep. Joe Mullery (DFL-Mpls), based on HF19, would permit a mortgagor or owner to postpone by five months a scheduled sheriff’s sale of their foreclosed property, in exchange for having five weeks to redeem the property after the postponed sale occurs. Only the foreclosure conductor, such as a bank, can now postpone a sheriff’s sale.

“In Minneapolis, we’ve had some entrepreneurial folks decide to take the abandoned property and have parties and sell alcohol,” Hayden said, adding that oftentimes the homes have to be torn down because of partier damage or if thieves take things like copper piping and other items that can be resold.

“We’re hoping to get to those properties in a quick and fair amount of time so whatever the disposition of the property is we can hopefully get good families back in them.”

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