House passes bill clarifying sheriff procedures and rights for foreclosure sale surpluses

The Minnesota House on April 7 passed House File 1027, a measure relating to real property that clarifies how sheriff departments should handle surplus proceeds resulting from foreclosure sales and requires sheriffs to notify property owners when a surplus exists and explain their rights.

The bill's author, Representative West, said the bill provides clarity for sheriffs and protections for homeowners and other claimants. West said the lack of a clear process has led to lawsuits when surpluses were given to the wrong parties. "This bill provides clarity for sheriff departments when they're dealing with foreclosure sales to inform the property owner whether there is a surplus and what their rights are to that surplus," West said. She described the measure as bipartisan and having support from foreclosure attorneys, sheriff departments and legal aid.

Co-author Rep. Feist said the bill addresses gaps left after a prior constitutional ruling about government foreclosures and will extend protections to private-sector foreclosures. Other lawmakers on the floor described stakeholder work and urged a green vote. The clerk recorded the roll as 134 ayes and 0 nays; the bill passed and its title was agreed to.

The bill aims to reduce litigation risk by standardizing the sheriff—s process and ensuring notice to potential claimants. West said the measure is also moving in the Senate.