Source: https://www.revisor.mn.gov/statutes/2010/cite/326B.89/subd/326B.89.13
Timestamp: 2019-08-17 23:27:21
Document Index: 5425313

Matched Legal Cases: ['art 2', 'art 2', 'art 2', 'art 2', 'art 3', 'art 3', 'art 5', 'art 5', 'art 8', 'art 3', 'art 3', 'art 8', 'art 13', 'art 5']

﻿ Sec. 326B.89 MN Statutes
Section 326B.89
326B.885 326B.90
2017 Subd. 1 Amended 2017 c 94 art 2 s 15
2017 Subd. 5 Amended 2017 c 94 art 2 s 16
2017 Subd. 14 Repealed 2017 c 94 art 2 s 19
2013 Subd. 1 Amended 2013 c 85 art 2 s 35
2011 Subd. 6 Amended 2011 c 4 art 3 s 49
2011 Subd. 8 Amended 2011 c 4 art 3 s 50
2010 Subd. 1 Amended 2010 c 280 s 29
2010 Subd. 5 Amended 2010 c 280 s 30
2010 Subd. 6 Amended 2010 c 280 s 31
2010 Subd. 7 Amended 2010 c 280 s 32
2010 Subd. 8 Amended 2010 c 280 s 33
2010 Subd. 10 Amended 2010 c 280 s 34
2010 Subd. 13 Amended 2010 c 280 s 35
2010 Subd. 17 New 2010 c 280 s 36
2010 Subd. 18 New 2010 c 280 s 37
2009 Subd. 3 Amended 2009 c 78 art 5 s 24
2009 Subd. 16 Amended 2009 c 78 art 5 s 25
2008 Subd. 5 Amended 2008 c 337 s 49
2008 Subd. 6 Amended 2008 c 337 s 50
2008 Subd. 12 Amended 2008 c 337 s 51
2008 Subd. 14 Amended 2008 c 337 s 52
2007 326B.89 New 2007 c 140 art 8 s 28
2007 326B.89 New 2007 c 135 art 3 s 29
(b) "Gross annual receipts" means the total amount derived from residential contracting or residential remodeling activities, regardless of where the activities are performed, and must not be reduced by costs of goods sold, expenses, losses, or any other amount.
(d) "Residential real estate" means a new or existing building constructed for habitation by one to four families, and includes detached garages.
(f) "Owner" when used in connection with real property, means a person who has any legal or equitable interest in real property and includes a condominium or townhome association that owns common property located in a condominium building or townhome building or an associated detached garage. Owner does not include any real estate developer.
The contractor recovery fund is created in the state treasury and shall be administered by the commissioner for the purposes described in this section. Any interest or profit accruing from investment of money in the fund shall be credited to the contractor recovery fund.
Subd. 3.Fund fees.
In addition to any other fees, a person who applies for or renews a license under sections 326B.802 to 326B.885 shall pay a fee to the fund. The person shall pay, in addition to the appropriate application or renewal fee, the following additional fee that shall be deposited in the fund. The amount of the fee shall be based on the person's gross annual receipts for the person's most recent fiscal year preceding the application or renewal, on the following scale:
Fee Gross Annual Receipts
$320 under $1,000,000
$420 $1,000,000 to $5,000,000
$520 over $5,000,000
Subd. 4.Purpose of fund.
(1) compensate owners or lessees of residential real estate who meet the requirements of this section;
(2) reimburse the department for all legal and administrative expenses, disbursements, and costs, including staffing costs, incurred in administering and defending the fund;
(3) pay for educational or research projects in the field of residential contracting to further the purposes of sections 326B.801 to 326B.825; and
(4) provide information to the public on residential contracting issues.
Subd. 5.Payment limitations.
The commissioner shall not pay compensation from the fund to an owner or a lessee in an amount greater than $75,000 per licensee. The commissioner shall not pay compensation from the fund to owners and lessees in an amount that totals more than $150,000 per licensee. The commissioner shall only pay compensation from the fund for a final judgment that is based on a contract directly between the licensee and the homeowner or lessee that was entered into prior to the cause of action and that requires licensure as a residential building contractor or residential remodeler.
Subd. 6.Verified application.
The verified application must include documents evidencing the amount of the owner's or the lessee's actual and direct out-of-pocket loss. The owner's and the lessee's actual and direct out-of-pocket loss shall not include attorney fees, litigation costs or fees, interest on the loss, and interest on the final judgment obtained as a result of the loss. Any amount paid in satisfaction of the final judgment shall be applied to the owner's or lessee's actual and direct out-of-pocket loss. An owner or lessee may serve a verified application regardless of whether the final judgment has been discharged by a bankruptcy court. A judgment issued by a court is final if all proceedings on the judgment have either been pursued and concluded or been forgone, including all reviews and appeals. For purposes of this section, owners who are joint tenants or tenants in common are deemed to be a single owner. For purposes of this section, owners and lessees eligible for payment of compensation from the fund shall not include government agencies, political subdivisions, financial institutions, and any other entity that purchases, guarantees, or insures a loan secured by real estate.
Subd. 7.Commissioner review.
The commissioner shall within 120 days after receipt of the complete verified application:
(1) enter into an agreement with an owner or a lessee that resolves the verified application for compensation from the fund; or
(2) issue an order to the owner or the lessee accepting, modifying, or denying the verified application for compensation from the fund.
Upon receipt of an order issued under clause (2), the owner or the lessee shall have 30 days to serve upon the commissioner a written request for a hearing. If the owner or the lessee does not serve upon the commissioner a timely written request for hearing, the order issued under clause (2) shall become a final order of the commissioner that may not be reviewed by any court or agency. The commissioner shall order compensation from the fund only if the owner or the lessee has filed a verified application that complies with subdivision 6 and if the commissioner determines based on review of the application that compensation should be paid from the fund. The commissioner shall not be bound by any prior settlement, compromise, or stipulation between the owner or the lessee and the licensee.
Subd. 8.Administrative hearing.
The administrative law judge shall issue findings of fact, conclusions of law, and order. If the administrative law judge finds that compensation should be paid to the owner or the lessee, the administrative law judge shall order the commissioner to make payment from the fund of the amount it finds to be payable pursuant to the provisions of and in accordance with the limitations contained in this section. The order of the administrative law judge shall constitute the final decision of the agency in the contested case. Judicial review of the administrative law judge's findings of fact, conclusions of law, and order shall be in accordance with sections 14.63 to 14.69.
Subd. 9.Satisfaction of applications for compensation.
The commissioner shall pay compensation from the fund to an owner or a lessee pursuant to the terms of an agreement that has been entered into under subdivision 7, clause (1), or pursuant to a final order that has been issued under subdivision 7, clause (2), or subdivision 8 by December 1 of the fiscal year following the fiscal year during which the agreement was entered into or during which the order became final, subject to the limitations of this section. At the end of each fiscal year the commissioner shall calculate the amount of compensation to be paid from the fund pursuant to agreements that have been entered into under subdivision 7, clause (1), and final orders that have been issued under subdivision 7, clause (2), or subdivision 8. If the calculated amount exceeds the amount available for payment, then the commissioner shall allocate the amount available among the owners and the lessees in the ratio that the amount agreed to or ordered to be paid to each owner or lessee bears to the amount calculated. The commissioner shall mail notice of the allocation to all owners and lessees not less than 45 days following the end of the fiscal year. Any compensation paid by the commissioner in accordance with this subdivision shall be deemed to satisfy and extinguish any right to compensation from the fund based upon the verified application of the owner or lessee.
Subd. 10.Right of subrogation.
Notwithstanding subdivisions 1 to 9 and 11 to 16, the commissioner shall not pay compensation from the fund to an owner or lessee unless and until the owner or lessee executes an assignment to the commissioner of all rights, title, and interest in the final judgment in the amount of the compensation to be paid under an agreement under subdivision 7, clause (1), or a final order issued under subdivision 7, clause (2), or subdivision 8. If the commissioner pays compensation from the fund to an owner or a lessee pursuant to an agreement under subdivision 7, clause (1), or a final order issued under subdivision 7, clause (2), or subdivision 8, then the commissioner shall be subrogated to all of the rights, title, and interest in the owner's or lessee's final judgment in the amount of compensation paid from the fund. The commissioner shall deposit in the fund money recovered under this subdivision.
Subd. 11.Effect of section on commissioner's authority.
Nothing contained in this section shall limit the authority of the commissioner to take disciplinary action against a licensee under the provisions of this chapter. A licensee's repayment in full of obligations to the fund shall not nullify or modify the effect of any other disciplinary proceeding brought under the provisions of this chapter.
Subd. 12.Limitation.
Notwithstanding subdivision 5, nothing may obligate the fund for claims brought by:
(2) owners of residential property where the contracting activity complained of was the result of a contract entered into with a prior owner, unless the claim is brought and judgment is rendered for breach of the statutory warranty set forth in chapter 327A.
Subd. 13.Condominiums or townhouses.
(a) For purposes of this section, the terms "owner" and "lessee" of residential real estate include the following, regardless of the number of residential units per building:
(1) an owner or lessee of an apartment as defined in and governed by chapter 515;
(2) an owner or lessee of a unit in a common interest community created under or governed by chapter 515B;
(3) an owner or lessee of a unit in a planned community or cooperative created prior to June 1, 1994, that has not elected to be governed by chapter 515B;
(4) an association or master association, as defined in chapter 515B, that owns or leases the common elements of a common interest community; and
(5) a homeowners association that owns or leases the common elements in a planned community or cooperative created prior to June 1, 1994, that has not elected to be governed by chapter 515B.
(b) For purposes of this subdivision, "common elements" means common areas and facilities as defined in chapter 515 and common elements as defined in chapter 515B.
Subd. 14.Accelerated compensation.
Money in the fund is appropriated to the commissioner for the purposes of this section.
Subd. 16.Additional assessment.
If the balance in the fund is at any time less than the commissioner determines is necessary to carry out the purposes of this section, every licensee, when renewing a license, shall pay, in addition to the annual renewal fee and the fee set forth in subdivision 3, an assessment not to exceed $200. The commissioner shall set the amount of assessment based on a reasonable determination of the amount that is necessary to restore a balance in the fund adequate to carry out the purposes of this section.
Subd. 17.Recovery of payments.
If the commissioner pays compensation from the fund on the basis of any false or misleading information provided to the commissioner in connection with the application for compensation, then, upon the application of the commissioner, a district court shall order the owner or lessee to repay to the fund all such compensation paid from the fund. In addition, the state may be allowed an amount determined by the court to be the reasonable value of all or part of the litigation expenses, including attorney fees, incurred by the state. The commissioner shall deposit in the fund money recovered under this subdivision.
Subd. 18.Payment of penalty.
If an owner or lessee violates section 326B.084 in connection with an application for compensation from the fund, and if the commissioner issues to the owner or lessee an administrative order under section 326B.082, subdivision 7, for that violation of section 326B.084, then the commissioner shall deposit in the fund all penalties paid pursuant to the administrative order.
2007 c 135 art 3 s 29; 2007 c 140 art 8 s 28,30; art 13 s 4; 2008 c 337 s 49-52; 2009 c 78 art 5 s 24,25; 2010 c 280 s 29-37