Monday, October 4, 2010

Can lender access property after foreclosure sale?

This post is a guest post by attorney Jeffrey O'Brien, partner with Mansfield Tanick & Cohen, P.A. who specializes  in the areas of business and corporate law, real estate law, estate and business succession planning and probate law.


Can a Foreclosing Lender Enter a Property
During the Redemption Period?

In Minnesota, foreclosures work a bit differently than other states. Not only does Minnesota have a non-judicial foreclosure process (unlike most states which only allow foreclosures to be brought by court action), but Minnesota is also one of only ten (10) states that provides for post-sale redemption rights.

The most significant implication of a foreclosed homeowner having post-sale redemption rights (as opposed to pre-sale redemption rights) is that the foreclosure sale does not end the process. In a way, it is only the beginning. For the next six (6) months, Minnesota law allows the homeowner to stay in possession of the property, with the understanding that up until the end of the six (6) months, the homeowner could, theoretically, pay off the foreclosing lender’s mortgage plus the costs of the foreclosure and regain ownership of the property.

This post-sale redemption period can be tricky, for a number of reasons. For example, the lender is not able to list the property for sale, based upon the fact that the homeowner can redeem the property during that period, and allowing the lender to sell the property to someone else would create a significant ownership dispute, not to mention the fact that there would seem to be little to no market for purchasing a property that could be redeemed at less than the new buyer’s purchase price for a period of time. For this reason, if the homeowner abandons the property, the lender has the option to seek a court-ordered shortening of the redemption period to five weeks.

Even if the redemption period is not shortened, the lender is not powerless to protect its property. That’s because Minnesota Statutes Section 582.031 allows the lender, in certain circumstances, to enter the property during the redemption period and take steps to protect the property. The statute provides that “if premises described in a mortgage or sheriff's certificate are vacant or unoccupied, the holder of the mortgage or sheriff's certificate or the holder's agents and contractors may, but is under no obligation to, enter upon the premises to protect the premises from waste, until the holder of the mortgage or sheriff's certificate receives notice that the premises are occupied.”

Subdivision 2 of the statute goes on to clarify what actions the lender may take to protect the premises from waste: “install or change locks on doors and windows, board windows, install an alarm system, provide a resident caretaker, and otherwise prevent or minimize damage to the premises from the elements, vandalism, trespass, or other illegal activities.” For example, given Minnesota’s harsh winters, a lender may take steps to ensure that pipes don’t freeze and burst by winterizing the property.

In order to protect the homeowner’s redemption rights (which include the right of possession of the property until the expiration of the owner’s redemption period), if the holder of the mortgage or sheriff's certificate installs or changes locks, a key to the premises must be promptly delivered to the homeowner or any person lawfully claiming through the mortgagor, upon request.

Section 582.031 is a necessary result of Minnesota’s post-sale redemption rights, and lenders should be aware of their rights during the redemption period just as much as they need to be concerned about the homeowner’s rights.

This post was originally published on Jeff's blog: here
Reposted with permission.

For more information about your rights after a foreclosure sale - during Minnesota's Redemption Period - the Center has created a Redemption Period Fact Sheet, or you can visit the Center's website here.


  1. We extended our sheriff's sale from last winter to a couple months back. Then we declared Chapter 7, and extended our sale that way. Now our sale is December 7th, 2010. Our redemption period is now only 5 weeks. Are there any cold weather rules that could keep us in the house any longer than January 15th?

  2. Anonymous 10/20 @ 7:38:

    Sorry... there are no cold weather rules that can stop an eviction after foreclosure in Minnesota. We recommend that you speak to a Housing Counselor as soon as possible to see if you might be able to access any of the assistance available to cover costs associated with finding new housing. Time is of the essence. There's more information available here:

  3. We have a seasonal property in northern MN that we occupy reagularly in the spring,summer, and fall months. Once the snow and cold weather arrive we only check the property every month or so as we reside in our home in the cities. We received notification of foreclosure proceedings with a 30 day opportunity to dispute the debt. It has been over a month and we have received no notice of a sheriff sale via our mailing address. I have been in contact with the mortgage company to negotiate a work out - if they inspect our property when we are not there can they deem it abandoned?

  4. Anonymous Nov18:

    I've run your question by some of our housing counselors... and here's what I've heard:

    "The lender may claim it is vacant if they do an inspection and nobody is there, but we recommend that the owners check in regularly with their servicer, to let them know it is not vacant (and check if it has been labeled vacant) If the lender has labeled the house vacant, providing a recent paid utility bill should be sufficient proof that it is not abandoned.

  5. Wonderful article, very informative too. Thanks for the great read!

    Arrielle P


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