The surplus change is the one that reaches associations first

Redemption is expensive: it requires paying off the senior mortgage to take the unit. Most Minnesota associations, most of the time, cannot and should not do it. The surplus claim costs an affidavit.

Before this amendment, a sheriff's sale that produced more than the foreclosing lender was owed generally left that money heading back to the former owner, while the association's assessment lien went unpaid. From 1 August 2025, a junior creditor of record at the time of the sale can claim it by priority — if it demands within the time allowed for redemption.

Three operational requirements follow, and none of them is automatic:

The lien must be of record at the time of the sheriff's sale. Minnesota associations often rely on the fact that recording the declaration perfects the assessment lien without a separate filing. For surplus purposes the safer position is a recorded, dated instrument that a sheriff can identify as a lien of record on the sale date.

Somebody has to be watching the sale. The surplus is paid on demand. No demand, no payment. That means tracking foreclosures on units in the community and knowing when the sale occurred — which is a monitoring task most associations have never had a reason to perform.

The affidavit has to state a number. The amount remaining unpaid and the interest creating the right. That number should be reconcilable to the ledger, and from 1 January 2027 the ledger itself is changing: Chapter 82 requires payments to be applied to assessments before fines, and removes ordinary fines from the assessment lien entirely.

How this interacts with the association's own foreclosure

Minnesota associations foreclose under the same chapter. Section 515B.3-116(h)(1), as amended by Chapter 82, provides that in a condominium or planned community — “regardless of when the condominium or planned community was created” — the association's lien “may be foreclosed in a like manner as a mortgage containing a power of sale pursuant to chapter 580, or by action pursuant to chapter 581.”

So chapter 580 procedure governs both sides of the association's position: as foreclosing creditor on its own lien, and as junior lienholder when a mortgagee forecloses.

The second change: postponement is now once per proceeding

Laws 2026, ch. 51 (H.F. 3479) rewrote the homestead owner's postponement right at Minn. Stat. § 580.07, subd. 2 — the provision that lets an owner delay a sale by five months in exchange for a redemption period cut to five weeks. It is effective 22 April 2026 and applies to foreclosures with a notice of pendency, or a lis pendens under chapter 581, recorded on or after that date.²

Three changes:

• Heirs may exercise it. The right now runs to “the mortgagor or owner, or, if the mortgagor or owner is deceased, the personal representatives or any person entitled to a transfer of ownership by devise, descent, or operation of law.”
• Once per proceeding, not once per mortgage. The right “may be exercised only once [regardless whether the mortgagor reinstates the mortgage prior to the postponed mortgage foreclosure sale] during each foreclosure proceeding commenced under this chapter or chapter 581.”
• A defective affidavit no longer invalidates the foreclosure. “The foreclosure of the mortgage shall not be invalidated if the party conducting the foreclosure postpones the sale in response to receipt of a defective or untimely affidavit.”

The affidavit must be recorded and filed with the sheriff at least 15 days before the scheduled sale date, and may now be triggered off “a postponed sale date in a subsequent notice of postponement.”

What that does to an association's collection forecast

A five-month postponement, available once in each successive proceeding, means an association's foreclosure on an owner-occupied unit can slip materially further than it could before — and can slip again if a first proceeding is abandoned and a second commenced.

Budget and reserve forecasting should assume it. An association carrying a large delinquency and planning around a recovery date is planning around a date the owner can move.

Layered on top, from 1 January 2027 Chapter 82 bars commencing foreclosure at all until the qualifying debt — common expenses, special assessments, and only the carve-out categories of fine — is more than three months delinquent. The combined effect is that the earliest realistic recovery on a 2027 Minnesota assessment delinquency is considerably later than it was in 2024.

What to watch next

Nothing is pending. The 94th Legislature adjourned 18 May 2026, and no further chapter 580 or 581 bill affecting associations survived the biennium.

One planning note for pre-1994 communities: under Minn. Stat. § 515B.1-102(b)(3), MCIOA does not reach planned communities and cooperatives created before 1 June 1994 unless they have elected in — but chapters 580 and 581 are general foreclosure law and apply regardless. The 2025 and 2026 redemption and postponement changes reach every Minnesota association holding a lien, covered by MCIOA or not.

This describes statutory procedure. It is not advice about any particular foreclosure or redemption.