Each year Super Lawyers selects attorneys using a multiphase selection process that includes peer nominations and evaluations combined with independent research. The top 5% of attorneys who are nominated are named to Super Lawyers and no more than 2.5% are named as a Rising Star.  Those on the Rising Stars list are 40 years old and younger, or have been in practice 10 or fewer years, while those appearing on the Super Lawyers list are more seasoned practitioners.

Felhaber Larson is pleased that so many of our attorneys are selected by our peers again this year for this prestigious recognition.

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1. was established and maintained separately from and independently of the person for whom the services were provided or performed;
2. owns, rents, or leases equipment, tools, vehicles, materials, supplies, office space, or other facilities that are used by the business entity to provide or perform building construction or improvement services;
3. provides or performs, or offers to provide or perform, the same or similar building construction or improvement services for multiple persons or the general public;
4. is in compliance with all of the following:

• holds a federal employer identification number if required by federal law;
• holds a Minnesota tax identification number if required by Minnesota law;
• has received and retained 1099 forms for income received for building construction or improvement services provided or performed, if required by Minnesota or federal law;
• has filed business or self-employment income tax returns, including estimated tax filings, with the federal Internal Revenue Service and the Department of Revenue, as the business entity or as a self-employed individual reporting income earned, for providing or performing building construction or improvement services, if any, in the previous 12 months; and
• has completed and provided a W-9 federal income tax form to the person for whom the services were provided or performed if required by federal law;

5. is in good standing as defined by section 5.26, if applicable;
6. has a Minnesota unemployment insurance account if required by chapter 268;
7. has obtained required workers’ compensation insurance coverage if required by chapter 176;
8. holds current business licenses, registrations, and certifications if required by chapter 326B and sections 327.31 to 327.36;
9. is operating under a written contract to provide or perform the specific services for the person that:

• is signed and dated by both an authorized representative of the business entity and of the person for whom the services are being provided or performed;
• is fully executed no later than 30 days after the date work commences;
• identifies the specific services to be provided or performed under the contract;
• provides for compensation from the person for the services provided or performed under the contract on a commission or per-job or competitive bid basis and not on any other basis; and
• the requirements of item (ii) shall not apply to change orders.

10. submits invoices and receives payments for completion of the specific services provided or performed under the written proposal, contract, or change order in the name of the business entity. Payments made in cash do not meet this requirement;
11. the terms of the written proposal, contract, or change order provide the business entity control over the means of providing or performing the specific services, and the business entity in fact controls the provision or performance of the specific services;
12. incurs the main expenses and costs related to providing or performing the specific services under the written proposal, contract, or change order;
13. is responsible for the completion of the specific services to be provided or performed under the written proposal, contract, or change order and is responsible, as provided under the written proposal, contract, or change order, for failure to complete the specific services; and
14. may realize additional profit or suffer a loss, if costs and expenses to provide or perform the specific services under the written proposal, contract, or change order are less than or greater than the compensation provided under the written proposal, contract, or change order.

See Minnesota Statute § 181.723, subd. 4. Many of these new factors are similar to the previous 9-factor test. However, some of the more significant changes to note include insurance, licensure, and contract requirements – all of which may impact some of your worker classifications.

Compliance with this law is paramount to avoiding significant penalties. A business that misclassifies employees as independent contractors may face the following penalties: (1) compensatory damages to the worker, (2) a penalty of up to $10,000 per worker that the employer failed to properly classify as an employee, (3) a penalty of up to $10,000 for each failure to properly classifying a worker as an employee under the applicable local, state, or federal law; failure to disclosure  a worker as an employee when required to do so; and requirement or request that an individual enter into an agreement that misclassifies, misrepresents, or treats the person as an independent contract; and (4) a penalty of $1,000 for each instance of obstructing the MNDOLI’s investigations into alleged worker misclassification violations. Further, individual owners, officers, or agents who knowingly or repeatedly engage in any of the prohibited activities may also be held individually liable under the new law.

In light of this new 14-factor test, it is important for Minnesota employers in the construction industry to evaluate whether they are properly classifying their independent contractors and employees under state law.

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This decision comes after the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction last month that temporarily prohibited enforcement of the CTA. After a series of conflicting decisions issued by the Fifth Circuit Court of Appeals at the end of December 2024, the U.S. Department of Justice asked the Supreme Court to intervene.

The case now returns to the Fifth Circuit Court of Appeals, which according to the briefing schedule previously set, will hear oral arguments on March 25, 2025.

Reporting companies will (again) be required to submit beneficial ownership information reports to FinCEN; however, the Supreme Court’s order does not provide guidance on a new deadline for the beneficial ownership information reporting. FinCEN will likely issue revised compliance deadlines shortly.

Felhaber will continue to closely monitor any developments regarding this matter.

UPDATE

Despite the Supreme Court’s action on January 23, 2025, in Texas Top Cop Shop, FinCEN has confirmed that reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so because a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) remains in place.

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On December 23, 2024, the U.S. Fifth Circuit Court of Appeals stayed the nationwide preliminary injunction, effectively reinstating the CTA and its BOI reporting requirements. Accordingly, reporting companies were briefly required once again to file BOI reports under the CTA. Shortly after the December 23 order, the Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) extended certain reporting deadlines to January 13, 2025.

However, three days later, on December 26, 2024, a Fifth Circuit panel reinstated the nationwide preliminary injunction blocking enforcement of the CTA “in order to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments.” FinCEN has yet to release a statement addressing the Fifth Circuit panel’s December 26 order.

Bottom Line: As a result of the Fifth Circuit decisions, the enforcement of the CTA has again been halted, at least temporarily while the current appeal is considered on its merits by the Fifth Circuit.  This appeal has been expedited, and the Fifth Circuit will issue a briefing schedule shortly.

Felhaber will continue to closely monitor any developments regarding this matter.

Update.

FinCEN  has confirmed on its website that reporting companies are “not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”

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Although the Court has not made an affirmative finding that the CTA and its reporting requirements are contrary to law, the Court determined that the CTA and its reporting rules are likely unconstitutional as outside of Congress’s power.

Under the CTA, reporting companies (entities formed or registered to do business in the United States and not subject to an exemption) were required to file a BOI report with the Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”).  For reporting companies created prior to January 1, 2024, the reporting deadline was January 1, 2025.

As a result of the Court’s decision, FinCEN is temporarily prohibited from enforcing the CTA, including any of the CTA’s penalties for noncompliance, until a final determination is made regarding the constitutionality of the law. Accordingly, reporting companies are not required to comply with the CTA’s January 1, 2025, BOI reporting deadline until further order of the Court.

FinCEN has issued a statement on its website addressing the impact of the ongoing litigation to clarify that “reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”

On December 5, 2024, the Department of Justice, on behalf of the Department of Treasury, filed a Notice of Appeal to the Fifth Circuit Court of Appeals. If the preliminary injunction order is successfully appealed, reporting companies should be prepared to resume compliance with the CTA and its BOI reporting requirements.

Felhaber will continue to closely monitor any developments regarding this matter.

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In addition to the firm’s state-wide rankings, six of our attorneys earned individual recognition as notable practitioners:

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While some of these changes have been in the works for years and thus are more widely known, others might catch uninformed landlords by surprise.

This summary provides a quick review of the most substantive changes made to Minnesota’s landlord-tenant statutes in 2023. In addition, we have highlighted several potential pitfalls that landlords may face in the coming months and years as these changes come into play.

504B.268: Right to Counsel in Public Housing

On the first page of an eviction complaint in public housing cases, landlords must now include the following notice in bold 12-point type: “If financially unable to obtain counsel, the defendant has the right to court-appointed attorney.”

For those landlords who utilize standard eviction complaints, this language should be included generally and only omitted on a case-by case basis, after a careful review demonstrates that a case does not involve public housing.

504B.285, subd. 5: Combining Allegations

For residential evictions, courts hearing eviction actions may no longer require tenants to pay money to the court, post a bond, make payment directly to a landlord, or post other security. A court may still, however, require the posting of security if the “final disposition” of the eviction action may be delayed for more than 10 days.

504B.321, subd. 1(a): New Eviction Notice Requirement

Historically, landlords could bring an eviction action for nonpayment of rent as soon as rent was due. However, they will now be required to provide a detailed and specific “pre-eviction notice” prior to filing an eviction for nonpayment of rent. This notice must be issued at least 14 days prior to filing an eviction, which will delay eviction commencement.

Landlords seeking eviction for nonpayment must provide a written notice “specifying the basis for future eviction action” and including the following information:

• the total amount due;
• a specific accounting of the amount of the total due from unpaid rent, late fees, and other charges under the lease;
• the name and address of the person authorized to receive rent and fees on behalf of the landlord;
• the following statement: “You have the right to seek legal help. If you can’t afford a lawyer, free legal help may be available. Contact Legal Aid or visit www.LawHelpMN.org to know your rights and find your local Legal Aid office.”;
• the following statement: “To apply for financial help, contact your local county or Tribal social services office, apply online at MNBenefits.mn.gov or call the United Way toll-free information line by dialing 2-1-1 or 800-543-7709”; and
• the following statement: “Your landlord can file an eviction case if you do not pay the total amount due or move out within 14 days from the date of this notice. Some local governments may have an eviction notice period longer than 14 days. The notice must be given at least 14 days prior to filing an eviction based on nonpayment. Local municipalities may require longer than 14 days advance notice.

504B.321, Subd. 6: Eviction Records Not Public

Eviction records will not be accessible to the public until the court enters a final judgment. The only people who will be able to access it until then will be the parties to the case and the licensed attorneys assisting the parties in the case.

504B.291, subd. 1, Action to Recover/ Right to Recover

Subdivision 1 has been amended to include language explaining that if the landlord brings an eviction based on nonpayment of rent, tenants have the right to redeem the property by providing a written agency guarantee.

Many landlords already provide this type of remedy to tenants during their eviction process, however the codified inclusion of such redemption did not exist in previous versions of this statute.

484.014: Eviction Expungement

Eviction records serve as a key record that landlords review when deciding whether to accept or deny a tenant application. Under the newly drafted language of this statute, tenants will find it much easier to obtain an expungement. The court will no longer require motion by a tenant prior to making its decision, instead the court has discretion to find that expungement is warranted by weighing the “the interests of justice” and “the public’s interest in knowing about the record.”

Tenants may also be entitled to a mandatory expungement, requiring no motion or further analysis by the court, if: (i) they prevail on the merits of the eviction action, (ii) the court dismisses the plaintiff’s complaint for any reason, (iii) the parties have agreed to an expungement, (iv) three years have elapsed since the eviction was ordered, or (v) the case was settled and the tenant complied with the settlement terms.

504B.335 Scheduling Trial

In the past, eviction trials were scheduled within six days of the initial appearance. However, under the most recent update to this statutory provision, trials could be scheduled much later.

Courts will be required to schedule the trial at a date “that allows for a fair, thorough and timely adjudication of the merits of the case, including the complexity of the matter, the need for the parties to obtain discovery, the need for the parties to ensure the presence of witnesses, the opportunity for the defendant to seek legal counsel and raise affirmative defenses, and any other extenuating factors . . .”

504B.211: Tenant’s Right to Privacy

Landlords must now provide a residential tenant with “not less than 24 hours advance notice” before entering the property and may only enter between the hours of 8:00 am and 8:00 pm.

The landlord must also provide the tenant with an anticipated time or window of time of entry. Although a tenant may agree to allow the landlord to enter sooner than 24 hours, the tenant cannot waive this right as a condition of entering into or maintaining the lease.

The penalty term of this statute was also increased from $100 to $500 for each violation and now includes reasonable attorney fees.

504B.171: Limitations on Criminal Activity and Marijuana Possession in Rental Properties

Effective June 1, 2024, this statute will be amended in two significant ways:

First, under the new language of subdivision 2a,  landlords may no longer seek eviction for conduct of a tenant, household member of the tenant, or a guest of the tenant that occurs off the premises or curtilage of the premises “unless (1) the conduct would constitute a crime of violence against another tenant, the tenant’s guest, the landlord, or the landlord’s employees, regardless of whether a charge was brought or condition contained or (2) the conduct results in a conviction of a crime of violence against a person unrelated to the premises.”

Second, subdivision 1(2)(c) has been added to address Minnesota’s legalization of recreational marijuana. Under this new subsection, landlords are no longer able to prohibit their tenants from possessing marijuana. However, landlords may still prohibit tenants from “smoking or vaping marijuana” on the property. Specifically, landlords can prohibit tenants from consuming cannabis products “by combustion or vaporization of the product and inhalation of smoke, aerosol, or vapor from the product.”

It is important to note that landlords can nevertheless be held liable for failing to enforce a lease that prohibits smoking and vaping cannabis under this same subsection. However, enforcement such a prohibition could prove to be difficult for many landlords without further legislative guidance.

504B.114: Pets Declawing and Vocalization Prohibited

Residential landlords may no longer advertise in a manner that discourages renters from applying for housing if their pets have not been declawed or devocalized. Residential landlords may also not discriminate or refuse to rent to persons based upon the pet’s declawed or devocalized status nor can they require a tenant’s pet be declawed or devocalized.

504B.120: Disclosure of Prohibited Fees

Landlords must disclose all “nonoptional fees” on the first page of the lease agreement moving forward. The new legislation does not, however, define “nonoptional fees.” Accordingly, landlords should err on the side of caution when describing any amounts tenants will be required to pay.

The first page of the lease agreement and any advertisements for the unit should therefore list the Total Monthly Payment and include both the total sum of the rent plus all nonoptional fees. Additionally, both the lease agreement and unit advertisements must disclose whether utilities are included in the rent amount.

504B.182: Initial and Final Inspections Required

Landlords are now required to give written notice to tenants of the option to request inspection of their unit both at the beginning and before the end of their tenancy. A tenant may request an inspection for the purpose of identifying existing deficiencies in the rental unit to avoid later deductions to the security deposit.

If requested, the move-in inspection must occur “within 14 days of the residential tenant occupying the unit” and the move-out inspection must occur earlier than “five days before the termination of the tenancy.”

While both the landlord and tenant may waive these inspections or agree to allow the landlord to provide photos or video of the unit in lieu of the move-in inspection, the landlord’s obligations under this statute cannot be discharged or waived under a lease provision.

504B.161: Implied Covenant of Habitability (Temperature)

For any rental unit that does not have an individual thermostat, the landlord is required to “supply or furnish heat at a minimum temperature of 68°F from October 1 through April 30.”

Like all covenants of habitability, the tenant cannot waive this requirement.

504B.375: Unlawful Exclusion or Removal

Previously, a tenant could only bring their landlord to court and petition for relief in emergency situations such as a loss of running water, hot water, heat, electricity, sanitary facilities, or other essential services or facilitates that the landlord was responsible for providing.

Under the updated provision, tenants can bring their landlord to court and petition for relief for all the previous reasons and the following additions:

• When a unit of government has revoked a rental license, issued a condemnation order, issued a notice of intent to condemn, or otherwise deemed the property uninhabitable;
• If there is a serious infestation;
• If the unit’s refrigerator is nonfunctioning;
• If the air conditioner is nonfunctioning, if applicable;
• If the elevator is not functioning, if applicable; and
• Any other conditions, services or facilitates that pose a serious and negative impact on health or safety.

504B.135: Terminating Tenancy at Will

Previously, if a tenant neglected or refused to pay rent due on a tenancy at will, the landlord had the option to terminate the tenancy upon a 14-day notice.

This language has been removed from the statute and what remains is that a tenancy at will may be terminated by notice “at least as long as the interval between the time rent is due or three months, whichever is less.”

504B.144: Early Renewal of Lease

This newly added statute will require a landlord to wait until “six months from the expiration of a current lease” before requiring a tenant to renew the lease if the lease is for a period of ten months or longer. Nevertheless, landlords may wait until closer to the expiration of the lease to ask a tenant to renew a lease.

504B.266: Termination of Lease upon Infirmity of Tenant

Tenants are now able to lawfully terminate their lease for medical reasons, provided they meet several qualifications, which include:

• A medical professional – a physician, an advanced practice registered nurse, or a mental health professional – must find that the tenant needs to move into a medical care facility;
• The tenant requires assistance with activities of daily living due to medical reasons or a disability;
• The tenant must necessitate the level of care provided by a nursing facility;
• The tenant has a disability or functional impairment in three or more areas, see Minn. Stat. 245.462, Subd. 11a, and due to their mental illness, their ability to be self-sufficient is greatly reduced; and
• The landlord is unable to provide an accessible unit in the same complex where the tenant currently resides within two months of the request that would meet the accessibility needs of the tenant.

To give notice to terminate the lease under this statute, the tenant must give at least two months written notice, to be effective on the last day of a calendar month, and it must be either hand-delivered or sent via U.S. mail, with prepaid, first-class postage.

The notice must also include a copy of the medical professional’s written documentation of the medical diagnosis and documentation showing that the tenant has been accepted as a resident or has a pending application at a location where the medical professional has indicated that the tenant needs to move to.

During this notice period, the tenant is still responsible for rent and any other regular fees and will be subject to the move-out procedures in the same way that they would be if their lease had run its full course.

Bottom Line:

It is imperative that Minnesota landlords thoroughly review and understand the recent changes made to Minnesota’s landlord-tenant statutes and make sure that they comply with these changes to avoid expensive or time-consuming mistakes.

For questions about these new legislative updates or other concerns regarding residential or commercial leasing, please contact a member of our Business & Commercial Litigation Practice Group.

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Is an HOA a “Reporting Company?” 

The CTA’s reporting requirements apply to a “reporting company,” which includes any corporation, limited liability company, and other similar entity created (for example) by filing a document with a secretary of state and registered to do business in the United States. Unless exempt under the CTA, an entity formed or registered to do business in the United States must file its “beneficial ownership information” within the specified timeframe. In most cases, an HOA will likely be considered a reporting company and will be required to file a report with FinCEN pursuant to the CTA.

Will an HOA Be Exempt from Reporting?

In most cases, an HOA will not be exempt from the reporting requirements under the CTA. That is, most HOAs are not within one of the three following categories of exempt entities: (i) certain charitable organizations created pursuant to the applicable section of the Internal Revenue Code (the “Code”), (ii)  certain tax-exempt political organizations created pursuant to the Code, and (iii) certain trusts created pursuant to the Code.

What Information Must Be Identified in The Report?

A reporting company must provide to FinCEN: (a) its full legal name; (b) any trade name or assumed name; (c) address of its current principal place of business in the United States or the street address of its primary business location in the United States; (d) the jurisdiction of formation or registration; and (e) U.S. federal tax identification number or a tax identification number issued by a foreign jurisdiction and the name of such jurisdiction.

The report must also identify each “beneficial owner” and each “company applicant” by: (a) full legal name; (b) date of birth; (c) current residential or business street address; and (d) a scanned copy of an acceptable identification document (e.g., driver’s license or nonexpired passport).

A “beneficial owner” is an individual exercising “substantial control” over the reporting company (HOA) or who owns or controls at least 25% of the ownership interest in the reporting company (HOA). An individual exercises “substantial control” if the individual meets any of the following general criteria: (a) the individual is a senior officer (e.g., chief executive officer, chief financial officer, secretary, general counsel, etc.); (b) the individual has authority to appoint or remove certain officers or a majority of directors of the reporting company; (c) the individual is an important decision-maker; or (d) the individual has any other form of substantial control over the reporting company.

A “company applicant” is an individual who files the applicable formation or registration documentation of the entity (HOA) with a secretary of state or other similar office. If another individual directs or controls the filing of such documentation, that individual must also be listed as a company applicant. Company applicants are required to be reported only if the entity is formed or first registered to do business in the United States on or after January 1, 2024.

What Should an HOA Do Before January 1, 2024?

While specific preparations may vary by HOA, an HOA should familiarize itself with the CTA reporting requirements. An HOA should identify each individual within its organization who may be considered a “beneficial owner” and collect current contact information for each “beneficial owner.” An HOA should also develop a record-keeping process to collect, store, monitor, and track information required for the CTA reporting and filing obligations.

Questions? Advice?

If an HOA has questions, or is seeking advice, about the CTA, the HOA’s requirements for reporting under the CTA, or any other matters regarding the HOA, please contact the following attorneys in our office:

Kali Dahlquist – E-mail: kdahlquist@felhaber.com; phone: 612.373.8537

Fred Krietzman – E-mail: fkrietzman@felhaber.com; phone: 612.373.8418

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In addition to the firm’s state-wide rankings, five of our attorneys earned individual recognition as notable practitioners:

Labor & Employment 

Paul Zech, Band 1

Sara McGrane, Band 2

Penny Phillips, Band 2

Real Estate

Mark Radke, Band 4

Steve Yoch, Band 4

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US News – Best Lawyers® “Best Law Firm” rankings are based on a thorough review of client and lawyer evaluations, peer review and data provided by the law firms being evaluated. A law firm must also have at least one attorney named to the Best Lawyers in America® list in that practice area and metropolitan area.

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In addition to the firm’s state-wide rankings, four of our attorneys earned individual recognition as notable practitioners:

Labor & Employment 

Paul Zech, Band 1

Sara McGrane, Band 2

Penny Phillips, Band 2

Real Estate

Mark Radke, Band 4

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