Minn. Stat. » CHAPTER 559. ADVERSE CLAIMS TO REAL PROPERTY
Minnesota Statutes

Minn. Stat. § 559.17 (2026)

Mortgage Not A Conveyance; Mortgagee Cannot Possess

✓ current as of May 2026
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Subdivision 1.Enforcement of rent assignment.

A mortgage of real property is not to be deemed a conveyance, so as to enable the owner of the mortgage to recover possession of the real property without a foreclosure, except as permitted in subdivision 2. The enforcement of an assignment of rents of the type described in subdivision 2 shall not be deemed prohibited by this subdivision, nor because a foreclosure sale under the mortgage has extinguished all or part of the mortgage debt.

Subd. 2.Assignment; conditions.

A mortgagor may assign, as additional security for the debt secured by the mortgage, the rents and profits from the mortgaged real property, if the mortgage:

(1) was executed, modified or amended subsequent to August 1, 1977;

(2) secured an original principal amount of $100,000 or more or is a lien upon residential real estate containing more than four dwelling units; and

(3) is not a lien upon property which was:

(i) entirely homesteaded as agricultural property; or

(ii) residential real estate containing four or fewer dwelling units where at least one of the units is homesteaded. The assignment may be enforced, but only against the nonhomestead portion of the mortgaged property, as follows:

(a) if, by the terms of an assignment, a receiver is to be appointed upon the occurrence of some specified event, and a showing is made that the event has occurred, the court shall, without regard to waste, adequacy of the security, or solvency of the mortgagor, appoint a receiver who shall, with respect to the excess cash remaining after application as provided in section 576.25, subdivision 5, apply it as prescribed by the assignment. If the assignment so provides, the receiver shall apply the excess cash in the manner set out herein from the date of appointment through the entire redemption period from any foreclosure sale. Subject to the terms of the assignment, the receiver shall have the powers and duties as set forth in section 576.25, subdivision 5; or

(b) if no provision is made for the appointment of a receiver in the assignment or if by the terms of the assignment a receiver may be appointed, the assignment shall be binding upon the assignor unless or until a receiver is appointed without regard to waste, adequacy of the security or solvency of the mortgagor, but only in the event of default in the terms and conditions of the mortgage, and only in the event the assignment requires the holder thereof to apply the rents and profits received as provided in section 576.25, subdivision 5, or, as to an assignment executed prior to August 1, 2012, as provided in Minnesota Statutes 2010, section 576.01, subdivision 2, in which case the same shall operate against and be binding upon the occupiers of the premises from the date of recording by the holder of the assignment in the office of the county recorder or the office of the registrar of titles for the county in which the property is located of a notice of default in the terms and conditions of the mortgage and service of a copy of the notice upon the occupiers of the premises. The holder of the assignment shall apply the rents and profits received in accordance with the terms of the assignment, and, if the assignment so provides, for the entire redemption period from any foreclosure sale. A holder of an assignment who enforces it in accordance with this clause shall not be deemed to be a mortgagee in possession with attendant liability.

Nothing contained herein shall prohibit the right to reinstate the mortgage debt granted pursuant to section 580.30, nor the right to redeem granted pursuant to sections 580.23 and 581.10, and any excess cash, as that term is used herein, collected by the receiver under clause (a), or any rents and profits taken by the holder of the assignment under clause (b), shall be credited to the amount required to be paid to effect a reinstatement or redemption.

Subd. 3.Expiration, satisfaction, release, and assignment.

(a) An assignment of rents and profits under this section, whether in the mortgage or in a separate instrument, shall expire:

(1) with respect to the rents and profits from all of the mortgaged property, when an action or proceeding to foreclose the mortgage is barred by section 541.03, or upon recording in the office of the county recorder or in the office of the registrar of titles of the county where the mortgaged property is located, of a satisfaction of the mortgage or a certificate of release complying with section 507.401 in lieu of a satisfaction of the mortgage; or

(2) with respect to the rents and profits from a portion of the mortgaged property, upon recording in the office of the county recorder or the registrar of titles of the county where that portion of the mortgaged property is located, of a release of that portion of the mortgaged property from the lien of the mortgage, or a certificate of release complying with section 507.401 in lieu of a release of that portion of the mortgaged property.

No separate reassignment of the rents and profits or satisfaction or release of the assignment is required.

(b) An assignment of a mortgage, whether or not the mortgage mentions an assignment of rents and profits, is sufficient to assign both the mortgage and the assignment of rents and profits permitted by this subdivision which secures the debt secured by the mortgage, and no separate assignment of the assignment of rents and profits shall be required.

Notes of Decisions
Cited in 31 cases, 1943–2016 · leading case: Bank Midwest, Minnesota, Iowa, N.A. v. Lipetzky, 674 N.W.2d 176 (Minn. 2004).
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Bank Midwest, Minnesota, Iowa, N.A. v. Lipetzky, 674 N.W.2d 176 (Minn. 2004). · cites it 10× “but, relying on Minn.Stat. § 559.17, subd. 1 (2002), determined that a mortgage is not a conveyance.”
New York Life Ins. v. Bremer Towers, 714 F. Supp. 414 (D. Minn. 1989). · cites it 18× “First, it claims that its security interest in the rents is perfected because of the recording of the Assignment and the operation of Minn.Stat. § 559.17. As a fallback position, it claims that even if its interest in the rents was unperfected at the time of the bankruptcy…”
Capital Realty Inv. Tax Exempt Fund Ltd. P'ship v. Greenhaven Vill. Apts. of Burnsville Phase II Ltd. P'ship (In Re Greenhaven Vill. Apts. of Burnsville Phase II Ltd. P'ship), 100 B.R. 465 (Bankr. D. Minn. 1989). · cites it 15× “Greenhaven asserts that Minn.Stat. § 559.17, subd. 2 enunciates the procedures for perfection of an assignment of rents.”
Nw. Nat'l Life Ins. v. Metro Square (In Re Metro Square), 93 B.R. 990 (Bankr. D. Minn. 1988). · cites it 14× “It had not commenced foreclosure proceedings, had not applied to a court for the appointment of a receiver, had not filed any statement of default under Minn.Stat. § 559.17, subd. 2(3)(b), and had not taken possession of the property for the purpose of collecting the rents, nor…”
Carlson v. Lilyerd, 449 N.W.2d 185 (Minn. Ct. App. 1989). · cites it 12× “Under Minn.Stat. § 559.17, subd. 1 (1984): A mortgage of real property is not to be deemed a conveyance, so as to enable the owner of the mortgage to recover possession of the real property without a foreclosure, except as provided in subdivision 2 [regarding assignment of rents…”
Nw. Nat'l Life Ins. Co. v. Metro Square (In Re Metro Square), 106 B.R. 584 (D. Minn. 1989). · cites it 10× “6 The *587 bankruptcy court determined that the statute required an assignee of rents to take some affirmative post-default action in order to perfect its security interest: [I]t is clear from [the language in the statute] that a mortgagee may now obtain possession of the rents…”
In Re Pavilion Place Assocs., 89 B.R. 36 (Bankr. D. Minn. 1988). · cites it 7× “§ 559.17 an assignment of real estate rents is fully created, or at least perfected, only upon the assignees’ compliance with Subd.”
In Re Marion Street P'ship, 108 B.R. 218 (Bankr. D. Minn. 1989). · cites it 4× “It is obvious that the debtor cannot operate one day unless this Court makes permanent its earlier interim order allowing the debtor use of cash collateral under the foregoing terms and conditions pending the issuance of this Memorandum Order.”
Bank Midwest, Minnesota, Iowa, N.A. v. Lipetzky, 661 N.W.2d 290 (Minn. Ct. App. 2003). · cites it 12× “But this finding ignores Minn.Stat. § 559.17, subd. 1 (2002), providing that: A mortgage of real property is not to be deemed a conveyance, so as to enable the owner of the mortgage to recover possession of the real property without a foreclosure * * *.”
Travelers Ins. v. Westridge Mall Co., 826 F. Supp. 289 (D. Minn. 1992). · cites it 5× “Second, Westridge contends even if the assignment of rents is valid that Travelers failed to serve notice pursuant to Minn.Stat. 559.17. Third, Westridge asserts that it be allowed to pay for its attorneys’ fees from the escrowed rents.”
G.G.C. Co. v. First Nat'l Bank of St. Paul, 287 N.W.2d 378 (Minn. 1979). · cites it 3× “17 to make assignment-of-rents clauses enforceable without requiring that a separate and subsequent consideration be given: “A mortgage of real property is not to be deemed a conveyance, so as to enable the owner of the mortgage to recover possession of the real property without…”
State v. Zacher, 504 N.W.2d 468 (Minn. 1993). · cites it 2× “See Minn.Stat. § 559.17 (1992) (specifically providing that an assignment of rents can be enforced after a foreclosure in some circumstances.”
Show all 31 citing cases →
Minn. Stat. § 559.17(1): 1 case
Young v. Embley, 143 P.3d 936 (Alaska 2006).
Minn. Stat. § 559.17(2): 1 case
New York Life Ins. v. Bremer Towers, 714 F. Supp. 414 (D. Minn. 1989). “First, it claims that its security interest in the rents is perfected because of the recording of the Assignment and the operation of Minn.Stat. § 559.17. As a fallback position, it claims that even if its interest in the rents was unperfected at the time of the bankruptcy…”
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