All Roll Calls
Yes: 185 • No: 1
North DakotaSB 21222025 Regular SessionSenate
AN ACT to create and enact chapter 32-10.1 and a new section to chapter 32-19.2 of the North Dakota Century Code, relating to the Uniform Commercial Real Estate Receivership Act and trustees for commercial buildings during foreclosures; to provide for a legislative management study; and to provide for application.
Sponsored By: Senate Industry and Business
Signed by Governor
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Bill Overview
Analyzed Economic Effects
7 provisions identified: 1 benefits, 0 costs, 6 mixed.
Renters gain protection for home leases
A receiver cannot reject an unexpired lease for a tenant’s main home when someone other than the mortgage lender requested appointment. When the lender requested appointment, the lease must meet at least one added protection. It must outrank the mortgage, have an enforceable occupancy agreement, or have the lender’s consent. A commercially reasonable lease also qualifies if the tenant did not know it violated the mortgage.
Courts assign property management costs
Courts can pay reasonable, necessary receiver fees and expenses from property under court management. If that property is insufficient, the court can require the person who requested appointment to pay. A person whose conduct justified appointment can also owe fees and expenses, including legal fees and costs. Courts can end a receivership that was improperly ordered or is no longer needed. If appointment was sought wrongfully or in bad faith, the requester can owe fees, costs, and actual damages.
Courts can take over troubled properties
District courts can appoint receivers before or after judgment, or during a property redemption period. Before judgment, the requester must show an apparent property interest and risk of loss, waste, damage, or improper transfers. Mortgage-case grounds include protecting property, an owner’s signed agreement, insufficient collateral, withheld rents or proceeds, or a lower-priority lienholder’s request. Courts generally must provide notice and a hearing opportunity, except in emergencies. Receivers can collect rent, run property businesses, and handle ordinary operations. Court approval is required for major borrowing, improvements, transfers outside normal business, and adopting or rejecting unfinished contracts. Appointment generally pauses possession efforts and enforcement of earlier liens, with exceptions including the requester’s foreclosure and government regulatory actions. Owners must cooperate and turn over property; knowing violations can bring damages, legal fees, and contempt penalties.
Creditors face property claim deadlines
Receivers gain legal status as lien creditors over covered real estate, personal property, and fixtures when appointed. Creditors generally receive direct notice and published notice, with at least 90 days after whichever comes later to file claims. Claims need creditor details, the amount and basis, any collateral, supporting records, and a signature under penalty of perjury. Late claims generally receive no payment unless the court orders otherwise. Courts can simplify notice and claims when property likely cannot cover creditors with perfected liens. Claims for rejected-contract damages are due by the later of the claims deadline or 30 days after court-approved rejection. Court-approved sales can remove lower-priority liens, which move to the proceeds; existing payment-priority rules still apply. Good-faith buyers generally keep their purchase despite a later reversal unless the sale order was stayed before transfer.
New rules cover commercial property disputes
North Dakota creates a uniform system for court-managed real estate, called receivership, including related equipment and other property. Properties with one to four homes are generally excluded. Exceptions cover business, farming, industrial or mineral uses, planned multiunit development businesses, and rent collected from non-affiliates. Some government-related cases are also excluded. Covered cases use the new chapter, not the separate commercial-building foreclosure trustee rules. Receivers appointed before the law’s effective date remain under the prior rules. Legislative Management must study existing receivership laws for possible consolidation and report to the seventieth legislative assembly.
Receivers face safeguards and lawsuit protections
Proposed receivers must swear they have no disqualifying ties, financial conflicts, debts, or ownership interests involving a party. Exceptions cover specified unrelated work, qualifying personal debts, and bank accounts. Receivers generally must post a court-approved bond or other security, though courts can allow them to start sooner. Receivership property cannot serve as alternative security, and bond or security claims must be made within 12 months after discharge. Receivers must keep records and submit interim and final reports; hired professionals need court approval and conflict disclosures. Receivers keep existing legal defenses and immunities for work within their appointment. Anyone seeking to sue a receiver personally over property administration needs the appointing court’s approval.
Lenders keep rights to unpaid debt
Requesting a receiver, obtaining appointment, or applying property proceeds to a loan does not itself limit the lender’s enforcement rights. These actions do not make the lender the property’s manager or the owner’s agent. They generally do not block a deficiency judgment—a court order to pay debt left after the property is sold. After a receiver sells property free of a lien, collection of remaining debt still follows North Dakota’s other deficiency-judgment laws.
Sponsors & Cosponsors
Sponsor
Senate Industry and Business
Affiliation unavailable
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
Senate vote • 3/18/2025
Second reading, passed, yeas 45 nays 1
Yes: 45 • No: 1
House vote • 3/10/2025
Second reading, passed as amended, yeas 93 nays 0
Yes: 93 • No: 0
Senate vote • 1/16/2025
Second reading, passed, yeas 47 nays 0
Yes: 47 • No: 0
Actions Timeline
Filed with Secretary Of State 03/25
3/26/2025HouseSigned by Governor 03/24
3/24/2025SenateSent to Governor
3/21/2025SenateSigned by President
3/21/2025SenateSigned by Speaker
3/20/2025HouseSecond reading, passed, yeas 45 nays 1
3/18/2025SenateConcurred
3/18/2025SenateReturned to Senate (12)
3/11/2025SenateSecond reading, passed as amended, yeas 93 nays 0
3/10/2025HouseAmendment adopted, placed on calendar
3/7/2025HouseReported back amended, do pass, amendment placed on calendar 11 0 2
3/7/2025HouseCommittee Hearing 03:00
3/5/2025HouseIntroduced, first reading, referred Industry, Business and Labor Committee
2/13/2025HouseReceived from Senate
1/17/2025HouseSecond reading, passed, yeas 47 nays 0
1/16/2025SenateReported back, do pass, place on calendar 5 0 0
1/15/2025SenateCommittee Hearing 09:30
1/13/2025SenateIntroduced, first reading, referred Industry and Business Committee
1/7/2025Senate
Bill Text
Enrollment
INTRODUCED
Prepared by the Legislative Council staff for Representative Klemin
SENATE BILL NO. 2122 with House Amendments
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