02-25-2015 Council Packet - Laserfiche WebLink

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RELEVANT LINKS: Minn. Stan. y 65A.i0. sulxi. I6. 61i nn. Slnl. 4 65; SO, • bd.3 1hun. Sva. 65 A.S(I, suhd, 3, \tum. Sou. i 65A.50, nlbA. 4. Abun. Slat. E 65A.50, sulci 5, \I inn. Ani. 4 65A.S0, sitbd, .i, o A statement that the city may have the withheld amount paid into a trust or escrow account established for the purposes of this section if it shows cause within 30 days that the money should be withheld to protect [he public health and safety; otherwise, the withheld amount shall be paid to the insured at the expiration of 30 days. o An explanation of the provisions of this section and a verbatim reproduction of the statutory subdivision regarding exceptions to withholding. In order for the city to put the withheld funds into its escrow or trust account and retain the funds, the chief fire official or other authorized city representative must prepare an affidavit that says that the insured's damaged structure violates specified health and safety standards, and this requires the escrow of the withheld amount as surety for the repair, replacement, of removal of the damaged structure. This affidavit constitutes cause for escrowing the withheld amount. Where there is a settlement on the insurance claim, the affidavit must be sent to the insurer, the insured, and any banks or lenders who hold a mortgage on the property. Once the insurer receives the affidavit, the insurer must forward the withheld amount to the city treasurer. The insurer must also provide notice of the lorwardiug of funds to the insured and any hank or lender that holds a mortgage on the property. If there was a court judgment on the insurance claim, the affidavit and notice of forwarding the funds must also be given 10 the court that entered the, judgment. When the city receives the withheld funds from the insurance company, the city treasurer must record the information and the date the money was received. The treasurer must immediately deposit the money into the established trust or escrow account. Money deposited into the account must not be commingled with city funds. The account may be interest -hearing. Any interest earned on money placed in a trust or escrow account shall be retained by the municipality to defray expenses incurred under this section. 2. Releasing funds from the account Once the money is in the city trust or escrow account, there are several situations that trigger releasing those funds. a. Releasing funds to bank or lender If the mortgage on the insured property is in default, the hank or lender who holds that mortgage may make a written request to the city for the funds. Not later than 10 days after receiving the written request, the treasurer must release any or all of the proceeds to the extent necessary to satisfy the outstanding mortgage. I. eague of Minnesola Cities Information Memo: 6/24/2013 Dangerous Properties Page e 7