Contract for Deed (Land Contract) - Minnesota

CONTRACT FOR DEED

(State of Minnesota — Minn. Stat. § 559.21)

RECORDING INFORMATION

After Recording Return To:
[NAME]
[ADDRESS]

Drafted By:
[NAME OF DRAFTER]
Minnesota Attorney Reg. No. [______]

TABLE OF CONTENTS

1. Parties and Recitals
2. Definitions
3. Property; Legal Description
4. Purchase Price, Down Payment, and Installment Terms
5. Title; Deed Held Pending Payoff; Escrow
6. Possession
7. Taxes, Insurance, and Maintenance
8. Seller Covenants; Recording Duty; Senior Lien
9. Default and Statutory Cancellation (§ 559.21); Reinstatement
10. Prepayment
11. Risk of Loss; Condemnation
12. Recording (§ 507.235)
13. Assignment
14. Due-on-Sale / Garn-St. Germain
15. Required Disclosures; Investor-Seller / Cooling-Off (ch. 559A)
16. General Provisions
17. Execution and Acknowledgment
18. Exhibit A — Legal Description

1. PARTIES AND RECITALS

This CONTRACT FOR DEED (this "Contract") is made as of [__/__/____] (the "Effective Date") by and between:

• Seller (Vendor): [SELLER LEGAL NAME], of [________________________________] ("Seller"); and
• Purchaser (Vendee): [PURCHASER LEGAL NAME], of [________________________________] ("Purchaser").

Recitals

A. Seller holds fee simple title to the real property on Exhibit A (the "Property").
B. Seller agrees to sell and Purchaser agrees to buy the Property on installments, with Seller retaining legal title as security and Purchaser receiving possession and equitable title.
C. The Parties intend this Contract as a contract for deed under Minnesota law, subject to cancellation under Minn. Stat. § 559.21.

NOW, THEREFORE, the Parties agree as follows:

2. DEFINITIONS

"Applicable Law" — all federal and Minnesota laws applicable to the Property or this transaction, including Minn. Stat. §§ 559.21, 507.235, and ch. 559A.
"Investor Seller" — a seller as defined in Minn. Stat. § 559A.01, subd. 5 (triggers 90-day cancellation and additional disclosure/cooling-off duties).
"Purchase Price" — the total price in Section 4.
"Residential Property" — as defined in Minn. Stat. § 507.235, subd. 1a(e).
"Unpaid Balance" — the Purchase Price less the Down Payment and all principal payments credited.

3. PROPERTY; LEGAL DESCRIPTION

3.1 Property. [PROPERTY ADDRESS], [CITY], [COUNTY] County, Minnesota, legally described on Exhibit A, with all improvements, easements, and appurtenances.

3.2 Property Type / Statutory Statement. [CHECK ONE]
☐ The Property is residential property (ch. 559A and § 507.235 residential duties apply).
☐ The property is not residential property. (Statement included as prima facie evidence under § 559.21, subd. 9, that the residential recording-cancellation bar does not apply.)

3.3 Tax Parcel / PID: [________________________________]. ☐ Abstract ☐ Torrens (Certificate No. [______]).

4. PURCHASE PRICE, DOWN PAYMENT, AND INSTALLMENT TERMS

4.1 Purchase Price: $[____].

4.2 Down Payment: $[____] at execution.

4.3 Financed Balance: $[____], bearing interest at [____]% per annum.

4.4 Installments. Purchaser shall pay $[____] per month on the [____] day of each month, beginning [__/__/____], until paid in full or the maturity/balloon date of [__/__/____].

4.5 Payment Schedule.

4.6 Application of Payments. First to late charges, then accrued interest, then principal.

4.7 Balloon Disclosure. ☐ This Contract contains a balloon payment of $[____] due [__/__/____]. (Investor sellers must specifically highlight all balloon payments per ch. 559A.)

5. TITLE; DEED HELD PENDING PAYOFF; ESCROW

5.1 Retention of Legal Title. Seller retains legal title as security; Purchaser holds equitable title and possession.

5.2 Deed Upon Payoff. Upon full payment and performance, Seller shall deliver a ☐ warranty deed ☐ limited warranty deed conveying marketable title, subject only to Permitted Encumbrances on Exhibit A.

5.3 Deed Escrow (optional). [CHECK ONE]
☐ The Parties deposit an executed deed with [ESCROW AGENT], released to Purchaser at payoff or to Seller only after a completed statutory cancellation.
☐ No escrow; Seller delivers the deed at payoff.

6. POSSESSION

Purchaser is entitled to exclusive possession on [__/__/____] and shall retain possession unless and until this Contract is cancelled under Minn. Stat. § 559.21.

7. TAXES, INSURANCE, AND MAINTENANCE

7.1 Taxes. Purchaser shall pay all property taxes and assessments before delinquency. Seller represents all real estate taxes due as of the Effective Date are paid (required for residential contracts under § 507.235, subd. 1a).
7.2 Insurance. Purchaser shall maintain fire/hazard insurance of at least $[____], naming Seller as additional insured/loss payee.
7.3 Maintenance. Purchaser shall keep the Property in good repair, free of waste, and in compliance with Applicable Law.

8. SELLER COVENANTS; RECORDING DUTY; SENIOR LIEN

8.1 Recording Duty (residential). If the Property is residential, Seller shall pay any delinquent real estate taxes and record this Contract within four (4) months of execution as required by Minn. Stat. § 507.235, subd. 1a. Failure to record (without a good-faith effort) bars Seller from using statutory cancellation under § 559.21 (§ 559.21, subd. 4b).

8.2 Senior Lien (disclose). ☐ None. ☐ The Property is subject to a senior [mortgage] held by [LENDER], balance approximately $[____]. Seller covenants to keep it current and apply Purchaser's payments toward it. (Investor sellers must address any due-on-sale clause and obtain lender consent/waiver per ch. 559A.)

9. DEFAULT AND STATUTORY CANCELLATION (§ 559.21); REINSTATEMENT

9.1 Events of Default. Purchaser is in default upon (a) failure to pay an installment when due; (b) failure to pay taxes/insurance; (c) waste; or (d) breach of any other material covenant.

9.2 Exclusive Statutory Cancellation Procedure. Seller's remedy on Purchaser's default is statutory cancellation under Minn. Stat. § 559.21. Seller shall serve upon Purchaser a Notice of Cancellation in the statutory form (§ 559.21, subd. 3), served in the same manner as a district court summons.

9.3 Cancellation Period (this Contract — executed on/after 8/1/1985). Under § 559.21, subd. 2a, the Contract terminates 60 days after service of the Notice of Cancellation, unless before the termination date Purchaser reinstates by:

1. complying with (curing) the conditions in default;
2. making all payments that become due to Seller after the notice was served;
3. paying the costs of service of the notice;
4. paying 2% of the amount in default (not including the final balloon payment, any taxes, assessments, mortgages, or prior contracts assumed by Purchaser); and
5. paying the amount specified by § 559.21, subd. 2a(5), toward attorneys' fees actually expended or incurred, only if some part of the default existed for at least 30 days before service of the notice: $1,000 for a contract executed on or after August 1, 2024; $250 if the amount in default is under $1,000, or $500 if it is $1,000 or more, for a contract executed from August 1, 1999 through July 31, 2024; or $125 if the amount in default is under $750, or $250 if it is $750 or more, for a contract executed from August 1, 1985 through July 31, 1999.

9.4 Shorter / Longer Periods.

• Earnest-money / purchase agreements / exercised options: 30 days (§ 559.21, subd. 4(a)(1)) or cancellation under § 559.217.
• Investor-seller contracts: 90 days (§ 559.21, subd. 4(a)(2)), and Seller must first have given Purchaser a 30-day pre-notice of the default conditions by certified mail before serving the Notice of Cancellation (§ 559.21, subd. 4(f)).
• Service by publication (purchaser absent/nonresident): 90 days from first publication.

9.5 Termination on Failure to Reinstate. If Purchaser fails to satisfy subd. 4(c) within the period, the Contract terminates; Purchaser loses the money paid, the right to possession, and may lose claims/defenses, and may be evicted (§ 559.21, subd. 3 statutory warning).

9.6 Transfers That Bar Cancellation. No cancellation may be given for certain transfers of residential property (e.g., transfer-on-death, joint-tenant death, transfer to spouse/children, dissolution, or inter vivos trust where Purchaser remains beneficiary) per § 559.21, subd. 4a.

9.7 Judicial Termination Preserved. Nothing herein bars judicial termination of the Contract (§ 559.21, subd. 4b(b)).

9.8 Purchaser's Right to Seek Suspension. The statutory cancellation notice tells Purchaser that Purchaser may seek a county or district court order suspending termination until asserted claims or defenses are resolved (§ 559.21, subd. 3). Subdivision 8 governs service in an action to restrain termination.

9.9 Purchaser's Remedies. On Seller's default, Purchaser may seek specific performance, damages, or other relief.

10. PREPAYMENT

Purchaser may prepay all or part of the Unpaid Balance at any time without penalty. Upon prepayment in full, Seller shall promptly deliver the deed and a satisfaction.

11. RISK OF LOSS; CONDEMNATION

11.1 Risk of Loss. From possession, risk of loss passes to Purchaser; insurance proceeds applied to restoration or, at Purchaser's election if not in default, to the Unpaid Balance.
11.2 Condemnation. Awards applied first to the Unpaid Balance, balance to Purchaser.

12. RECORDING (§ 507.235)

12.1 Recording. This Contract shall be recorded with the County Recorder or Registrar of Titles for [COUNTY] County. Under Minn. Stat. § 507.235, a contract for deed for residential real property must be recorded within four (4) months of execution; the duty is the Seller's, and failure bars statutory cancellation (§ 559.21, subd. 4b).

12.2 Acknowledgment. This Contract is acknowledged below so it may be recorded.

13. ASSIGNMENT

13.1 By Purchaser. Only with Seller's prior written consent, not unreasonably withheld; no assignment releases Purchaser absent a written novation.
13.2 By Seller. Seller may assign its vendor's interest subject to this Contract and the § 559.21 protections.

14. DUE-ON-SALE / GARN-ST. GERMAIN

14.1 If a senior mortgage contains a due-on-sale clause, this Contract may trigger acceleration. The Garn-St. Germain Act, 12 U.S.C. § 1701j-3, exempts certain transfers, but an installment land contract transferring occupancy is generally not exempt.

14.2 Seller represents: ☐ no senior lien with a due-on-sale clause; ☐ lender consent/waiver obtained (required of investor sellers under ch. 559A); ☐ Purchaser advised of and accepts the acceleration risk.

15. REQUIRED DISCLOSURES; INVESTOR-SELLER / COOLING-OFF (ch. 559A)

15.1 Seller's Property Disclosure. Seller has delivered the disclosure required by Minn. Stat. §§ 513.52-513.60 (or a permitted disclosure alternative). ☐ Provided ☐ Exempt.

15.2 Investor-Seller Disclosures (residential). If Seller is an "investor seller" (§ 559A.01, subd. 5) and the Property is residential, Seller has, at least 10 days before execution, provided Purchaser the detailed statutory disclosure (highlighting all balloon payments and Seller's acquisition cost), an amortization schedule, and a non-waivable 10-day cooling-off period during which Purchaser may terminate at no cost (Minn. Stat. ch. 559A). ☐ Applies ☐ Not an investor-seller / not residential.

15.3 Lead-Based Paint (pre-1978). For covered target housing, Seller has provided the EPA pamphlet, a completed lead disclosure, known reports, and the federally required risk-assessment opportunity (42 U.S.C. § 4852d; 24 C.F.R. Part 35). ☐ Applies ☐ Not covered or exempt — N/A.

15.4 Wells. Before signing this Contract, Seller has delivered the written well disclosure attached below, identifying the status and location of every well known to Seller or stating that Seller knows of none (Minn. Stat. § 103I.235, subd. 1(a)). At delivery of the deed under this Contract, Purchaser shall sign the required well disclosure certificate, or, if Purchaser knows of no wells, sign the statutory grantee certification on the deed. If a prior well disclosure certificate was filed and the status and number of wells are unchanged, the applicable person may instead make the certification permitted by § 103I.235, subd. 1(i). ☐ Disclosure attached ☐ Transfer excluded under § 103I.235, subd. 1(e).

15.5 Right to Counsel. Purchaser is advised to obtain independent Minnesota counsel, a title examination, and title insurance before signing.

16. GENERAL PROVISIONS

16.1 Governing Law. Minnesota law governs.
16.2 Entire Agreement; Amendment; Waiver. Entire agreement; amendments only in signed writing.
16.3 Severability. Invalid provisions reformed minimally; remainder in effect. Statutory protections under § 559.21 and ch. 559A control over conflicting provisions.
16.4 Notices. In writing, certified mail/overnight courier/hand delivery to Section 1 addresses.
16.5 Time of Essence. Time is of the essence.
16.6 Counterparts; Electronic Signatures. Permitted under the Minnesota Uniform Electronic Transactions Act.

17. EXECUTION AND ACKNOWLEDGMENT

IN WITNESS WHEREOF, the Parties execute this Contract as of the Effective Date.

SELLER:
________________________________
[SELLER NAME] — Date: [__/__/____]

PURCHASER:
________________________________
[PURCHASER NAME] — Date: [__/__/____]

[Add spouse signature if homestead/marital interest exists.]

Notary Acknowledgment — Minnesota

STATE OF MINNESOTA, COUNTY OF [____]

This instrument was acknowledged before me on [__/__/____] by [NAME(S)].

________________________________
Notary Public
My commission expires: [__/__/____]

18. EXHIBIT A — LEGAL DESCRIPTION

[INSERT FULL LEGAL DESCRIPTION — Abstract or Torrens (include Certificate of Title No.), county, PID. List Permitted Encumbrances.]

SELLER'S WELL DISCLOSURE — ATTACH BEFORE SIGNING

Property and county: [PROPERTY ADDRESS AND COUNTY]

Seller states: ☐ Seller knows of no wells on the Property. ☐ Seller knows of the wells listed below. The attached map, drawn from available information, shows each well's location to the extent practicable.

Legal description: [INSERT LEGAL DESCRIPTION OR REFER TO ATTACHED EXHIBIT A]

Seller signature: [________________________________] Date delivered: [__/__/____]

Purchaser acknowledges receipt before signing this Contract: [________________________________] Date received: [__/__/____]

FEDERAL LEAD WARNING AND DISCLOSURE ATTACHMENT

Property: [________________________________________________]

LEAD WARNING STATEMENT

Every purchaser of any interest in residential real property on which a residential dwelling was built prior to 1978 is notified that such property may present exposure to lead from lead-based paint that may place young children at risk of developing lead poisoning. Lead poisoning in young children may produce permanent neurological damage, including learning disabilities, reduced intelligence quotient, behavioral problems, and impaired memory. Lead poisoning also poses a particular risk to pregnant women. The seller of any interest in residential real property is required to provide the buyer with any information on lead-based paint hazards from risk assessments or inspections in the seller's possession and notify the buyer of any known lead-based paint hazards. A risk assessment or inspection for possible lead-based paint hazards is recommended prior to purchase.

Seller disclosure: ☐ Seller knows of lead-based paint or lead-based-paint hazards: [DESCRIBE BASIS, LOCATION, AND CONDITION: ________________________________] ☐ Seller has no knowledge of lead-based paint or lead-based-paint hazards.

Records and reports provided to Buyer: [LIST EACH AVAILABLE LEAD-HAZARD RECORD OR REPORT PROVIDED: ________________________________] ☐ Seller has no such records or reports available.

Buyer acknowledgment: By signing below, Buyer acknowledges receipt of Seller's disclosure and the records or reports listed above, and receipt of the federally approved lead-hazard information pamphlet. Buyer also states that Buyer has read the Lead Warning Statement and understands its contents.

Inspection opportunity: Buyer ☐ received a 10-day opportunity to conduct a lead risk assessment or inspection before becoming obligated under this Contract; ☐ received a different period mutually agreed in writing: [____] days; or ☐ waives that opportunity.

Seller's agent certification, if an agent is involved: I informed Seller of Seller's obligations under 42 U.S.C. § 4852d and am aware of my duty to ensure compliance with the federal lead-disclosure requirements.

Agent name (repeat for each involved agent): [________________________________] Agent signature: [________________________________] Date: [__/__/____]

By signing, Seller, any involved agent, and Buyer certify the accuracy of their statements to the best of their knowledge.

Seller signature (repeat for each seller): [________________________________] Date: [__/__/____]

Buyer signature (repeat for each purchaser): [________________________________] Date: [__/__/____]

Seller and any involved agent must retain a copy of the completed attachment for at least three years from completion of the sale under 40 C.F.R. § 745.113(c)(1).

Sources and References

• Minn. Stat. § 559.21 — Contract termination; notice; service; costs; conditions: https://www.revisor.mn.gov/statutes/cite/559.21
• Minn. Stat. § 507.235 — Recording of contracts for deed: https://www.revisor.mn.gov/statutes/cite/507.235
• Minn. Stat. § 559.217 — Cancellation of purchase agreements: https://www.revisor.mn.gov/statutes/cite/559.217
• Minn. Stat. ch. 559A — Residential contracts for deed (investor-seller; cooling-off): https://www.revisor.mn.gov/statutes/cite/559A
• Minn. Stat. §§ 513.52-513.60 — Seller's property disclosure: https://www.revisor.mn.gov/statutes/cite/513.52
• Minn. Stat. § 103I.235, subd. 1 — Well disclosure before signing and on the payoff deed under a contract for deed: https://www.revisor.mn.gov/statutes/cite/103I.235
• 42 U.S.C. § 4852d; 24 C.F.R. Part 35 — Federal lead disclosure: https://www.epa.gov/lead
• 12 U.S.C. § 1701j-3 — Garn-St. Germain Act: https://www.law.cornell.edu/uscode/text/12/1701j-3