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 statutory attorneys' fees ($1,000 for contracts executed on or after August 1, 2024).

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 Suspend. Purchaser may obtain a court order suspending cancellation pending resolution of claims/defenses (§ 559.21, subd. 3(b)).

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 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.]

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
• 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