MORTGAGE (WITH POWER OF SALE)
(Minnesota – Real Property)
[// GUIDANCE: This template is drafted for fee simple real estate located in the State of Minnesota and presumes a standard, single-parcel, non-agricultural, 1-4 family residential or commercial property. Practitioners should tailor for agricultural, multi-parcel, or specialized collateral and confirm compliance with Minn. Stat. chs. 507, 508, 508A, 580-582, and any county-specific recording requirements.]
RECORDING INFORMATION
After Recording Return To:
[NAME]
[ADDRESS]
Drafted By:
[NAME OF DRAFTER]
[ADDRESS]
Minnesota Attorney Reg. No. [######]
[// GUIDANCE: Minn. Stat. § 507.091 requires the “Drafted by” legend on all documents submitted for recording.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Granting Clause & Secured Obligations
- Representations & Warranties
- Covenants & Restrictions
- Events of Default
- Remedies (Including Foreclosure & Deficiency)
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution & Acknowledgment
- Exhibit A – Legal Description
1. DOCUMENT HEADER
1.1 Parties
This MORTGAGE (this “Mortgage”) is made as of [EFFECTIVE DATE] (the “Effective Date”) by and between:
• [BORROWER LEGAL NAME], a [STATE OF FORMATION & ENTITY TYPE / INDIVIDUAL], having an address at [BORROWER ADDRESS] (“Borrower” or “Mortgagor”); and
• [LENDER LEGAL NAME], a [STATE OF FORMATION & ENTITY TYPE], having an address at [LENDER ADDRESS] (“Lender” or “Mortgagee”).
1.2 Recitals
A. Borrower is indebted to Lender under that certain Promissory Note dated of even date herewith in the original principal amount of $[PRINCIPAL AMOUNT] (as amended, restated, renewed, or replaced, the “Note”).
B. As security for the Note and all other Secured Obligations (as defined below), Borrower desires to grant Lender a first-priority mortgage lien on the Property (as defined below).
C. The parties intend that this Mortgage be governed by and construed in accordance with the real estate laws of the State of Minnesota.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, Borrower hereby agrees as follows:
2. DEFINITIONS
For purposes of this Mortgage, the following terms have the respective meanings set forth below. Section references are to this Mortgage unless otherwise noted.
“Affiliate” – any Person controlling, controlled by, or under common control with Borrower.
“Applicable Law” – any federal, state, or local statute, regulation, ordinance, or common-law rule applicable to the Property or the parties, including Minn. Stat. chs. 580-582.
“Default Rate” – the rate of interest specified in the Note upon an Event of Default.
“Environmental Laws” – all Applicable Laws relating to health, safety, hazardous substances, or the environment.
“Event of Default” – any event described in Section 6.1.
“Imposition” – all taxes, assessments, levies, utility charges, and other governmental charges affecting the Property.
“Person” – any natural person, corporation, partnership, limited liability company, joint venture, trust, or governmental authority.
“Property” – collectively, (a) the real property described in Exhibit A, together with all easements, rights-of-way, and appurtenances; (b) all improvements now or hereafter erected thereon; (c) all fixtures, attachments, and personal property affixed or relating thereto; and (d) all proceeds thereof.
“Secured Obligations” – (i) all indebtedness evidenced by the Note; (ii) all extensions, renewals, or modifications thereof; (iii) all advances made by Lender under this Mortgage; (iv) all Borrower obligations under any loan documents executed in connection with the Note; and (v) all costs of enforcement or collection, including reasonable attorneys’ fees.
[// GUIDANCE: Add additional defined terms (e.g., “Rents,” “Leases”) if the Property is income-producing.]
3. GRANTING CLAUSE & SECURED OBLIGATIONS
3.1 Grant. Borrower does hereby mortgage, grant, bargain, sell, convey, assign, and warrant unto Lender, with power of sale, the Property, TO HAVE AND TO HOLD the same unto Lender, its successors and assigns, forever.
3.2 Purpose. This Mortgage secures the punctual payment and performance of the Secured Obligations.
3.3 Fixture Filing. This Mortgage constitutes a financing statement filed as a fixture filing under Article 9 of the Uniform Commercial Code and covers goods that are or are to become fixtures on the Land.
3.4 Future Advances. Pursuant to Minn. Stat. § 287.20, this Mortgage secures future advances up to the Maximum Secured Amount of $[MAXIMUM SECURED AMOUNT] plus interest.
4. REPRESENTATIONS & WARRANTIES
Borrower represents and warrants to Lender that, as of the Effective Date and continuing until the Secured Obligations are indefeasibly paid in full:
4.1 Organization & Authority. Borrower is duly organized, validly existing, and in good standing under the laws of its state of formation and is duly qualified to transact business in Minnesota, if required.
4.2 Title. Borrower holds marketable fee simple title to the Property subject only to Permitted Encumbrances disclosed on Schedule 4.2.
4.3 Power & Enforceability. Borrower has full power and authority to execute and deliver this Mortgage and to perform its obligations hereunder. This Mortgage constitutes a legal, valid, and binding obligation of Borrower, enforceable against Borrower in accordance with its terms.
4.4 Compliance. Neither the execution of this Mortgage nor the consummation of the transactions contemplated hereby violates any Applicable Law or any agreement binding upon Borrower or the Property.
4.5 Environmental. Except as disclosed on Schedule 4.5, Borrower has no knowledge of any violation of Environmental Laws or the presence of Hazardous Materials on the Property.
4.6 Litigation. No action or proceeding is pending or, to Borrower’s knowledge, threatened that could materially impair Borrower’s ability to perform its obligations or Lender’s rights hereunder.
4.7 Survival. The representations and warranties in this Section 4 shall survive the recordation of this Mortgage and continue in full force until the Secured Obligations are paid in full.
5. COVENANTS & RESTRICTIONS
Borrower covenants and agrees that until the Secured Obligations are paid in full:
5.1 Payment & Performance. Borrower shall pay and perform the Secured Obligations when due.
5.2 Impositions. Borrower shall pay prior to delinquency all Impositions affecting the Property and deliver paid receipts upon request.
5.3 Insurance. Borrower shall maintain insurance on the Property against loss or damage by fire and all other hazards covered by a standard “special form” policy, in amounts and with insurers acceptable to Lender, naming Lender as mortgagee/loss payee pursuant to a standard mortgagee clause.
5.4 Maintenance. Borrower shall keep the Property in good condition, free of waste, and in compliance with Applicable Law.
5.5 Transfers. Except with Lender’s prior written consent, Borrower shall not sell, convey, transfer, or encumber any interest in the Property, other than Permitted Encumbrances or transfers expressly allowed under the loan documents.
5.6 Books & Records; Inspection. Borrower shall keep accurate books and allow Lender reasonable access to inspect the Property and records.
5.7 Further Assurances. Borrower shall execute and deliver such further instruments as Lender may reasonably request to confirm or perfect the lien hereof.
5.8 Notice of Certain Events. Borrower shall promptly notify Lender of (i) any Event of Default; (ii) any material casualty or condemnation; or (iii) any notice of violation of Applicable Law.
6. EVENTS OF DEFAULT
6.1 Events. Each of the following constitutes an “Event of Default”:
a. Payment Default – Failure to pay any amount due under the Note or this Mortgage within [10] days after the due date.
b. Covenant Default – Failure to perform or observe any non-monetary covenant herein within [30] days after written notice (or such shorter period as may be provided by Applicable Law where public safety or lien priorities are implicated).
c. Misrepresentation – Any representation or warranty proves materially false when made or deemed made.
d. Insolvency – The bankruptcy or insolvency of Borrower, or the appointment of a receiver for Borrower or the Property.
e. Transfer – Any prohibited transfer under Section 5.5.
6.2 Cure Periods. If Borrower commences cure within the notice period and diligently pursues completion, Lender may, in its sole discretion, extend the cure period, subject to Minn. Stat. § 580.30 (reinstatement) and other Applicable Law.
7. REMEDIES (INCLUDING FORECLOSURE & DEFICIENCY)
7.1 Acceleration. Upon an Event of Default, Lender may declare all Secured Obligations immediately due and payable.
7.2 Power of Sale Foreclosure. Subject to Minn. Stat. ch. 580, Lender may foreclose by advertisement following (i) publication of the notice of foreclosure sale for six consecutive weeks, and (ii) service of said notice upon Borrower and occupants at least four weeks prior to the sale.
7.3 Judicial Foreclosure. Alternatively, Lender may foreclose by action pursuant to Minn. Stat. ch. 581.
7.4 Post-Sale Rights.
a. Statutory Right of Redemption – Unless shortened or waived as permitted by Applicable Law, Borrower (or its successors) shall have the statutory right to redeem the Property within (i) six (6) months after the foreclosure sale for most non-agricultural, owner-occupied properties; (ii) twelve (12) months for certain agricultural or high-equity properties; or (iii) five (5) weeks for abandoned property, all as set forth in Minn. Stat. § 580.23.
b. Deficiency Judgment – To the extent permitted by Minnesota law, Lender reserves the right to pursue a deficiency judgment limited to the Secured Obligations outstanding after application of foreclosure proceeds. Any action for deficiency following foreclosure by advertisement must be commenced within the statutory period following expiration of the redemption period.
7.5 Additional Remedies. Lender may (i) enter and take possession of the Property; (ii) appoint or seek appointment of a receiver; (iii) collect Rents and Profits; (iv) specifically enforce any term; and (v) exercise all rights under the Uniform Commercial Code with respect to fixtures.
7.6 Application of Proceeds. Proceeds of any sale shall be applied: (a) to costs and expenses of sale (including reasonable attorneys’ fees); (b) to accrued interest; (c) to principal; and (d) the balance, if any, to the party entitled thereto by law.
7.7 Cumulative Remedies. All rights and remedies are cumulative and may be exercised concurrently or in any order.
8. RISK ALLOCATION
8.1 Indemnification. Borrower shall indemnify, defend, and hold harmless Lender and its Affiliates, and their respective officers, directors, employees, and agents, from and against any and all claims, liabilities, losses, damages, costs, and expenses (including reasonable attorneys’ fees) arising out of or relating to: (a) Borrower’s breach of this Mortgage or the Note; (b) ownership, operation, or condition of the Property; or (c) violation of Applicable Law, including Environmental Laws, except to the extent caused by the gross negligence or willful misconduct of an Indemnified Party.
8.2 Limitation of Liability. In no event shall Borrower be personally liable for an amount in excess of the Secured Obligations; provided, however, that the foregoing limitation shall not apply to (i) fraud or intentional misrepresentation; (ii) misapplication of insurance or condemnation proceeds; (iii) waste or environmental liabilities; or (iv) Borrower’s indemnification obligations under Section 8.1.
8.3 Insurance Proceeds. Insurance proceeds shall, at Lender’s option, be applied to restoration of the Property or to reduction of the Secured Obligations.
8.4 Force Majeure. Borrower shall not be deemed in default of non-monetary covenants during any period of delay caused by war, civil disturbance, act of God, or other event beyond Borrower’s reasonable control, provided Borrower gives prompt written notice and resumes performance when the force majeure event ceases.
9. DISPUTE RESOLUTION
9.1 Governing Law. This Mortgage and the Secured Obligations shall be governed by and construed in accordance with the laws of the State of Minnesota, without regard to conflict-of-law principles.
9.2 Forum Selection. Borrower irrevocably submits to the exclusive jurisdiction of the state courts located in the county where the Property is situated (or, to the extent jurisdiction exists, the United States District Court for the District of Minnesota) for any action arising out of or relating to this Mortgage.
9.3 Arbitration. The parties expressly exclude arbitration; all disputes shall be resolved in the courts specified in Section 9.2.
9.4 Jury Trial Waiver. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER AND LENDER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS MORTGAGE OR THE SECURED OBLIGATIONS.
9.5 Injunctive Relief. Nothing herein limits Lender’s right to seek equitable relief, including injunction or specific performance (e.g., foreclosure), in any court of competent jurisdiction.
10. GENERAL PROVISIONS
10.1 Amendments & Waivers. No amendment or waiver of any provision shall be effective unless in a writing signed by the party against whom enforcement is sought. A waiver of any provision in one instance shall not constitute a waiver in any subsequent instance.
10.2 Assignment. Lender may assign or participate its interest herein without Borrower’s consent. Borrower may not assign this Mortgage or any interest therein without Lender’s prior written consent.
10.3 Successors & Assigns. This Mortgage shall bind and benefit the parties and their respective heirs, personal representatives, successors, and permitted assigns.
10.4 Severability. If any provision is held invalid or unenforceable, the remaining provisions shall remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to reflect the parties’ intent and remain enforceable.
10.5 Merger & Integration. This Mortgage, the Note, and the other loan documents constitute the entire agreement regarding the subject matter and supersede all prior oral or written agreements.
10.6 Counterparts; Electronic Signatures. This Mortgage may be executed in counterparts, each of which is deemed an original and all of which together constitute one instrument. Signatures delivered by facsimile, PDF, or other electronic means shall be deemed original signatures.
10.7 Notices. All notices shall be in writing and delivered by (i) certified U.S. mail (return receipt requested), (ii) nationally recognized overnight courier, or (iii) hand delivery, in each case addressed to the respective party at its address set forth in Section 1.1 (or such other address as that party may designate in accordance herewith). Notices are effective upon receipt or refusal.
10.8 Costs & Expenses. Borrower shall pay all fees, costs, and expenses (including reasonable attorneys’ fees) incurred by Lender in connection with the preparation, administration, or enforcement of this Mortgage.
11. EXECUTION & ACKNOWLEDGMENT
IN WITNESS WHEREOF, Borrower has executed this Mortgage as of the Effective Date.
BORROWER:
[• BORROWER LEGAL NAME]
By: _____
Name: _____
Title: ________
[If individual:]
[NAME], an individual
[Add spouse signature block if homestead or marital property interest exists.]
LENDER:
[• LENDER LEGAL NAME]
By: _____
Name: _____
Title: ________
[NOTARY BLOCK – MINNESOTA]
STATE OF MINNESOTA )
) ss.
COUNTY OF ___ )
This instrument was acknowledged before me on _, 20_, by ____ [and ___] as ___ of ___, a ______, on behalf of the entity.
Notary Public
My Commission Expires: ____
[// GUIDANCE: Confirm county-specific acknowledgment formats and electronic notarization rules under Minn. Stat. § 358.645.]
12. EXHIBIT A – LEGAL DESCRIPTION
[Insert full metes-and-bounds or registered (Torrens) description. Include abstract/Torrens designation, PIN, and street address if known.]
[// GUIDANCE: Prior to recording, calculate Minnesota Mortgage Registry Tax (0.23% of debt secured) and deed tax, if any. Affix appropriate MRT stamp or electronic certificate. Verify that any Torrens property is memorialized per the registrar of titles’ requirements. Double-check cross-references, defined terms, and statutory citations for accuracy.]