Canceling a contract for deed in Minnesota

John Braun
February 22, 2013


The recent uptick in the use of the Contract-for-Deed to finance real estate purchases (see my blog post here)  has an inevitable corollary: a future uptick in the need to cancel some of those contracts and recover the properties by the owners.  While not particularly complicated as legal processes go, getting your property back from a deadbeat buyer does require making certain good choices early on:

  1. Set a goal.  The Notice of Cancellation, which is the document that gets served on the buyer and recorded against the property to start the cancellation, contains a complete recitation of the costs that the buyer is going to have to pay in order to prevent the cancellation.  All arrearages owed to you appear in this document, and it is important that they be accurate – but if your goal is to encourage the buyer to get the payments current, instead of to get them out of the property, you may want to consider arriving at a number that is within the buyer’s ability to pay.  You don’t forfeit additional dollars owed, and you can always file another Notice of Cancellation if the buyer doesn’t get up to speed.  Of course, if your goal is to hit the “reset” button on the buyer, you will want to make sure you have every dollar owed in the Notice.


  1. Check for secondary defaults. If a buyer is not paying you, they probably aren’t paying other costs associated with the property that they had agreed to in the contract.  Condominium association fees, property taxes, insurance, and municipal (water) bills are common ones to watch for.  While you may not be able to recover these costs in the event of a full cancellation, you will want to protect your position in the property by ensuring that they are paid, and to incorporate them in your cost to cure.


  1. Stick to your timeline. Filing a notice and then pretending everything is a message to the court that you really aren’t serious.  If you made the decision to cancel and recover the property, don’t let “Minnesota Nice” cloud your judgment.


  1. Get a preliminary title search.  If your cancellation progresses all the way to the end, the buyer’s interest is extinguished when you recover the property.  With some exceptions, you may be unwittingly inheriting some of the buyer’s bad debt at the same time.  Sometimes these problems don’t make themselves known until years later, when you go to sell the property and find that there is a title “cloud” obligating you to pay thousands of dollars on a judgment that you didn’t purposefully incur.


If the time has come to cancel a Minnesota contract for deed, we can help.  Typically, these kinds of cases are not expensive (they run around $500 in legal fees) and a trusted adviser can steer you clear of much more expensive obstacles.  I you’d like to speak with us about your contract for deed cancellation, click on the “connect with us” link at the top of the page.



John Braun
John BraunAttorney