Cancellation of Contract for Deed in Minnesota: What You Should Know
A Contract for Deed is a type of real estate financing agreement where a buyer pays the seller in installments, instead of taking out a traditional mortgage from a bank. In Minnesota, buyers who use this financing option have the right to cancel their Contract for Deed under certain circumstances. In this article, we`ll discuss what those circumstances are and the steps you can take to cancel your Contract for Deed if necessary.
Grounds for Cancellation
Minnesota law provides for three main grounds for canceling a Contract for Deed: (1) breach of contract by the seller, (2) statutory cancellation, and (3) cancellation by agreement of both parties. Let`s explore each of these in more detail.
Breach of Contract
If the seller breaches any portion of the Contract for Deed, the buyer may have the right to cancel the contract. A breach of contract can occur in numerous ways, such as the seller failing to deliver the property, failing to make necessary repairs, or failing to pay property taxes. If the seller breaches the contract, the buyer must first provide written notice to the seller of the breach and give them a certain amount of time to correct it. If the seller fails to do so, the buyer may cancel the Contract for Deed.
Minnesota law provides for a statutory cancellation period for buyers who have entered into a Contract for Deed, giving them the right to cancel the contract within two years of the date of execution. This is a “cooling off” period that allows buyers to back out of the contract for any reason, without penalty or justification. Buyers who choose to cancel the Contract for Deed during this period must provide written notice to the seller, and the seller must return any payments made by the buyer.
Cancellation by Agreement
Finally, buyers and sellers can agree to cancel the Contract for Deed at any time by mutual consent. This often occurs when both parties agree that the financing arrangement is no longer working out, and they want to end the contract. In these cases, both parties must sign an agreement outlining the terms of the cancellation, including the return of any payments made by the buyer.
How to Cancel a Contract for Deed
If you need to cancel your Contract for Deed, the first step is to review the terms of your contract. You may want to consult with an attorney to ensure that you are following the proper procedures and that your rights are protected throughout the process.
If you are canceling your Contract for Deed due to a breach of contract by the seller, you must provide written notice to the seller outlining the breach and giving them a certain amount of time to correct it. If the seller fails to correct the breach, you may cancel the contract.
If you are canceling your Contract for Deed during the statutory cancellation period, you must provide written notice to the seller and return any payments made by the buyer.
If you are canceling your Contract for Deed by mutual agreement, both parties must sign an agreement outlining the terms of the cancellation, including the return of any payments made by the buyer.
In conclusion, Minnesota buyers who finance their real estate purchases through a Contract for Deed have the right to cancel the contract under certain circumstances. Whether due to a breach of contract by the seller, the statutory cooling-off period, or mutual agreement, buyers should be aware of their rights and obligations when it comes to cancelling a Contract for Deed. If you find yourself in need of cancelling a Contract for Deed, seek the advice of an experienced real estate attorney.