2003 Minnesota Statutes

     559.21 Contract termination; notice; service; costs; 
  conditions. 

    Subdivision 1. Repealed, 1Sp1985 c 18 s 16 

    Subd. 1a. Repealed, 1Sp1985 c 18 s 16 

    Subd. 1b.    For contract executed before 8/2/1976.  If 
 a default occurs in the conditions of a contract for the 
 conveyance of real estate or an interest in real estate executed 
 on or prior to August 1, 1976, that gives the seller a right to 
 terminate it, the seller may terminate the contract by serving 
 upon the purchaser or the purchaser's personal representatives 
 or assigns, within or outside the state, a notice specifying the 
 conditions in which default has been made.  The notice must 
 state that the contract will terminate 30 days after the service 
 of the notice, unless prior to the termination date the 
 purchaser: 

    (1) complies with the conditions in default; 

    (2) pays the costs of service of the notice, including the 
 reasonable costs of service by sheriff, public officer, or 
 private process server; except payment of costs of service is 
 not required unless the seller notifies the purchaser of the 
 actual costs of service by certified mail to the purchaser's 
 last known address at least ten days prior to the date of 
 termination; and 

    (3) pays an amount to apply on attorneys' fees actually 
 expended or incurred, of $50 if the amount in default is less 
 than $500, and of $100 if the amount in default is $500 or more; 
 except no amount is required to be paid for attorneys' fees 
 unless some part of the conditions of default has existed for at 
 least 45 days prior to the date of service of the notice. 

    Subd. 1c.    For contract executed before 5/1/1980.  If 
 a default occurs in the conditions of a contract for the 
 conveyance of real estate or an interest in real estate executed 
 after August 1, 1976, and prior to May 1, 1980, that gives the 
 seller a right to terminate it, the seller may terminate the 
 contract by serving upon the purchaser or the purchaser's 
 personal representatives or assigns, within or outside the 
 state, a notice specifying the conditions in which default has 
 been made.  The notice must state that the contract will 
 terminate 30 days after the service of the notice if the 
 purchaser has paid less than 30 percent of the purchase price, 
 45 days after service of the notice if the purchaser has paid 30 
 percent or more of the purchase price but less than 50 percent, 
 or 60 days after service of the notice if the purchaser has paid 
 50 percent or more of the purchase price; unless prior to the 
 termination date the purchaser: 

    (1) complies with the conditions in default; 

    (2) pays the costs of service of the notice, including the 
 reasonable costs of service by sheriff, public officer, or 
 private process server; except payment of costs of service is 
 not required unless the seller notifies the purchaser of the 
 actual costs of service by certified mail to the purchaser's 
 last known address at least ten days prior to the date of 
 termination; and 

    (3) pays an amount to apply on attorneys' fees actually 
 expended or incurred, of $75 if the amount in default is less 
 than $750, and of $200 if the amount in default is $750 or more; 
 except no amount is required to be paid for attorneys' fees 
 unless some part of the conditions of default has existed for at 
 least 45 days prior to the date of service of the notice. 

    Subd. 1d.    For contract executed before 8/1/1985.  If 
 a default occurs in the conditions of a contract for the 
 conveyance of real estate or an interest in real estate executed 
 on or after May 1, 1980 and prior to August 1, 1985, that gives 
 the seller a right to terminate it, the seller may terminate the 
 contract by serving upon the purchaser or the purchaser's 
 personal representatives or assigns, within or outside the 
 state, a notice specifying the conditions in which default has 
 been made.  The notice must state that the contract will 
 terminate 30 days after the service of the notice if the 
 purchaser has paid less than ten percent of the purchase price, 
 60 days after service of the notice if the purchaser has paid 
 ten percent or more of the purchase price but less than 25 
 percent, or 90 days after service of the notice if the purchaser 
 has paid 25 percent or more of the purchase price; unless prior 
 to the termination date the purchaser: 

    (1) complies with the conditions in default; 

    (2) makes all payments due and owing to the seller under 
 the contract through the date that payment is made; 

    (3) pays the costs of service of the notice, including the 
 reasonable costs of service by sheriff, public officer, or 
 private process server; except payment of costs of service is 
 not required unless the seller notifies the purchaser of the 
 actual costs of service by certified mail to the purchaser's 
 last known address at least ten days prior to the date of 
 termination; and 

    (4) pays an amount to apply on attorneys' fees actually 
 expended or incurred, of $125 if the amount in default is less 
 than $750, and of $250 if the amount in default is $750 or more; 
 except no amount is required to be paid for attorneys' fees 
 unless some part of the conditions of default has existed for at 
 least 45 days prior to the date of service of the notice. 

    Subd. 1e.    Determination of purchase price.  For 
 purposes of determining the purchase price and the amount of the 
 purchase price paid on contracts executed prior to August 1, 
 1985: 

    (a) The purchase price is the sale price under the contract 
 alleged to be in default, including the initial down payment.  
 Mortgages, prior contracts for deed, special assessments, 
 delinquent real estate taxes, or other obligations or 
 encumbrances assumed by the purchaser are excluded in 
 determining the purchase price. 

    (b) The amount paid by the purchaser is the total of 
 payments of principal made under the contract alleged to be in 
 default, including the initial down payment.  Interest payments 
 and payments made under mortgages, prior contracts for deed, 
 special assessments, delinquent real estate taxes, or other 
 obligations or encumbrances assumed by the purchaser are 
 excluded in determining the amount paid by the purchaser.  

    Subd. 2. Repealed, 1Sp1985 c 18 s 16 

    Subd. 2a.    For post 7/31/1985 contract.  If a default 
 occurs in the conditions of a contract for the conveyance of 
 real estate or an interest in real estate executed on or after 
 August 1, 1985, that gives the seller a right to terminate it, 
 the seller may terminate the contract by serving upon the 
 purchaser or the purchaser's personal representatives or 
 assigns, within or outside of the state, a notice specifying the 
 conditions in which default has been made.  The notice must 
 state that the contract will terminate 60 days, or a shorter 
 period allowed in subdivision 4, after the service of the 
 notice, unless prior to the termination date the purchaser: 

    (1) complies with the conditions in default; 

    (2) makes all payments due and owing to the seller under 
 the contract through the date that payment is made; 

    (3) pays the costs of service of the notice, including the 
 reasonable costs of service by sheriff, public officer, or 
 private process server; except payment of costs of service is 
 not required unless the seller notifies the purchaser of the 
 actual costs of service by certified mail to the purchaser's 
 last known address at least ten days prior to the date of 
 termination; 

    (4) except for earnest money contracts, purchase 
 agreements, and exercised options, pays two percent of any 
 amount in default at the time of service, not including the 
 final balloon payment, any taxes, assessments, mortgages, or 
 prior contracts that are assumed by the purchaser; and 

    (5) if the contract is executed on or after August 1, 1999, 
 pays an amount to apply on attorneys' fees actually expended or 
 incurred, of $250 if the amount in default is less than $1,000, 
 and of $500 if the amount in default is $1,000 or more; or if 
 the contract is executed before August 1, 1999, pays an amount 
 to apply on attorneys' fees actually expended or incurred, of 
 $125 if the amount in default is less than $750, and of $250 if 
 the amount in default is $750 or more; except that no amount for 
 attorneys' fees is required to be paid unless some part of the 
 conditions of default has existed for at least 30 days prior to 
 the date of service of the notice.  

    Subd. 3.    Notice defined.  For purposes of this 
 section, the term "notice" means a writing stating the 
 information required in this section, stating the name, address 
 and telephone number of the seller or of an attorney authorized 
 by the seller to accept payments pursuant to the notice and the 
 fact that the person named is authorized to receive the 
 payments, stating a mailing address and a street address or 
 location where the seller or the attorney will accept payment 
 pursuant to the notice, and including the following information 
 in 12-point or larger underlined upper-case type, or 8-point 
 type if published, or in large legible handwritten letters:  

    THIS NOTICE IS TO INFORM YOU THAT BY THIS NOTICE THE SELLER 
 HAS BEGUN PROCEEDINGS UNDER MINNESOTA STATUTES, SECTION 559.21, 
 TO TERMINATE YOUR CONTRACT FOR THE PURCHASE OF YOUR PROPERTY FOR 
 THE REASONS SPECIFIED IN THIS NOTICE.  THE CONTRACT WILL 
 TERMINATE ..... DAYS AFTER (SERVICE OF THIS NOTICE UPON YOU) 
 (THE FIRST DATE OF PUBLICATION OF THIS NOTICE) (STRIKE ONE) 
 UNLESS BEFORE THEN: 

    (a) THE PERSON AUTHORIZED IN THIS NOTICE TO RECEIVE 
 PAYMENTS RECEIVES FROM YOU: 

    (1) THE AMOUNT THIS NOTICE SAYS YOU OWE; PLUS 

    (2) THE COSTS OF SERVICE (TO BE SENT TO YOU); PLUS 

    (3) $........... TO APPLY TO ATTORNEYS' FEES ACTUALLY 
 EXPENDED OR INCURRED; PLUS 

    (4) FOR CONTRACTS EXECUTED ON OR AFTER MAY 1, 1980, ANY 
 ADDITIONAL PAYMENTS BECOMING DUE UNDER THE CONTRACT TO THE 
 SELLER AFTER THIS NOTICE WAS SERVED ON YOU; PLUS 

    (5) FOR CONTRACTS, OTHER THAN EARNEST MONEY CONTRACTS, 
 PURCHASE AGREEMENTS, AND EXERCISED OPTIONS, EXECUTED ON OR AFTER 
 AUGUST 1, 1985, $.... (WHICH IS TWO PERCENT OF THE AMOUNT IN 
 DEFAULT AT THE TIME OF SERVICE OTHER THAN THE FINAL BALLOON 
 PAYMENT, ANY TAXES, ASSESSMENTS, MORTGAGES, OR PRIOR CONTRACTS 
 THAT ARE ASSUMED BY YOU); OR 

    (b) YOU SECURE FROM A COUNTY OR DISTRICT COURT AN ORDER 
 THAT THE TERMINATION OF THE CONTRACT BE SUSPENDED UNTIL YOUR 
 CLAIMS OR DEFENSES ARE FINALLY DISPOSED OF BY TRIAL, HEARING OR 
 SETTLEMENT.  YOUR ACTION MUST SPECIFICALLY STATE THOSE FACTS AND 
 GROUNDS THAT DEMONSTRATE YOUR CLAIMS OR DEFENSES.  

    IF YOU DO NOT DO ONE OR THE OTHER OF THE ABOVE THINGS 
 WITHIN THE TIME PERIOD SPECIFIED IN THIS NOTICE, YOUR CONTRACT 
 WILL TERMINATE AT THE END OF THE PERIOD AND YOU WILL LOSE ALL 
 THE MONEY YOU HAVE PAID ON THE CONTRACT; YOU WILL LOSE YOUR 
 RIGHT TO POSSESSION OF THE PROPERTY; YOU MAY LOSE YOUR RIGHT TO 
 ASSERT ANY CLAIMS OR DEFENSES THAT YOU MIGHT HAVE; AND YOU WILL 
 BE EVICTED.  IF YOU HAVE ANY QUESTIONS ABOUT THIS NOTICE, 
 CONTACT AN ATTORNEY IMMEDIATELY.  

    Subd. 4.    Law prevails over contract; procedure; 
 conditions.  (a) The notice required by this section must be 
 given notwithstanding any provisions in the contract to the 
 contrary, except that earnest money contracts, purchase 
 agreements, and exercised options that are subject to this 
 section may, unless by their terms they provide for a longer 
 termination period, be terminated on 30 days' notice.  The 
 notice must be served within the state in the same manner as a 
 summons in the district court, and outside of the state, in the 
 same manner, and without securing any sheriff's return of not 
 found, making any preliminary affidavit, mailing a copy of the 
 notice or doing any other preliminary act or thing whatsoever.  
 Service of the notice outside of the state may be proved by the 
 affidavit of the person making the same, made before an 
 authorized officer having a seal, and within the state by such 
 an affidavit or by the return of the sheriff of any county 
 therein. 

    (b) If a person to be served is a resident individual who 
 has departed from the state, or cannot be found in the state; or 
 is a nonresident individual or a foreign corporation, 
 partnership, or association, service may be made by publication 
 as provided in this paragraph.  Three weeks' published notice 
 has the same effect as personal service of the notice.  The 
 published notice must comply with subdivision 3 and state (1) 
 that the person to be served is allowed 90 days after the first 
 date of publication of the notice to comply with the conditions 
 of the contract, and (2) that the contract will terminate 90 
 days after the first date of publication of the notice, unless 
 before the termination date the purchaser complies with the 
 notice.  If the real estate described in the contract is 
 actually occupied, then, in addition to publication, a person in 
 possession must be personally served, in like manner as the 
 service of a summons in a civil action in state district court, 
 within 30 days after the first date of publication of the 
 notice.  If an address of a person to be served is known, then 
 within 30 days after the first date of publication of the notice 
 a copy of the notice must be mailed to the person's last known 
 address by first class mail, postage prepaid. 

    (c) The contract is reinstated if, within the time 
 mentioned, the person served: 

    (1) complies with the conditions in default; 

    (2) if subdivision 1d or 2a applies, makes all payments due 
 and owing to the seller under the contract through the date that 
 payment is made; 

    (3) pays the costs of service as provided in subdivision 
 1b, 1c, 1d, or 2a; 

    (4) if subdivision 2a applies, pays two percent of the 
 amount in default, not including the final balloon payment, any 
 taxes, assessments, mortgages, or prior contracts that are 
 assumed by the purchaser; and 

    (5) pays attorneys' fees as provided in subdivision 1b, 1c, 
 1d, or 2a. 

    (d) The contract is terminated if the provisions of 
 paragraph (c) are not met. 

    (e) In the event that the notice was not signed by an 
 attorney for the seller and the seller is not present in the 
 state, or cannot be found in the state, then compliance with the 
 conditions specified in the notice may be made by paying to the 
 court administrator of the district court in the county wherein 
 the real estate or any part thereof is situated any money due 
 and filing proof of compliance with other defaults specified, 
 and the court administrator of the district court shall be 
 deemed the agent of the seller for such purposes.  A copy of the 
 notice with proof of service thereof, and the affidavit of the 
 seller, the seller's agent or attorney, showing that the 
 purchaser has not complied with the terms of the notice, may be 
 recorded with the county recorder, and is prima facie evidence 
 of the facts stated in it; but this section in no case applies 
 to contracts for the sale or conveyance of lands situated in 
 another state or in a foreign country.  If the notice is served 
 by publication, the affidavit must state that the affiant 
 believes that the party to be served is not a resident of the 
 state, or cannot be found in the state, and either that the 
 affiant has mailed a copy of the notice by first class mail, 
 postage prepaid, to the party's last known address, or that such 
 address is not known to the affiant. 

    Subd. 5.    If required, notify commissioner.  When 
 required by and in the manner provided in section 270.69, 
 subdivision 7, the notice required by this section shall also be 
 given to the commissioner of revenue.  

    Subd. 6.  Repealed, 1983 c 215 s 16; 1984 c 474 s 7; 
 1985 c 306 s 26; 1987 c 292 s 36; 1989 c 350 art 16 s 7 

    Subd. 7.    Cancellation of land sale.  The state of 
 Minnesota shall cancel any sale of land made by the state under 
 an installment contract upon default therein only in accord with 
 the provisions of this section. 

    Subd. 8.    Attorney as agent for service.  Any attorney 
 expressly authorized by the seller to receive payments in the 
 notice of termination under this section is designated as the 
 attorney who may receive service as agent for the seller of all 
 summons, complaints, orders, and motions made in conjunction 
 with an action by the purchaser to restrain the termination.  
 Service in the action may be made upon the seller by mailing a 
 copy of the process to the seller or to the seller's attorney, 
 by first class mail, postage prepaid, to the address stated in 
 the notice where payments will be accepted. 

    HIST: (9576) RL s 4442; 1913 c 136 s 1; 1915 c 200 s 1; 1925 c 
 163 s 1; 1959 c 618 s 1; 1961 c 270 s 1; 1976 c 181 s 2; 1976 c 
 240 s 1; 1980 c 373 s 6; 1982 c 500 s 3,4; 1982 c 523 art 2 s 
 47; 1983 c 215 s 2; 1983 c 342 art 15 s 38; 1984 c 474 s 2; 1985 
 c 300 s 29; 1985 c 306 s 7; 1Sp1985 c 16 art 2 s 44; 1Sp1985 c 
 18 s 6-10,16; 1986 c 438 s 1-8; 1Sp1986 c 3 art 1 s 82; 1992 c 
 463 s 30,31; 1994 c 388 art 2 s 1-3; 1999 c 11 art 4 s 4