A Minnesota purchase agreement for a property near Prior Lake includes a contingency for review of the seller's Subsurface Sewage Treatment System (SSTS) compliance inspection. The county inspector determines the system is 'non-compliant but not an imminent threat to public health.' The seller argues that because the system is not an imminent threat, the buyer cannot cancel. The buyer disagrees. Under Minnesota law and standard purchase agreement practice, which party is most likely correct?
Correct Answer
A) The buyer is correct; any non-compliant SSTS determination, regardless of threat level, satisfies the condition for cancellation under the contingency
Under Minn. Stat. § 115.55 and standard Minnesota purchase agreement practice, an SSTS contingency is typically triggered by a finding of non-compliance—not solely by a finding of imminent threat to public health. A 'non-compliant but not an imminent threat' designation still constitutes a non-compliant system. The buyer's right to cancel under the SSTS contingency is based on the compliance status of the system, not on the severity of the threat level. Therefore, the buyer may properly cancel and recover earnest money.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
Specific performance is a court-ordered remedy that compels the breaching party to fulfill their obligations under the contract rather than simply paying monetary damages. It is an equitable remedy used when monetary damages would be inadequate.
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