Kevin purchased a residential property in Dakota County from Linda using a contract for deed five years ago. Kevin has paid 55% of the original purchase price. Kevin recently defaulted, and Linda properly served a written cancellation notice under Minn. Stat. § 559.21. Kevin's neighbor tells him he only has 60 days to reinstate the contract. Kevin's real estate licensee, however, advises him to verify this timeline carefully. Which of the following most accurately describes Kevin's reinstatement rights under Minnesota law?
Correct Answer
C) Kevin has 90 days to cure the default because he has paid 50% or more of the purchase price on a residential contract for deed
Under Minn. Stat. § 559.21, subd. 2a, the reinstatement period for a residential contract for deed is 90 days when the buyer has paid 50% or more of the purchase price. Since Kevin has paid 55% of the original purchase price, he qualifies for the 90-day cure period, not the shorter 60-day period. The licensee's advice to verify the timeline is correct — the neighbor's 60-day statement is inaccurate for Kevin's specific situation. This distinction between the 60-day and 90-day periods based on the percentage of purchase price paid is a Minnesota-specific rule that is heavily tested on the state exam.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
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