New contract for deed laws in Minnesota went into effect on August 1, 2024, and include changes for both buyers and sellers.

A contract for deed is a real estate purchase agreement where the seller finances the sale instead of a lender. It’s an alternative to a traditional mortgage that allows people to buy a home over time on a contract for deed for a term of 3–5 years on average.

Sorry we are experiencing system issues. Please try again.

Minneapolis Contract For Deed

Here are some things to know about contracts for deed in Minnesota:

- Payments: The buyer makes regular payments to the seller. The contract often requires a large final payment, called a “balloon” payment.
- Ownership: The buyer doesn’t own the home until the contract is complete.
- Default: If the buyer doesn’t make payments, the seller can cancel the contract and evict the buyer.
- Interest rates: Contracts for deed usually have higher interest rates.

Tax benefits: Contracts for deed have limited tax benefits, and the buyer may not be able to access equity.

Legislation: New legislation went into effect on August 1, 2024, with changes that impact both buyers and sellers. These changes include:
More time for late payments
Longer cancellation period
Buyers can recover a portion of their down payment if they cancel within four years
Sellers are prohibited from engaging in churning

Minnesota Contract for deed Cities

Things Minnesota buyers and sellers need to know when entering into a contract for deed after September 2024.

New contract for deed laws in Minnesota went into effect on August 1, 2024, and include changes for both buyers and sellers.
Sellers

Sellers must pay any delinquent real estate taxes on the property and record the contract within four months. Sellers are also prohibited from churning.

“what is churning? “””In real estate, churning is a tactic where a seller repeatedly offers a property to multiple buyers, then cancels the contracts to keep the property without losing ownership.This can be a way for sellers to collect large down payments without ever giving up the property.

Churning is a risk associated with contracts for deed, which are a financing option where the buyer pays the seller over time instead of all at once.Contracts for deed can be high-risk and predatory, and buyers may not receive the same protections as those with mortgages. Some of the risks of contracts for deed include:

No protections: Buyers have no protections against forfeiture, unlike with mortgages.
No repairs: The seller is not responsible for repairs, unlike a landlord.
No foreclosure sale: If a buyer defaults on the contract, the seller can evict the buyer without a foreclosure sale.
Loss of payments: Buyers may lose all the payments they made if they can’t afford a large lump sum payment.

In Minnesota, a bill was signed to limit churning by sellers. The bill also aims to protect homebuyers who purchase a home through a contract for deed.

If you’re considering a contract for deed, you should research and consult a professional. You can also submit a complaint to the CFPB about a contract for deed.

3. What happens if someone defaults on a contract for deed?

Upon final payment, ownership transfers when the seller provides the property deed. If default occurs, the seller retains the deed and possession rights, potentially leading to forfeiture of funds paid by the buyer.

Sellers

Sellers must pay any delinquent real estate taxes on the property and record the contract within four months. Sellers are also prohibited from churning.
Buyers

Buyers have 90 days to catch up on missed payments before eviction. Buyers can also cancel their contract within 10 days of receiving all disclosures and recover a portion of their down payment.
Additional disclosures

Home sellers must make additional disclosures about the transaction if a contract for deed is used.
Other changes include:

If a contract is not in recordable form, the vendor must make a good faith effort to correct it.

A statement that the property is not residential real property constitutes prima facie evidence that certain subdivisions do not apply

Minneapolis contract for deed homes for sale

Minneapolis is the county seat of Hennepin County and the larger of the Twin Cities, the 16th-largest metropolitan area in the United States. As of 2017, Minneapolis is the largest city in the state of Minnesota with an estimated population of 422,331.The Twin Cities metropolitan area consists of Minneapolis, its neighbor Saint Paul, and suburbs which altogether contain about 3.6 million people, and is the third-largest economic center in the Midwest.

Minneapolis lies on both banks of the Mississippi River, just north of the river’s confluence with the Minnesota River, and adjoins Saint Paul, the state’s capital.

Minneapolis has one of the largest LGBT populations in the U.S. proportional to its overall population. Noted for its strong music and performing arts scenes, Minneapolis is home to both the award-winning Guthrie Theater and the historic First Avenue nightclub.

Find Minneapolis Real Estate with boardwalkpremierrealty.com we have all types of properties.

Hennepin County Recorders office Information.

“”Dont Forget”

Recording the contract for deed

In Minnesota, a contract for deed must be recorded with the county recorder’s office within four months of being signed by the buyer and seller

Benefits of recording

Recording the contract provides legal notice to third parties of the buyer’s interest in the property. It also notifies the real property tax assessor that a transaction has occurred.
Extensions

The filing period may be extended if the buyer was unable to file due to unpaid property taxes.
Who records

The seller is responsible for recording the contract, but anyone can record it.
No Mortgage Registration Tax

There is no Mortgage Registration Tax (MRT) due when recording a contract for deed because it’s exempt under the MRT law.

Mortgage registry and deed tax calculator

Mortgage registry tax (MRT) is paid when recording a mortgage. The rate is 0.0024* of the purchase price (Example: $100,000 X 0.0024 = $240.00 MRT).

If you need to claim an exemption from MRT or document the basis of your tax, use the state’s MRT1 form.

Learn more about MRT at Department of Revenue MRT.

State deed tax

State Deed tax (SDT) is paid when recording an instrument conveying Minnesota real property. The rate is 0.0034* of the purchase price (Example: $100,000 X 0.0034 = $340.00 SDT).

The minimum SDT in Hennepin County is $1.70 for deeds with consideration of $500 or less.

Starting January 1, 2020, the minimum SDT of $1.70 for deeds with consideration changes from $500 or less to $3,000 or less.

If you need to claim an exemption or the minimum tax, use the state’s DT1 form.

Learn more about SDT at Department of Revenue SDT.

* Hennepin County adds an additional .0001 to their MRT and SDT for an environmental response fund per Minnesota Statute 383A.80.

Recording Fees

Payment options

We accept checks made out to Hennepin County Recorder or cash. A single check may be written to cover both the recording fee and the tax. Credit cards are accepted in person at the Government Center.

Fees

Abstract or Torrens Memorial

$46 per document

Additional Torrens Memorial

$20 per each additional certificate

Assignments, satisfactions, partial releases

Abstract – $46 per document ($10 additional for each referenced number over the first four)
Torrens – $46 per document

Common interest community certificate

Condominium, Plats, CIC condominium plats and surveys

Abstract – $56 minimum for first 112 units ($.50 per each additional unit over 112)
Torrens – $56 (additional $40 if an old one has to be canceled)

Conservation fee

$5 Minnesota Conservation Fund fee collected on each instrument where state deed tax or mortgage registration tax has been paid

Exchange certificate

$20 for each certificate cancelled
$20 for each new certificate issued

First certificate or possessory title

Memorial plat

$46 pursuant to Section 508.23 or Section 508.671

Residue or additional certificate

$40 for each residue certificate issued
$40 for each additional certificate issued

State tax lien

No charge for recording of lien itself

State tax lien release

Transfer of fee ownership certificate

$46 for the first certificate cancelled and issued
$40 for each additional certificate issued

Well disclosure certificate

Extra copies submitted at time of filing

Contract for deed

Must include either a well statement signed by the buyer or a WDC and the $50 fee.
SDT not required on a Contract for Deeds.
A value of more than $1,000 of consideration must be accompanied by an eCRV (Minnesota Statute 272.115).

* Recommended and prepared in part by the Minnesota County Recorder’s Association. Revised: 08-01-2008

Recorder – Registrar of Titles

[email protected]

Phone: 612-348-5139

Skyway level – Government Center

300 South 6th Street

Minneapolis, MN 55487-0055

M-F, 8 a.m. to 4:30 p.m.

In Minnesota, a contract for deed is considered usurious if the interest rate is higher than the maximum lawful rate set in Minnesota Statutes, Section 47.20, Subdivision 4a:

The maximum interest rate that can be charged on a contract for deed in Minnesota is available on the Minnesota Commissioner of Commerce website.
A contract for deed is not unenforceable solely because of an usurious interest rate.
People who have paid usurious interest can recover up to five times the amount of the usurious interest, plus attorneys’ fees.

A contract for deed is a private agreement where the buyer pays the seller the purchase price of the property in installments. It’s also known as a land contract, installment land contract, bond for deed, or installment sale.

Here are some other things to know about contracts for deed in Minnesota:

The seller can cancel the contract if the buyer can’t make payments.
The buyer has 60 days to catch up on payments or cure the default to stop the cancellation.
If the buyer can’t catch up within 60 days, they may be evicted and won’t be able to recover any payments or equity in the home.
Contracts for deed executed on or after January 1, 1984 must be recorded by the vendee within four months.
The filing period can be extended if the buyer was unable to pay the property tax due in the current year.

Home Loan Rates-Contract for deed

Mn Department of Commerce.

Call 651-539-1711 for a recorded message of interest rates.

Note A: Effective August 1, 2024, the retired Federal National Mortgage Association posted yields on 30 year mortgage commitments for delivery within 60 days on standard conventional fixed rate mortgages may be substituted with the Average Prime Offer Rate published by the Consumer Financial Protection Bureau as outlined in the following Interpretive Opinion: Read the Interpretive Opinion [pdf]

Note B: Minnesota Statutes §47.20 established an index for maximum rates on conventional loans or contracts for deed with a duration of ten years or less, for the purchase of real estate for timeshare interest described in Minnesota Statutes §83.20. This rate is three (3) percentage points above other rates in this section or 15.75 percent per year, whichever is less.

Is there Minimum Rates in Minnesota?

There is no minimum interest rate for a contract for deed in Minnesota, but the interest rate is usually fixed and added to the principal balance. The buyer and seller can negotiate the interest rate when they create the contract for deed.

A contract for deed is a type of agreement where the buyer purchases a house over a period of time, rather than paying the seller all at once. It’s sometimes called a “rent-to-own” agreement-“Land contract”Contract for deed”some people say ” c4d.” Which all boils down to seller financing -direct by owner financing to the buyer for a certain period of time and terms.

Look Out for Scammers!

Real estate scammers sell a contract for deed for a home that is already in foreclosure and collect payments that they will simply pocket. Eventually the mortgage company will take the house back and the buyer will be evicted. It is important to check with the county tax office and recorder’s office to see what other liens may be recorded on the property and to see if there are back taxes owed before entering into a contract for deed.

Hire Boardwalk Premier Realty for all your real estate needs.

BoardWalk Premier Realty has been in business since 1996 and works with contract for deed financing in Minnesota on a daily basis!

If you have any questions regarding the contract, you may wish to reach out to a real estate attorney.

Manufactured homes are sometimes sold on contracts for deed. Please see our “Manufactured Home Parks” Handbook for more information.

For additional resources or information on contracts for deed, you can contact the Minnesota Homeownership Center (651-659-9336).

Main Content

Contract For Deed Minneapolis alternative financing