b'"Minnesota Nice" Continued from Page 2 "Minnesota Nice" Continued from Page 8if the mortgaged property is located in multiple Minnesotatypically the legal description of a property will denote5) Assignments of Rents & Limited Receivers: Pursuant tofamilies), the formal process to cancel a purchase agreement is counties, MRT is paid in full on the first recording in the firstabstract or Torrens, but if not, our office can assist withMinnesota statutes, assignments of rents and profits generatedavailable to both seller and buyer along the same lines as above,county and does not need to be paid on subsequent recordingssuch determination and how to place documents correctly ofby mortgaged real property are enforceable for mostexcept that cancellation occurs either after a 15-day notice in other counties. Depending on the particular circumstances,record in any Minnesota county. income-producing properties and can be and often are includedand cure period, or after a 15-day period with no cure option certain legends and prescribed language are required by the4) Mortgages: Minnesota is a mortgage state, not a deed ofin the mortgage instrument, though they may be in a separate(also known as a declaratory cancellation, which can only MRT statutes to be added to the mortgage, and other customary rust state. In addition to MRT (discussed at 2 in this article),recorded instrument. In 2012, Minnesotas receivership statutesbe overcome by court order). Also, for residential projects, any MRT language is usually included within the mortgage to ensuret were overhauled to permit a limited receiver to be appointedearnest money held under a cancelled purchase agreement is MRT is appropriately addressed. Our firm is often called upon toMinnesota mortgages should address a handful of otherat any time after commencement of foreclosure to collectpaid to the party completing the cancellation, regardless of any resolve issues and questions relating to MRT.state-specific issues. First, Minnesota mortgages should clearlysuch rents and profits and apply them first in a specific order,contrary provision in the agreement. For both non-residential state the maturity date of the debt secured because if aand thereafter pursuant to the terms of the assignment.and residential cancellations, the statutes provide the specific 3) Abstract Versus Torrens: Minnesota has two land title andmaturity date is not specified, the 15-year statute of limitationsA well-drafted assignment will, on the one hand, incorporateforms of cancellation notices, and failure to abide by the statutes recording systems. The first, and the default system acrossfor foreclosure commences as of the date of the mortgage, and follow such statutes and, on the other hand, providemay result in a purchase agreement not being legally terminated, the state, is the abstract system in which documents arerather than the maturity date. Second, if a mortgage securesfurther and specific guidance as to how and to whom anywhich could have costly consequences. Our office can assist with recorded with a county recorder. The second is the Torrensa revolving line of credit, the maximum principal amountremaining amounts should be paid. An assignment remainsensuring that all the various formalities of purchase agreement system in which documents are filed with a county registrarthat may be advanced should be stated because even if theeffective during foreclosure and throughout any redemptioncancellation are fully satisfied.of title. Each Torrens property has a certificate of title whichmaximum is not advanced, such mortgage is effective as publicperiod following a foreclosure sale, even if all or part of the is conclusive proof of ownership, whereas abstract propertynotice for the stated maximum amount. Third, if the lendermortgage debt was extinguished, but only to the extent7) Contracts for Deed and Cancellation: While less common necessary to pay ongoing expenses of the property. We aretownership is determined by an examination of the chain ofwants the option to foreclose non-judicially, also referred han they once were, we still encounter a fair number of prior owners and other recorded interest holders. A Torrensto as foreclosure by advertisement, the mortgage mustavailable to review whether an instruments assignment ofcontracts for deed as a means to convey Minnesota real certificate of title is subject only to seven standard statutorycontain an acceptable power-of-sale clause (though mortgagesrents and receivership provisions conform to these uniqueproperty, particularly in connection with estate planning. In exceptions and any Memorials stated thereupon, so anymay also be judicially foreclosed in Minnesota). Fourth, forMinnesota requirements. a contract for deed (known in other states as installment subsequent liens, encumbrances, and interests need to becommercial projects, the borrower should be required to waivecontracts or conditional sales), the seller retains fee registered upon a Torrens certificate as and when they arise.the homestead exemption, to ensure that the mortgage can6) Purchase Agreement Cancellation: Unless both partiesownership of the property as security for the buyers For example, one of the standard statutory exceptions tobe fully enforced against the property and all improvementsvoluntarily agree to cancel a purchase agreement for realinstallments of the purchase price, usually with interest, paidTorrens title is any lease for a term not exceeding three years;located thereon. Fifth, the mortgage should state that theproperty, Minnesota statutes establish a formal processover time. When the contract for deed is paid in full, the so any lease for a term of three years or more should beproperty is not used for agricultural purposes because farmlandrequired to cancel such agreements, which process cannot beseller transfers the property to the buyer. Neither deed tax nor registered upon the Torrens certificate to ensure public noticeis entitled to a longer redemption period in Minnesota, andwaived. For non-residential projects, if a seller desires to cancelmortgage registry tax (discussed at 1 and 2 in this article) apply thereof. If a property is not registered as Torrens property, it isforeclosure of farmland is subject to Minnesotas stricta purchase agreement for an uncured buyer default, then theto a contract for deed, and the general practice is to record all unregistered abstract property. Owners may convert abstractfarmer-lender mediation requirements. Lastly, in Minnesota, aseller must personally serve upon the buyer a notice specifyingcontracts for deed. If a buyer defaults on a contract, Minnesota property to Torrens through a process called registration ofrecorded mortgage will constitute a financing statement filedsuch default and providing a 30-day notice and cure period (orpermits the seller to cancel the contract, remove buyer from title, either with or without court involvement. It is crucialas a fixture filing under Article 9 of the Uniform Commerciallonger period if required by the agreement). Service of suchpossession, and retain all payments previously made, much like that recordable transaction documents be recorded in theCode (UCC), and no separate financing statement will needcancellation notice must be made in the same manner as aforeclosure of a mortgage under power of sale and without correct system. If a property is part abstract and part Torrens,to be recorded, provided the mortgage includes the requiredcourt proceeding, though in limited circumstances where thejudicial involvement. However, the same statutory process to documents must be recorded with both the county recorderinformation as set forth in the UCC. Our office routinelybuyer is not able to be personally served, the seller may publishcancel purchase agreements (discussed at 6 in this article) is and the county registrar, and if any part of a property is Torrensreviews mortgage instruments for synchronization withits notice in a legal newspaper for 90 days provided that anyalso required to cancel contracts for deed, albeit with a few key but documents are not filed with a county registrar, suchMinnesota-specific requirements, and we are available to helpoccupant of the project is also personally served within 30 daysdifferences: first, there is a 60-day notice and cure period (or recording is ineffective to give public notice. In Minnesota,review your mortgage forms as well. of the publication. For residential projects (defined as one to fourlonger period if required by the contract); second, it is general 8 "Minnesota Nice" Continued on Page 9 "Minnesota Nice" Continued on Page 10# 9'