Purchase Contract Not Enough to Make Property Tax Exempt in Time for Deadline

Minnesota case law summary by Attorney Richard Clem: MN tax-exempt property, Minn Stat 272.02.

Crossroads Church of Prior Lake MN, v. County of Dakota. MN tax-exempt property, Minn Stat 272.02

Minn. Stat. 272.02 provides for an exemption from property tax for property "acquired" by an exempt entity prior to July 1 of the tax year. In this case, the Church had acquired legal title in September, but the church argued that it had taken possession and paid earnest money prior to July 1.

The Supreme Court held that the property had not been "acquired" prior to July 1. Church argued that equitable title had passed prior to that date. However, a number of unfulfilled conditions of the purchase contract prevented equitable title from vesting until after July 1. For example, the contract was conditioned upon zoning changes, which had not taken place prior to July 1.

Even without these conditions, the church's equitable title was insufficient to constitute having "acquired" the property. Equitable title must be coupled with "indicia of ownership" such as a contract for deed.

No. A10-859 (Minn. Mar. 2, 2011).

Please see the original opinion for the court's exact language.


Richard P. Clem is an attorney and continuing legal education (CLE) provider in Minnesota. He has been in private practice in the Twin Cities for 25 years. He has a J.D., cum laude, from Hamline University School of Law in St. Paul and a B.A. in History from the University of Minnesota. His reported cases include: Asociacion Nacional de Pescadores a Pequena Escala o Artesanales de Colombia v. Dow Quimica de Colombia, 988 F.2d 559, rehearing denied, 5 F.3d 530 (5th Cir. 1993), cert. denied, 510 U.S. 1041 (1994); LaMott v. Apple Valley Health Care Center, 465 N.W.2d 585 (Minn. Ct. App. 1991); Abo el Ela v. State, 468 N.W.2d 580 (Minn. Ct. App. 1991).

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