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Last Updated: 4/6/2018

Indeterminate Amount

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​When a mortgage is presented to a Minnesota county for recording, there is a presumption that the intent of the mortgagee is to “secure” the debt amount stated in the instrument and to provide “notice” of the debt.  For this to happen, Minnesota mortgage registration tax must be paid.  

In certain instances, a mortgagee can make the decision to use the “Indeterminate Amounts” clause provided in Minnesota Statutes 287.05, subdivision 5.  This allows for the recording of the mortgage without the payment of tax.  In some cases, liens for indefinite amounts in this state have been held to be perfected or choate for priority purposes.  See for instance, Host v. Host, 497 N.W.2d 617 (Minn. App. Mar. 16, 1993).

Please note, when the amount of debt becomes determined and the mortgagee chooses to secure that specific amount, mortgage registry tax must be paid upon the recording of an affidavit or mortgage modification.

Suggested language that should be included on the 1st page of mortgage

“This mortgage secures an indeterminate amount as provided in Minnesota Statutes 287.05, subdivision 5.  In the event of a future advance or default which the lender intends to secure with this mortgage, tax will be paid and an affidavit filed stating the amount of debt being secured.”  
 

Possible uses for “Indeterminate Amount” clause

  •  A mortgage given to secure a personal guaranty where the mortgagor is not liable for the debt unless there is a default by the primary debtor. 
  •  A mortgage given to secure repayment of future liabilities that may result from unforeseen environmental clean-up costs.