March 14, 2022 | By Daniel B. Segura
Some laws are very forgiving and only require “substantial compliance.” Other laws are not so forgiving. A recent Iowa Supreme Court case demonstrates the seriousness of “strict compliance” statutes and the great care one must take in deadlines, details, and calculations. Without such care, one might “bet the farm” and lose it.
The Iowa Supreme Court reviewed whether a farm creditor, after being assigned the redemption right from the original debtor, was successful in exercising the right of redemption to the foreclosed farmland. Mlady v. Dougan, 967 N.W.2d 328 (Iowa 2021). The Iowa Supreme Court held that the creditor failed to redeem the farmland in time. The Court noted that the right of redemption is purely statutory and must be “strictly complied with” for the creditor to successfully redeem the farmland.
But the cause of the creditor’s untimeliness in paying the redemption price is more unnerving than a simple missed deadline. The creditor paid exactly $1,937,001 by the end of the one-year redemption period, which was $1,798.79 (0.09277853%) short of the full redemption price. The correct price of $1,938,799.79 would be calculated with the simple contract interest rate of 21% from the time of default. Since the creditor and her attorney miscalculated the redemption payment, any payment made within the redemption period was insufficient, and subsequent attempts to pay the remaining balance were ineffective.
In summary, details and deadlines are crucial to navigating the law, and a calculator might just save the farm.
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