Upon failure of any purchaser having a contract with the Water Resources Commission to make payments of principal and interest according to the terms of the contract, the commission shall notify the purchaser by registered mail or by certified mail with return receipt of the default. If the default continues for a period of six months after the sending of such notice, the commission may cancel the contract, and all payments made thereunder shall be forfeited to the state and placed in the irrigation fund. The commission may reopen the lands covered by the canceled contract for entry, and resell water rights to the land to some other purchaser. Nothing in this section, however, shall be construed so as to prevent the commission from extending the time to make any payment due under any contract with a purchaser, when in the judgment of the commission the purchaser is entitled to an extension. [Amended by 1991 c.249 § 58]