Request Your Legal Consult Here.
What is a Land Contract?
A land contract is a form of seller financing. It is similar to a mortgage, but rather than borrowing money from a lender or bank to buy real estate, the buyer makes payments to the real estate owner, or seller, until the purchase price is paid in full. This is called “seller financing” and when it comes to one of the most important assets in one’s life, there is no such thing as a simple land contract.
Signed land contracts are legally binding and can contain many different forms of agreements. When all payments have been made the buyer will be deeded the property.
Common problems with Land Contracts are:
1. The deed remains in the seller’s name until all payments of the agreement are made, between time of initial contract and payoff, which can take years.
2. The price is set and the payment schedule may not be amortized evenly, with a balloon or large payment at the end.
3. Several years may pass where the parties may forget the original intent of the terms.
How Are You Affected?
Some people consider a land contract as a “lease with an option to buy.” Certain states have slightly different legal rights for buyers and sellers. As a result, the land contract can be difficult to understand. A land contract buyer and seller must be very careful to ensure that the terms of the contract are legally binding to prevent future disputes from occurring. A seller’s remedy to unresolved disputes is to collect on land contract by forfeiture. If provisions in a land contract allow, then a land contract can be foreclosed upon. A buyer’s remedy is to sue for breach of contract or a judge may award the time to redeem property.
How Can We Help
Land contracts are legally binding agreements. Whether you are buying or selling a home on land contract, the performance of which requires substantial length of time. It is in the best interest of both the seller or buyer to involve a real estate attorney like David Soble to help you navigate through the federal and state laws governing land contracts, the process and the common terms of the contract. This can help prevent later disputes that may occur and give both parties peace of mind. Remember, the expense to clean up a mess is far greater than the expense of having it done right in the first place.
Do You Have a Land Contract Concern?
Call Us For Your CONSULTATION
At 888.789.1715 or
Complete This Form.
A Word About Land Contracts
Frequently Asked Questions
Top Questions Concerning Land Contracts
Do you have other land contract questions? Call us today!
What is a Memorandum of Land Contract?
A memorandum of land contract is an instrument executed for the purpose of reflecting the existence of a land contract and the seller’s and purchaser’s interests in the real property subject to the underlying land contract. It contains only the names of the parties to the contract, the date of the execution, and the description of the real property involved. It does not disclose the consideration, the terms of payment, the time of performance, or the covenants or terms.
Can a purchaser legally sell or rent a house on land contract if there is a mortgage?
Once a purchaser comes into legal title to a property, they can sell a property on land contract. They will need to have a real estate attorney review the underlying mortgage to see if the “due on sale” provision of the mortgage will pose a problem or not.
Is there a penalty under law for failure to tender the deed on a land contract purchase (contract fulfilled by buyer in full)?
The closest thing to a statute dealing with failure to provide a deed upon a land contract payoff is a Michigan statute as it relates to providing discharges after 60 days. However, the land contract provisions control. So if the deed is not provided and the buyer performed as required, then the buyer can maintain an action for breach of contract claim.
My father bought a home through Land Contract, now he wants to deed the Property to me so I can pay it off. Can we do this and, if so, what kind of deed should we use?
First, your father should give you an assignment of the land contract provided that the land contract terms allow for an assignment. Second, a deed is worthless as your father does not have title in his name. It is still with the seller. A deed (quitclaim preferably) would do very little at this time. Finally, a lender will most likely require that you should be on title for at least 12 months before you could finance the property in your name. You would want to get the seller to approve the assignment of the land contract in your name as buyer, and make verifiable payments under the land contract for 12 months. After this, you can get a valid deed upon the payoff of the land contract.
I am being evicted from my Home that I had purchased on land contract. Can I remove the improvements that I made, such as installing new cabinets and a new water heater?
Generally “no,” you cannot remove these items as stated. This is because these items have become “attached” to the home and cannot be removed.
I am able to pay my land contract off early, but the land contract owner won't let me. What can I do?
The land contract provisions control. However, generally Michigan law, as well as federal law, have certain restrictions concerning land contracts and prepayment. I suggest having a competent real estate attorney review your land contract before taking further action.
Why Clients Choose Us
Know the Difference.
Former Big Bank "Insider"
HigHest Peer and Client Ratings
24 Hour Response
30 +Years of Legal & Business Experience
Affordable & Approachable
Innovative & Creative solutions
Legal Matters We Handle
Real Estate Law
Real estate and finance law are their own legal specialties. So how do you determine which attorney you should work with...
Contracts regulate expectations between parties. Working without a contract is comparable to walking a high wire without a net.
David Soble has decades of experience as a 'big bank insider." He and his business management team are uniquely situated when it comes to handling our clients stressful financial...
We regularly and successfully litigate real estate and contract issues. While we prefer to first resolve our client's issues reasonably and amicably, we can and certainly will escalate....
For most people, their home, or other real estate, is the most valuable asset that they own. We're dedicated to protecting our clients' assets and ensure that their legal interests...
What Happy Clients Say...
Don't take our word for it! We're one of the best reviewed law firms in the community.
See hundreds of our reviews on Google, Avvo, Social Survey and Linked In.
"l was a client of Mr. Soble and he was very pleasant to work with and he took my case right away. He took time to answer all the questions and concerns that l had. When l called him, he got back to me that same day. We settled on an offer, and then received our check in a timely matter. l recommend the Soble Law firm for all your real estate needs because they take care of business."
Lisa S., Southgate, MI
The balance for one of my credit cards was over $14,000. In less than one week David and his staff were able to negotiate a new balance for less than $4000. We saved over $10,000. This was for just on one of our cards. I have to admit that my husband and I were skeptical at first, but they delivered. I now understand why the meaning behind the name. David and his staff are truly a Proven Resource!
"Attorney David Soble lives up to his firm's namesake, "Proven Resource." I appreciate knowing that when my clients need a diligent and responsive real estate or contracts attorney, I can easily make the referral to David, David is well worth having on your side."
Dino Lembesis, S. Lyon, MI
-Financial Adviser, Brighton, MI
Join Our Mailing List!
Get our print newsletter and other great information
Our Latest Blog Posts
While flipping is a great way to make a quick profit, this endeavor requires realistic expectations and well-laid-out plans for every step of the process in advance. All too often, wide-eyed first-time buyers entering the fix-and-flip market are excited by television...
Perhaps you have experienced your own frustration with your county’s recording office before. You read through all the necessary requirements for recording a deed or other real estate instrument with your county recording office, only to have it rejected and returned...
Technology was supposed to be the answer to the mountains of paper that go along with managing a business. But the digital files can form mountains just as high, or worse--get lost in the seemingly bottomless crevasses of your hard drive. Whether it is paper piles or...