Under a land contract the seller retains legal title while the buyer takes possession and pays in instalments, receiving a deed on completion. It remains common where conventional financing is unavailable.
Buyer’s position. Equitable title, possession, and responsibility for taxes, insurance and maintenance in most forms. The buyer is building equity without a recorded deed, which is why recording the contract or a memorandum of it matters.
Seller’s remedies on default. Forfeiture, which terminates the buyer’s interest and is fast, or foreclosure of the buyer’s equitable interest, which is slower but produces a cleaner result. Statutes commonly regulate forfeiture with notice and cure periods, and courts scrutinise it where the buyer has substantial equity.
Consumer protections. Where the property is residential, disclosure requirements and federal mortgage origination rules may apply to the seller, which sellers frequently do not anticipate.
Existing mortgages. A land contract on encumbered property risks triggering a due-on-sale clause, and the buyer’s payments do not reach the lender directly unless structured to.
Drafting essentials. Payment terms, balloon date, tax and insurance escrow, who repairs, prepayment rights, the deed to be delivered, title evidence, and the default and cure mechanics stated with precision.