Land Contract
Hello everyone. I just had a quick question about a land contract. This person has some houses that he wants to sell me, but he sold them on land contract back in January. Ok, here is the situation. The guy that the houses were land contracted to has never paid on time, and is now a couple of months behind. The land contract was never recorded. The owner of the houses then proceeded to call section 8 and have them send him the checks directly to him so that he could make his mortgage payments. Now, this guy that land contracted them is saying that he spoke to an attorney and he can't just make the contract void like that.
So, where does that leave the guy who land contracted these legally? What does he need to do since the land contract was never recorded? At what point, and how, can he take these houses back?
I really apprecite your help.
God Bless.[ Edited by miraclehomes on Date 05/28/2004 ]
MH:
Not an attorney, so take this as you will.
You don't record a land contract--you record deeds or interest in a property. When the owner bought those properties, he should have recorded the deeds in his or his entity's name. When selling on a land contract, all you are doing is having the buyer pay you for a certain period of time before you sign the deed over to the buyer (which he should then have recorded to show his right of ownership or "title" in the property). Until the buyer satisfies the land contract terms, the owner (the person on the recorded deed) is still the owner of that property, not the buyer.
If a buyer fails to make payments, the seller's contract for deed (land contract) should stipulate what course of action is to be taken, both by the seller (foreclose/eviction process, repossession, timeframe of notices, etc.) and by the buyer (remedies, timeframes, responsibilities, etc.).
By having section 8 send payments to him directly doesn't SEEM like it voids the contract, although I don't understand why the owner doesn't foreclose/evict and put a new buyer in there.
It will depend on the state he's in and the wording of the land contract as to how he can take the houses back--eviction, judicial foreclosure, etc.
Of course, the best remedy is to seek professional legal counsel, etc. etc.
Andy[ Edited by arytkatz on Date 05/28/2004 ]
Ok. First off, thank you for help. Second, I do in fact record land contracts. I have been doing this for around 9 years, but wasn't sure what his options were since he did not properly write his land contract so that he has an out. Anyway, thanks again.
2 things.
Check if he can sell the land contract (assignment cluse typically) and do you want to by a land contract that's in default?
If it's at a big enough discount, it might be worth the forclosure process.