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ENFORCEMENT OF LAND CONTRACTS

The current housing market generates more creativity in the use of devices for accomplishing residential sales. Among those devices which involve seller financing are the Lease with Option to Purchase, seller held Mortgages, and Land Contracts. Most people are at least familiar with the concept of how a Land Contract sale works. The Purchaser agrees to pay the agreed purchase price in installments over time while the Seller continues to hold the legal title to the property until the full price is paid with the agreed interest.

The terms of Land Contract forms, however, vary significantly. They can restrict the Purchasers use of the property during its term inclusive of prohibiting removal of minerals, trees, or improvements. They can preclude alterations to the structures. The terms may prohibit the Seller from assigning any interest to anyone else without the Sellers permission.

For the Sellers the form spells out the remedies available in the event of default by the Purchasers. Some forms may provide non-recourse terms which limit the Seller to taking back the property and retaining the down-payment. The typical forms allow the Seller to choose between Forfeiture and Foreclosure. Forfeiture is essentially a means of taking back the property. The Purchaser may redeem the property by paying up any delinquency or curing any default. If the Forfeiture is accomplished through court process (Michigan does recognize self help forfeiture in special circumstances), the usual redemption period is three months.

Foreclosure is a suit for the balance owed on the contract and is based on an acceleration of the entire balance owed. The usual redemption period is 6 months from the date of court ordered sale. Foreclosure can result in the Seller having a Deficiency Judgment against the Purchaser if the court’s sale fails to generate sufficient proceeds.

In a recent case it was held that a Seller was unable to pursue the person who guaranteed the Purchasers performance of a Land Contract where the Seller has elected to pursue a Forfeiture instead of a Foreclosure. As with any real estate transaction it is very important that all parties fully understand the ramifications of the documents they are signing, especially if they are presented as ‘Standard’ forms.

Support Information
Saturday, October 23, 2010
HOMEOWNERS DUTIES EXPANDED
Thursday, October 21, 2010
OIL & GAS LEASES
Thursday, October 21, 2010
NEW LANDLORDS
Sunday, October 17, 2010
RECREATIONAL TRESPASS
Saturday, October 16, 2010
LITTORAL OR RIPARIAN
Friday, October 15, 2010
REDUCTION OF HOMESTEAD EXCLUSION
Wednesday, October 6, 2010
ENFORCEMENT OF LAND CONTRACTS
Monday, October 4, 2010
UTILITY EASEMENT COMPELLED OVER DRIVEWAY
Wednesday, September 29, 2010
HOMESTEAD EXEMPTION FOR SECOND HOME
Monday, September 27, 2010
CHANGES IN TITLE INSURANCE
Sunday, September 26, 2010
REDEMPTION PERIODS
Sunday, September 26, 2010
LANDLORD’S DUTIES
Wednesday, September 22, 2010
FALLING VALUES, RISING TAXES
Saturday, September 18, 2010
INADVERTENT UNCAPPING OF PROPERTY TAXES
Friday, September 17, 2010
TRUST FOR MINOR CHILDREN
Thursday, September 16, 2010
JOINT REAL ESTATE DEEDS TO ‘AVOID PROBATE’
Monday, September 13, 2010
CONTENTIOUS CHARITY
Wednesday, September 8, 2010
TRANSFER TAX RELIEF
Monday, September 6, 2010
DESIGNATION OF PATIENT ADVOCATE
Saturday, September 4, 2010
TESTAMENTARY TRUSTS
Thursday, September 2, 2010
USE OF DURABLE POWER OF ATTORNEY FORMS
Sunday, August 29, 2010
TESTAMENTARY TRUST FOR PET CARE
Friday, August 27, 2010
WHAT ARE THE COSTS OF PROBATE
Thursday, August 26, 2010
GUARDIANS & CONSERVATORS
Wednesday, August 25, 2010
FEDERAL RELIEF PROGRAM
Sunday, August 22, 2010
MORTGAGE GUILT FACTOR
Monday, August 16, 2010
TENANTS OF FORECLOSED PROPERTY
Tuesday, August 10, 2010
EFFECT OF FORECLOSURE SALE
Thursday, August 5, 2010
DEEDS IN LIEU OF FORECLOSURE
Thursday, July 22, 2010
PROPERTY ABANDONMENT
Monday, July 19, 2010
SHORT SALE RELIEF FROM UPSIDE DOWN MORTGAGE
Tuesday, June 15, 2010
MANDATORY LOAN MODIFICATIONS
Thursday, June 10, 2010
CITY LIABLE FOR FLOODING
Friday, June 4, 2010
NON-DISCHARGEABLE CREDIT
Friday, June 4, 2010
PROTECTED ASSETS
Friday, June 5, 2009
CHILD’S MARIJUANA RISKS PARENT’S HOME
ENFORCEMENT OF LAND CONTRACTS
GROWING USE OF MEDIATION
HOMEOWNERS DUTIES EXPANDED
LITTORAL OR RIPARIAN
RESPONDING TO THE U.S. CENSUS
Contact Us at: (248) 693-6245    436 S. Broadway, Suite C, Lake Orion, MI 48362                                 © Copyright 2008 James R. Porritt, Jr. All Rights Reserved.
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