Land Contract

LAND CONTRACT

Also known as an installment purchase contract, a land contract is an agreement drawn between a buyer and seller for the sale of property. Transfer of property to the buyer can only be done when all payments have been made. It is a written and signed contract in which a seller agrees to sell and a buyer agrees to buy property. The selling price is paid over a period of time on terms defined in the contract.

Land contracts are extremely common all over the country. It is a relatively simple document but despite its simplicity it is ideal to seek legal assistance when drafting this kind of contract.

A land contract will cover the following topics:

1. parties to the contract
The contract should specify the seller (Vendor) and the buyer (Vendee) and their respective addresses.

2. legal description
The parcel of land to be sold must be carefully described in this document. This should match the description found in the deed. The city, village or township of the property is noted, together with the county and state. Besides the land to be sold, the seller must also describe the things found on the land to be included in the sale, like buildings, tenements, improvements and appurtenances.

3. price and terms of payment
The contract should signify the total purchase price, down payment, beginning balance and remaining balance, terms of payment, interest rate and due dates of payments to be made.

4. taxes and insurance
The contract should indicate which party is responsible for making tax and insurance payments.