Posted by JohnBoy on May 05, 2004 at 08:56:39:
You should enter into a new contract with the new buyer. Not let them assume the old with.
Since your buyer is responsible for the taxes it doesn’t matter when they sell. They have to pay up the taxes through the month they sell.
For example. Lets say the taxes are $1200 year. That’s $100 a month. The taxes are due in June. If they sold in May they would have to pay $1100 of the taxes due to cover the taxes for the months they had the property. They don’t just get out of paying any taxes because they sold before the tax bill was due.
Purchasers want out of Land Contract - Posted by Eric_c
Posted by Eric_c on May 04, 2004 at 21:34:04:
I have a house I LC’d to a couple.
151K Sale price, 20K down, 20 year term. 7.5 percent interest plus they pay taxes/insurance.
Now they want to sell the house and get out of it. They have a person who wants the same terms which is fine with me, but I wanted a 3K additional fee to get out of the contract. I have my reasons for this, taxes are due and I’d like to cover the taxes and 3 months of my payments in case the new person does not work out.
They are balking at this, but those are the terms I set. The contract states that they could sell the house and we would come to agreeable terms.
If they decide to default on the LC how do I go about foreclosure and regaining posession of the house?
Personally I think push comes to shove they will go with the 3K, they pay 3K or lose 20K, but I would like to explain to them what might happen if they decide to default.
Thanks
Re: Purchasers want out of Land Contract - Posted by JohnBoy
Posted by JohnBoy on May 04, 2004 at 23:23:15:
Are they paying the taxes monthly with their regular payments? If so, then don’t you already have the money for the taxes coming due? They would have already paid for the taxes.
If they haven’t been paying the taxes and are only paying them as they come due, then they would be responsible to pay the pro-rated taxes up until the date they sell.
Or did you collect for the taxes each month and you don’t have the money set aside and now trying to collect extra to cover the tax bill?
As far as excepting the same terms, that is entirely up to you. You do not need to accept any terms if you don’t want to, unless your contract states you will.
Stating you would accept agreeable terms doesn’t mean the same terms. It could be terms where you agree to accept full payment of the balance due. It could be whatever is agreeable to you, unless your contract specifies otherwise.
Re: Purchasers want out of Land Contract - Posted by Eric C
Posted by Eric C on May 05, 2004 at 03:22:25:
No they pay the taxes as they come due, either way we have the taxes covered. The reason that came us is they are due soon, if we agree and put someone new into the property, the taxes are due almost immediatly and that is my concern that the new purchaser will not make the tax payment.
We have an addendum that states if the tax payment is not made ontime by a certain day then the LC is null and void, is that a binding?
We tried to set it up so that if they did not pay the taxes/insurance we could go for possession of the house.