Posted by Brad Crouch on December 07, 1998 at 03:23:23:
> How is a Land Contract voided by recording?
By a clause the seller may have in the land contract, to the effect that “this land contract shall not be recorded, and if the buyer records it or causes it to be recorded, or allows it to be recorded, then this contract is null and void and the status of the buyer reverts to that of tenant, and is subject to the eviction process. All monies paid by the buyer heretofore are forfeit in the event this land contract is recorded, or if a memorandum of this contract is recorded.”
> The history: I’m the white knight, who came out of
> the darkness just before foreclosure to bring the
> mortgage current in exchange for their equity. The
> house would have been sold at the Sheriff sale and
> their credit destroyed. I saved them from that. The
> people separated themselves mentally from their
> problem as well as their property. They will be happy
> to sign anything I ask them to.
Why not just ask them for a deed?
> How do I give up all control with a Land Contract?
> It’s a legal sale. I own the property. They have
> signed a deed held in escrow. What other control is
Sorry, you don’t own the property. It is not yours until the complete amount has been paid off. Just because the seller has signed a deed that is being held by a third party escrow does not mean the property is yours.
As long as the deed is not in your name, you cannot control the property as you may wish, at any time. That constitutes a lack of “total” control.
> The Land Contract is recorded for public notice. The
> seller cannot place a new mortgage against the
> property. I have less fear of the Due-on-Sale Clause
> police than of a seller screwing me up.
Most investors that I know of would sell on a land contract in a heartbeat. But very few buy on a land contract. I think there is one guy here who buys on a land contract whenever he can. I don’t remember his strategy exactly, but he gets rid of the properties right away.