Posted by Michael(KCMO) on July 12, 2007 at 08:57:01:
Jeff,
I don’t know the answer to your question, but I would also post over on the note forum if you haven’t done so already.
Very creative deal, btw. Definitely a lot of problem-solving that went into it. That’s what we ultimately get paid for, after all.
Regards,
Michael(KCMO)
Default language for Land Contract - Posted by JeffB (MI)
Posted by JeffB (MI) on July 12, 2007 at 06:58:13:
I’m selling a L/H property on a land contract next week. The lady at the title company says that what a lot of sellers do, is have the buyer sign a quit claim deed at closing which does NOT get recorded unless the buyer defaults on the land contract agreement. In such a case, they record the QCD and from there it would be easier to get the person out.
Dyches Boddiford has a clause in one of his contracts (Agreement for Title and Possession, I believe) that states if the contract is declared in default by the seller, that the agreement automatically converts to a rental agreement and all payments received shall be considered rent.
Both of these concepts seem to circumvent the legal rights of the buyer, but I need to talk to my attorney to see if it’s legitimate to do this. What I’m considering is having my buyer sign a QCD at closing, AND a rental agreement so that if they default, it becomes a rental (legitimately) and I can have them out in 27 days via eviction.
This all might seem like overkill but this is a property I’m acquiring by buying a defaulted land contract note. I have renegotiated the terms with the buyer (who was not paying for 2 years) and they are coming up with a considerable down payment in exchange for not being kicked out immediately. However, I do expect that at some point (soon) they will again be in default despite lower-than-market loan payments. I’m trying to be prepared for that inevitable moment.
I’d appreciate any comments or advice on handling this situation.
Jeff
Re: Default language for Land Contract - Posted by TeddyB_SC
Posted by TeddyB_SC on July 12, 2007 at 10:43:31:
I purchased 2 MH lots two years ago using the QCD method. The owner financed the property at a low, fixed rate for 15 years. If I am 30 days late on a payment they contact the closing attorney and the QCD is recorded.
I have no problem with this setup and its a fairly common practice with owner financing.
TeddyB_SC