Land Installment - Posted by Yettekov Wilson Jr.

Posted by Michael Morrongiello on March 01, 2000 at 22:55:55:

A land installment contract creates an “equitable interest in the title” for the purchaser who is paying on the contract. LEGAL TITLE remains in the sellers name until such time that the repayment terms of the land contract have been fufilled. Then at that time LEGAL TITLE would be conveyed from the seller to the purchaser. If you are a seller, this type of financing may offer you some advantages;

  1. In some states you may not have to foreclose in order to repoesess your property. Although a great number of states now recognize the purchasers rights and legal action may be nescessary.

  2. As mentioned legal title remains in the sellers name. This means that any judgements, liens, etc. that are against the Purchasers for the most part will not cloud the title to the property.

  3. If you don’t record the contract, the seller might also be able to borrow against the property even though it has been sold.

  4. Many states and counties recognize the purchasers interest under a land contract and allow you to declare homestead and take advantages of other tax deductions. This usually is not allowable with an option,


  1. Deed Transfer taxes due when one wishes to sell the contract to a note funder or when the contract terms have been fufiled will come into play and in many states involved additonal expense.

  2. Many of the land contracts are poorly worded. They lack late fees, adequate default clause or acceleration remedies. Some do not call for taxes to be paid by the payor or hazard isurance maintained.

As for Lease Options:

  1. You can sell to a prospective buyer under a lease option and have some of the same beneifits as the land contract. If the option is not excersised you may have to obtain a quit claim deed back from the purchaser to remove their interest of record.

  2. Buying under a lease option allows you to
    Control the property without actually owning the property. IF you choose to walk away from the option then there usually is no further liability you would have unlike a debtor involved in a land contract purchase.

I am sure there are other Pluses and Minuses that others on this board can provide as well that I have not thought ot.

Hope this helps…

Michael Morrongiello

Land Installment - Posted by Yettekov Wilson Jr.

Posted by Yettekov Wilson Jr. on March 01, 2000 at 12:25:50:

I need some help in finding out what a land installment is and how to work a deal using one. I am already familiar with L/O and want to expand my knowledge and levereging power.


Re: Land Installment - Posted by Michael Morrongiello

Posted by Michael Morrongiello on March 01, 2000 at 12:41:21:

I believe you are referring to a land installment contract or land contract type instrument. This is an instrument which is used to finance the sale of a property by a private party seller.

It is recognized as an instrument of indebtneness where the payor on the obligation does not obtain legal title to the real estate being purchased until such time that the installment land contract terms have been fufilled.

Depending on which foot the shoe is on, Land contracts have certain benefits for both the seller and the buyer.

Michael Morrongiello

Re: Land Installment???lease option - Posted by Todd W(co)

Posted by Todd W(co) on March 01, 2000 at 17:39:26:

Michael, you seem to know alot about such things, so can you give me a brief description of both the land installment contract, and a lease option. Your view on which one works better(probably depends on the situation right?)and the differences between them. thanks in advance.
Todd Williamson