Posted by Dave on July 04, 2003 at 12:03:02:
That sounds like a great idea. I don’t know why my attorney did not come up with it!
Nonrecorded Contract Sale= Simple Eviction? - Posted by Dave
Posted by Dave on July 03, 2003 at 23:56:42:
If a Contract Sale is not recorded by a title company, then how do you get rid of a delinquent buyer? Do you do a simple eviction or do you then run the risk of being sued for unlawful eviction when they claim an equitable interest in the property?
Forfeiture of RE Contract - Posted by John Merchant
Posted by John Merchant on July 06, 2003 at 09:16:46:
This is set out, state-by-state in a body of law generally known as RE Contract Forfeiture. It can differ considerably from D/T foreclosure.
In my State of Wa, for example, the Contract holder simply files & sends defaulter a (canned, specific statutory,legal form) Notice of Forfeiture, and a couple of months later, should the delinquent debtor not have brought the payments current & paid the costs(as is his right under WA law)it’s a done deal and the full rights to the RE return to the contract seller.
No Sheriff’s or Trustee’s sale, as under a D/T is required to do one of these.
After it’s done, the contract holder can evict the ex-buyer, as an illegal squatter.
Difference in D/T Trustee’s sale, in WA, is that under the D/T foreclosure procedure, there is NO right to cure, and the debtor cannot bring the loan current, except by 100% payoff, but the D/T foreclosure is a LOT more costly in terms of legal fees & costs of publication. And takes longer. And one must have licensed WA lawyer or a corporation to complete foreclosure procedure.
Experienced contract sellers in WA do contract forfeitures for themselves, as is their right, but it’s quite normal and usual for them to simply take QC Deed from defaulter in lieu of the forfeiture action…the incentive to the defaulter is it is a voluntary (in appearance) conveyance instead of a repo, so it might look better on his credit report.
Re: Nonrecorded Contract Sale= Simple Eviction? - Posted by JohnBoy
Posted by JohnBoy on July 04, 2003 at 10:55:46:
All depends on your State laws. Some States require a judicial foreclosure to take the property back when selling on CFD. Some only require an eviction.
In my State (IL), if you sell on CFD where the term of the contract is for less than 5 years AND the buyer has less than 20% equity in the property, you can evict them like a tenant. It does not matter if the contract is recorded or not. That is why the seller will usually require the buyer to sign a quit claim deed that deeds all of the buyer’s interest in the property back to the seller. The quit claim deed is held in escrow with written instructions where if the buyer performs escrow will deliver the deed back to the buyer when they pay off the seller. If the buyer defaults escrow will release the quit claim deed to the seller where the quit claim deed will be recorded to release all the buyer’s interest in the property. Then the seller files for eviction.
If the CFD is for a term of more than 5 years and the buyer has more than 20% in equity the seller must go through a judicial foreclosure to get the property back.
This is why we use short term contracts, typically 1 - 2 year terms, where at the end of one or two years the entire balance is due in full. The buyer will need to refinance the property at this time to pay the seller off.
Each State has different laws pertaining to CFD sales. You will need to check the laws pertaining to your State.