In a real estate setting, installment payments are a major part of certain contracts, namely land contracts or contracts for deeds. Also known as land installment agreements, these are real estate sales contracts in which the seller provides the financing for the buyer. Instead of a mortgager or third party providing the financing or loan, the seller provides the financing.
As part of the sales agreement, the parties will work out installment payments in which the buyer pays back the seller for the amounts promised. This requires much negotiation and planning between the two parties. A land contract will govern the terms of payment and other details.
Disputes over installment payments in land contract due to many factors. Some of these issues may include:
- Non-payment or late payments by the buyer/borrower
- Changing of payment amounts or interest amounts (by the seller)
- Failure to obtain agreements in writing (real estate laws usually require such transactions and agreements to be in writing)
- Seller’s failure to convey title to the property at the proper time (they are usually obligated to do so after the installment payments have been completed)
- Various breach of contract issues
Other disputes in a land contract may include: improper use of the property; various issues with the title (such as a title defect); and the use of fraud in relation to the financing details.
Like most other real estate contract violations, a breach of installment payment terms can result in legal consequences. This may usually result in a damages award for the non-violating party. This can cover losses such as those resulting from non-payments, or from accumulated late payments. Other remedies may be available, such as a requirement from the court that the parties rewrite some of the terms in the contract.
Real estate issues can often be complex, especially when it comes to land contracts and installment payments. You may need to hire a real estate attorney if you need any assistance at all with an installment contract. Your lawyer can help review a contract and can also assist with negotiations. Lastly, if you encounter any conflicts or disputes over payments, your lawyer can help you file a lawsuit if needed.