Real Estate
Land Contracts Written to Hold Up
Seller financing can open a sale that a bank won’t make. We draft land contracts that protect both sides, record them properly, and enforce them when payments stop.
What We Handle
Seller Financing for Sellers and Buyers
A land contract is a sale where the seller acts as the lender. The buyer usually makes a smaller down payment, moves in or takes over the property, and pays the seller principal and interest over time until the balance is paid off or refinanced with a bank.
Land contracts are common in Detroit, where many buyers can’t get conventional financing for older homes, small apartment buildings and commercial property. Done well, they work for both sides. Done with a form from the internet, they often leave gaps that turn into disputes. We represent sellers and buyers, and we review contracts someone else has already drafted.
- Drafting land contracts for residential, multifamily and commercial property.
- Reviewing a contract before you sign as a buyer or seller.
- Recording a memorandum to protect the buyer’s interest.
- Payoff and deed delivery when the contract is paid in full.
- Enforcing the contract through forfeiture or foreclosure.
- Defending buyers facing a default notice.
Common Situations
Why People Call About Land Contracts
Most calls fall into one of three moments: before signing, during payments, or when something has gone wrong.
“I want to sell on terms.”
You own a property free and clear and want monthly income instead of a lump sum, with protection if the buyer stops paying.
“The bank won’t lend, but the seller will.”
You’re buying on a land contract and want to know the terms are fair and your payments are protected.
“My buyer stopped paying.”
Payments are months behind, taxes may be unpaid, and you need to know your options.
“I paid it off and never got a deed.”
The final payment was made, but the seller died, moved or never signed the deed over.
“I got a notice of forfeiture.”
The seller is trying to take the property back and you need to understand the deadline and your rights.
“The seller still has a mortgage.”
You learned the property you’re paying for has a loan against it in the seller’s name.
How We Work
From Terms to Final Deed
Set the Terms
We go over price, down payment, interest, payment schedule, balloon date and who pays taxes and insurance.
Draft and Review
We prepare the contract, or review the other side’s draft, and explain every clause before anyone signs.
Close and Record
We handle signing, record a memorandum of land contract, and make sure required transfer filings are made.
Payoff or Enforce
When the balance is paid, the deed goes to the buyer. If payments stop, we pursue or defend the remedy.
Plain English
How a Michigan Land Contract Works
Who Owns What
During a land contract, the seller (the vendor) keeps legal title, the name on the deed. The buyer (the vendee) holds what is called equitable title: the right to possess and use the property and to receive the deed once the contract is paid. In most contracts the buyer is responsible for taxes, insurance, repairs and upkeep from day one.
Key Terms to Get Right
- Purchase price, down payment and interest rate.
- Monthly payment and how it is split between principal and interest.
- Any balloon payment date by which the buyer must refinance or pay in full.
- Who pays property taxes and insurance, and how the seller confirms they are paid.
- Late fees, default terms and the notice the seller must give.
- Whether the buyer can sell or assign the contract, and whether prepayment is allowed.
Recording a Memorandum
A memorandum of land contract is a short document recorded with the county register of deeds. It puts the world on notice that the buyer has an interest in the property, which helps protect the buyer if the seller tries to sell or borrow against it again. Buyers should insist on it. Sellers benefit too, because a clear record makes the eventual deed transfer simpler.
When a Buyer Defaults
Michigan law gives sellers two general paths. Forfeiture, available when the contract includes a forfeiture clause, is a faster proceeding in district court that ends the contract and returns possession to the seller, after required notice and a period during which the buyer can catch up. Foreclosure is a court action, similar to a mortgage foreclosure, that leads to a sale of the property. Which path fits depends on the contract terms, how much the buyer has paid, and the condition of the property. Buyers have rights in both, and strict notice requirements apply.
What to Watch For
- Buyers: get a title search before signing and confirm whether the seller has a mortgage.
- Sellers: check whether your own mortgage allows a sale on land contract.
- Keep a written payment record on both sides.
- Plan for the balloon date well before it arrives.
Questions
Land Contract FAQ
Is a land contract the same as rent-to-own?
No. In a land contract the buyer is purchasing the property from the start and builds equity with each payment. A lease with an option to buy is a rental with a right to purchase later. The legal rights are very different.
Do I need a lawyer if we already agreed on the price?
The price is only one term. Default rules, tax and insurance responsibilities, balloon dates and recording all matter, and gaps in those terms are where most disputes start.
Who pays the property taxes?
Usually the buyer, either directly or through an escrow with the seller. The contract should say exactly who pays and how the other side can confirm payment.
What happens when the contract is paid off?
The seller signs and delivers a deed to the buyer, which is recorded. If the seller is unavailable or refuses, the buyer may need help to get the deed or a court order transferring title.
Can a seller take the property back right away if I miss a payment?
No. Michigan law requires written notice and a court process, and buyers generally have a chance to cure the default. Act quickly if you receive a notice.
Can a land contract be used for commercial or multifamily property?
Yes. The same structure works for small apartment buildings, mixed-use and commercial property, though the terms are often more detailed.
Related Practices
Other Real Estate Work
Purchase and Sale
Conventional purchase agreements, due diligence and closings.
Learn moreTitle and Boundary Disputes
Clearing title when a seller never delivered a deed or the record is wrong.
Learn moreAll Real Estate Services
Leasing, landlord counsel, zoning and the rest of our real estate practice.
Learn moreTalk to Kyle
Selling or Buying on a Land Contract?
Tell us the terms or the problem. You’ll hear back from Kyle within one business day.