Buying a home under a land contract can represent a major step forward in your life. In many ways, it is just as significant as buying a home with a mortgage: it’s a step toward permanence, stability, and freedom from the whims of unscrupulous landlords.
However, if something goes wrong—if someone tries to take the property away from you by eviction or foreclosure—you should consult an experienced land contract foreclosure defense attorney as soon as possible. Defending a land contract foreclosure is complex, often involving legal technicalities with which lawyers who don’t regularly handle land contracts may not be familiar.
At Slater & Zurz LLP, we’ve been handling real estate matters for over 40 years. As land contracts became more popular and sellers’ abuses more pervasive, we expanded our practice to include a focus on land contract foreclosure defense to help and protect the increasing number of people purchasing their homes under land contracts. We’ve successfully represented countless clients facing the prospect of losing their property—and often, a significant investment. We understand where you’re coming from, and we’re here to help! Call or email our foreclosure defense team for a free consultation. We’ll review your land contract and any court papers you may have received, evaluate the strength of your position, and suggest a strategy to protect your home and your investment against any unlawful or predatory attempts to take what is rightfully yours.
Ohio law may protect you, as a land contract purchaser, from a hasty eviction.
Ohio recognizes the special characteristics of land contracts and affords you certain rights as a purchaser. In many ways, these rights resemble the protections provided to traditional buyers in mortgage foreclosure actions. However, a land contract purchaser must satisfy certain statutory requirements to take advantage of these rights.
In Ohio, to be recognized as a potential owner of the property with greater rights than a mere tenant, you must have done one of the following:
- Paid 20% of the purchase price of the property, or
- Made payments for five years.
You don’t have to have done both—just one or the other. If you have done either, you are entitled to the protections available in a foreclosure action.
- The eviction process is designed to expeditiously remove tenants upon a simple finding, in what is usually a brief hearing, that, g., they missed a rental payment. On a date set by the court, a court officer or law enforcement officer will see that the tenants and their possessions are removed from the property. Items that the tenants don’t take with them may be left at the curb unattended. The entire process may take less than a month.
- A foreclosure action affords the homeowners substantially greater protection, as well as more time. The homeowners must miss three mortgage payments before a foreclosure action can be filed. If the lender wins the case, the property will be sold. Any sale proceeds above the amount owed to the lender and other lienholders go to the homeowners. The homeowners can negotiate a settlement, assert various defenses and/or declare bankruptcy and get up to five years to make up for missed payments and keep the home. If the homeowners are unsuccessful and the property is sold, they can then be evicted.
Some land contract sellers, or vendors, will file eviction actions when the purchaser has made the number of payments or paid the amount necessary to be entitled to the rights and protections available in a foreclosure action. If you receive an eviction complaint (typically from a municipal court), and have paid 20% of the purchase price or made payments for five years, you should contact a foreclosure defense attorney immediately!
At Slater & Zurz, we can determine whether you have the right to the protections available in a foreclosure action. If so, we can demand that the eviction be dismissed and, if the issue cannot be resolved by negotiation, a foreclosure action be initiated if warranted. Don’t risk losing your home and all the equity you have built up! Call or email us to schedule a free consultation with a foreclosure defense attorney. We’ll review your land contract, your court papers, and your payment history and let you know what your rights are. We’re on your side, and we’re willing to fight for what’s right!
Your land contract is critical in determining your rights.
The first step in any land contract foreclosure case is examining the contract itself. Does the contract comply with Ohio law? Has the contract been followed by both parties? If it has not been followed, who breached the contract?
Many of the requirements of a land contract are simple. Did both parties sign it? Was the purchase price stated in the contract? What was the down payment? There are a number of required terms, including these:
- The full names and current mailing addresses of all parties to the contract;
- The date when the contract was signed by each party;
- The purchase price of the property;
- The amount of the down payment;
- The balance owed (purchase price plus any additional charges or fees, minus the amount of the down payment);
- The amount and due date of each installment payment;
- The interest rate on the unpaid balance, and the method of computing the rate;
- A statement of any encumbrances on the property, such as mortgages, liens, etc.;
- A provision that if the vendor defaults on his or her mortgage on the property, the purchaser can pay on the vendor’s mortgage and receive credit on the land contract for the amount(s) paid;
- A provision requiring the vendor to record the land contract with the county real estate records; and
- A provision that the purchaser will be responsible for paying taxes and other charges against the property unless agreed to the contrary.
The inclusion of these terms in a land contract makes it easier to defend against an eviction or foreclosure. For example, the recording of the contract can help protect you against the vendor’s creditors, and serves as a warning to anyone who might offer your vendor a second mortgage or place a new lien on the property. If a required term was left out of your contract, don’t worry—the omission is not likely to be fatal to your claim.
Your vendor isn’t the only one who can foreclose on your property.
You can be faced with foreclosure based on your vendor’s default on obligations to others:
- If you are current on your land contract but your vendor defaults on his or her obligation to a third party, the third party can place the property you’re buying in foreclosure.
- A third party can place a new lien on the property you’re buying if your vendor defaults on an obligation to the third party.
If a third party initiates foreclosure proceedings against your land contract vendor, seeking to foreclose on the property you are purchasing, it is imperative that you participate in those proceedings. Your interests can be permanently impaired if you fail to protect your rights.
A land contract can also be foreclosed upon by a third party, such as the county seeking unpaid taxes. Generally the buyer of the property is responsible for all taxes, and if taxes are not specifically addressed in the land contract the law holds the buyer responsible. Even if the contract provides that the vendor is responsible for taxes, the county or other local authority can begin a foreclosure proceeding. If the tax debt has been sold, the party that purchased the tax debt may also initiate a foreclosure proceeding. In this instance as well, it is essential that you consult a foreclosure defense attorney.
One of our foreclosure defense attorneys at Slater & Zurz can intervene on your behalf in a third party’s case against your vendor, challenge a third party’s lien if it impairs your interest in the property, or represent you in an action concerning debts that the vendor agreed to pay. If a third party’s claim threatens your rights with respect to the property that’s the subject of a land contract, call or email us for a free consultation. We will assess the risks posed by the third party’s claim, and recommend what we believe is the most effective strategy for protecting your interests.
Trust an experienced, full-service law firm to assist you in your efforts to protect your home and your rights under your land contract.
At Slater & Zurz, we understand what your home means to you. We’re aware of all the options available to you, whether you want to keep your home or would rather surrender it to protect your credit record. Call or email our foreclosure defense team to schedule a free consultation. One of our foreclosure attorneys will review your land contract, court papers, and related documents, and will discuss your finances, short-term needs and long-term goals. Even if you don’t want to keep the property, we can help you negotiate the best exit terms possible. You may be entitled to some equity in the property, but you won’t get it if you ignore the foreclosure proceedings.
Whether you’ve been sued in an eviction or a foreclosure action, or whether a third party is claiming an interest in the property, we’ll tailor a plan designed specifically for you, to address the legal issues and achieve your primary objectives. When you need us, we’ll be there for you!