Here's a link dated September 19, 2011 with updated information on this
And here's a link to a video on the topic:
The bottom line appears to be that he original poster will not have any
issues related to the S.A.F.E. Act regarding providing owner financing when
selling his/her property -- primarily because he/she is not habitually
providing owner financing, but instead is just doing it with this one
property that is being sold to a consumer buyer.
On 10/6/2011 7:48 PM, email@example.com wrote:
The "land contract" deal became popular c. 1980 to get around "due on
sale" clauses in mortgages. At that time, the mortgages rate was in
the double digits and mortgages were hard to get. The "land contract"
let the buyer effectively assume the old mortgage without the permission
of the mortgage holder.
I was the buyer in such a deal back then.
The key is to get a lawyer who has worked out the details and can
protect both buyer and seller. Among other things, the lawyer set up a
lien on the property for me so that if the buyers' died (which they did)
the heirs can't get carried away. It worked quite well. The only
paperwork that actually was filed in the courthouse was my lien!
Frankly, in today's market/economy I don't see the need for this.
There is another type of "land contract" where the owner effectively
leases the land on a net basis (lessor pays taxes, etc.) to the "buyer"
for a LONG time. Typically, the term can be 100 years. Sometimes
very expensive buildings are put on the land. When the lease is within
a decade or two of expiring, some serious negotiations take place. The
lessor will tend to simply let the building rot away while getting as
much rent as he can from his tenants. Usually, a new deal is cut with
a new land contract.
Back in the '80s, at least one apartment building that sat on leased
land was converted to condos. In something like 20 years the condos
would revert back to the land owner! I never found out whether anyone
actually bought the condos and whether the paid a low price.
In the land lease contract, it's good to get a lawyer but it's not all
that usual except for the long term.
> Now the paperwork
I'm not a lawyer but the "deal is signed" wherever the parties can get
together. It can be done with the parties in two different states (or
even two countries). The fax machines get a real workout. But the
contracts are IAW the jurisdiction where the property is located and
that's where they, usually, are filed.
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