LAND CONTRACTS | The Lawyers & Jurists

TABLE OF CONTENT:

(1) Introduction 1

(2) Offer and acceptance 2

(3) Summary of important issues for contract 3

(4) LAND CONTRACTS 4

(5) Suspicious 5

(6) XCEPTIONE 6

(7) What Is a Foreclosure 7

(8) A LAND CONTRACT SHOULD BE IN WRITING 8

(9) If I Do Not or Cannot Pay on My Land Contract, What Happens? 9

(10) What Is a Foreclosure? 10

(11) Read before you sign 11

Introduction [1]

A contract is a legally enforceable agreement between two or more parties with mutual obligations. The remedy at law for breach of contract is “damages” or monetary compensation. In equity, the remedy can be specific performance of the contract or an injunction. Both remedies award the damaged party the “benefit of the bargain” or expectation damages, which are greater than mere reliance damages, as in promissory stopped. If jurisdiction in the case is in personam or quasi in ream the court may not exercise that jurisdiction unless the defendant has “minimum contacts” with the state in which the court sits generally, the requirement of minimum contacts means that the defendant has to have taken actions that were purposefully directed towards the forum state. Such actions may include, among others, selling goods in the state, being incorporated in the state, visiting the state, or bringing property in the state. In order to exercise jurisdiction, such minimum contacts are required by the defendant’s Fourteenth Amendment federal constitutional right to due process. Even if the defendant’s minimum contacts with the forum state are found to exist, the court will not exercise jurisdiction if considerations of “fair play and substantial justice” would require making the defendant defend in the forum state so unreasonable as to constitute a due process violation. Minimum contacts can consist of either some type of systematic and continuous contact with the forum or isolated or occasional contacts purposefully directed toward the forum. A single contact can suffice to establish personal jurisdiction, but where jurisdiction is based on a single contact, the nature and quality of the contact is determinative. The principal test of foreseeability in a due process analysis “is that the defendant’s conduct and connection with the forum state are such that he should reasonably anticipate the possibility of defending a suit in the forum. A defendant cannot reasonably anticipate out-of-state litigation unless he has purposefully availed himself “of the privilege of conducting activities within the Forum State, thus invoking the benefits and protections of its laws

[2]Offer and acceptance:

The most important feature of a contract is that one party makes an offer for an arrangement that another accepts. This can be called a concurrence of wills or consensus ad ideas of two or more parties. The concept is somewhat contested. The obvious objection is that a court cannot read minds and the existence or otherwise of agreement is judged objectively, with only limited room for questioning subjective intention. Richard Austen-Baker has suggested that the perpetuation of the idea of ‘meeting of minds’ may come from a misunderstanding of the Latin term ‘consensus ad idem’, which actually means ‘agreement to the [same] thing’. There must be evidence that the parties had each from an objective perspective engaged in conduct manifesting their assent, and a contract will be formed when the parties have met such a requirement. An objective perspective means that it is only necessary that somebody gives the impression of offering or accepting contractual terms in the eyes of a reasonable person, not that they actually did want to form a contract.

Offer and acceptance does not always need to be expressed orally or in writing. An implied contract is one in which some of the terms are not expressed in words. This can take two forms. A contract which is implied in fact is one in which the circumstances imply that parties have reached an agreement even though they have not done so expressly. For example, by going to a doctor for a checkup, a patient agrees that he will pay a fair price for the service. If one refuses to pay after being examined, the patient has breached a contract implied in fact. A contract which is implied in law is also called a quasi-contract, because it is not in fact a contract; rather, it is a means for the courts to remedy situations in which one party would be unjustly enriched were he or she not required to compensate the other.

[3] Summary of important issues for contract:

[4]Written contracts:

If the contract has been formally written and signed by the parties, there is an assumption that all the terms of the agreement are contained in the written document regardless of what may have been verbally agreed.
Contracts can be a combination of written and verbal agreements when the written agreement itself covers very few terms.
When a contract is signed, it is assumed that all the terms have been read and agreed to.
If unsigned, a written contract must:
- Be recognized by all parties as a contract, that is, it must look like a contract and not simply a receipt or docket.

[5]Verbal agreements

Verbal agreements rely on the good faith of all the parties and can be difficult to prove.
Conversely, in some situations, insisting on a detailed written agreement may be counter-productive if:
- The value of the transaction is not particularly high
- The presentation of a substantial document, possibly with many provisions, may raise more questions and uncertainty in the minds of the parties than it resolves, ending in the transaction not proceeding.

[6]LAND CONTRACTS:

LAND CONTRACTS are reading this pamphlet because you either want to buy a home and be able to make payments, are having problems with an existing land contract, or just want to know more about land contracts. This pamphlet is not a substitute for legal advice.

What Is a Land Contract?

1. A Land Contract is an agreement by a Seller to sell you land and a house on that land (in the state of Ohio) for an agreed price. A mobile home can be sold on Land Contract only if it is affixed to (that is, a part of) the land being bought.

2. You agree to make installment payments or monthly payments of the agreed price, plus interest, until paid in full.

3. The Seller agrees to transfer the deed to you after all of the payments have been made.

What Isn’t a Land Contract?

1. Leases with an option to purchase real property or rent to-buy agreements are not Land Contracts. These are screwy legal deals. If you have one, talk to a lawyer.

2. Under Ohio law, the Land Contract must be for a home and the property the home sits on, not just land. It can be for a mobile home only if the mobile home is affixed to the land.

3. You cannot use a Land Contract to buy just a mobile home without the land. To buy a mobile home on Land Contract, the mobile home must have been made part of the land by the Auditor. If you think you have bought just a mobile home on a Land Contract, talk to a lawyer.

What Law Governs?

Land installment contracts are regulated by Ohio Revised how do you know if a mobile

Home is affixed to the land? You can look to see if there are wheels attached to the mobile home or if it is on a permanent foundation.The best way is to go to the Tax Office in which the property is located to determine if JUST real estate taxes are being collected. If JUST real estate taxes are collected, you can buy the mobile home on Land Contract because the mobile home is attached or affixed to the land. If any other type of taxes is collected, talk to a lawyer before signing a Land Contract.

You Enter into a Land Contract

• Who owns the property? Does the person trying to sell me the property really own it? Ask to see the deed. Are there any other Land Contracts on the property? Will you get clear title? Go to the County Recorder’s Office to find out

• If you buy the property on Land Contract, you will have to make all repairs that are needed on the property after you make an agreement.

• What is the condition of the property? What sort of repairs am I going to have to do? Can I afford them? • Walk through the property carefully condition, get it in writing, as part of the contract. If the Seller will not put it in writing, be very wary or

[7]Suspicious:

• Check with the Seller—you may be responsible for taxes on the property and homeowner’s insurance. Will you be able to afford these and a monthly payment? Ask the County Auditor if there are any unpaid taxes on the property.

• Can I afford payments and pay taxes, insurance and repairs on my income? What may have been a bargain may turn into a nightmare.

• How much of a down payment is expected? If I move, will I get any money back? Do I have the money?

• Who is drawing up the papers? What costs will be involved?

Get a copy of all papers to review BEFORE signing.

• Where will the Land Contract be recorded? If you are

Told that it will not be recorded, do not sign. The law requires Land Contracts to be recorded!

• Before you sign any contract, you should contact an attorney to review the paperwork.

• Walk away and think about it. If it is too good to be true, it is. UA Land Contract should be in writing U

What about the down payment? Unless you and the Seller agree otherwise, you will not get your down payment back if you do not pay the Land Contract. If you pay more than 20%, or have been paying for five or more years, you may get some money back.

What Should Be Contained in a Land Contract?

Every Land Contract should be signed in duplicate (two copies), and a copy of the contract given to both the Seller and to you (the Buyer). At a minimum, the following should be included in a land installment contract:

• The names and current mailing addresses of all parties to the contract;

• The date the contract was signed by both parties;

• A legal description of the property to be sold;

• The contract price of the property;

• Any charges or fees for service that is included in the contract separate from the contract price;

• The amount of the Buyer’s down payment;

• The principal balance owed;

• The amount and due date of each installment payment;

• The interest rate on the unpaid balance and the method of computing the rate;

What If My Land Contract Does Not Have These

Terms?

Ohio courts have upheld Land Contracts which do not meet all of the above terms. Courts generally will look at the intent of the parties. Did the parties intend to have a Land Contract? That is why a written contract which contains all of the legal requirements is important. If you are in any doubt, consult with a lawyer. If you are a senior or low income, call your local Legal Services

[8]XCEPTIONE:

A mortgage that covers more property than just the real property sold on Land Contract to the Buyer is acceptable if the Seller has made prior written disclosure to the Buyer of the amount of the mortgage.

• A Seller cannot put a mortgage on property being sold by Land Contract during the Land Contract in an amount BIGGER than the balance due on the contract without the consent of the Buyer.

What the Law Says a Seller Must Do

• Every Seller must, at least once year or upon your demand, (but no more than twice a year), give you a statement showing the amount paid in principal, amount paid in interest, and the remaining balance owed.

• The Seller must RECORD the Land Contract in the County Recorder’s Office where the property is located within 20 days of signing, and it shall contain the legal

Description of the property. If the Seller does not record it, you should record it to protect your interest.

If I Do Not or Cannot Pay on My Land Contract,

What Happens?• If you fail to make a payment or fail to comply with other terms of the Land Contract for 30 days, you may lose your rights to remain in the property.

• If, before those 30 days are up, you make all payments currently due under the contract, pay any fees and charges which you owe under the Land Contract, and begin complying with all other terms, you should not lose the property.

• If, at the end of the 30-day period, you are still behind in your payments, fees or charges owed under the Land Contract, or are not complying with all other terms, the Seller must give you a WRITTEN NOTICE if the Seller wants to end the Land Contract. The notice must

Include:

1. An indication that there is a Land Contract and the address of the property;

2. A reason(s) for ending the contract; and

3. A statement that the Buyer has ten days to correct the problem.

• This notice must be served by the Seller by handing you a written copy of the notice, by leaving it at the property which is the subject of the Land Contract, or by mailing it to you by registered or certified mail to your last known address.

• After the ten-day notice period, the Seller can file court action if you have not

Corrected the default and complied with the contract.

[9]What Is a Foreclosure?

If you have paid more than 20% of the contract price, or the Land Contract has been in force for five years and you have been paying, the Seller must FORECLOSE. This means that a legal action is filed and if you lose, the property is sold. If the property is sold for more than what is owed on your Land Contract, you will get what is left. That is why it is important not to just walk

Away or move out if you get a notice. You have valuable rights. You should contact a lawyer.

What If I Made Improvements or Repairs?

You may be able to get reimbursed the value from the Seller for improvements or repairs made to the property. You may have to go to court to do that. You should keep all receipts for the work done and materials bought. You may want to consider adding reimbursement for the costs

Of repairs and improvements to your Land Contract. You should contact a lawyer regarding your rights.

What You Need to Know about Lead Paint

Lead poisoning is having too much lead in the body. Lead poisoning is a serious health problem that affects people’s minds and bodies. Children under age six and unborn children are at the greatest risk of harm from lead poisoning because their bodies and nervous systems are still developing. If the home you are considering buying on Land Contract was built before 1977 and you want to know if the house contains lead paint, you should contact your local Health

Department to have the home tested. Ask the Seller if there is lead paint. Look for chipping paint and dust. Lead can also be in the dirt around the house. Lead poisoning is serious. Do not agree to buy a house which has lead paint. If the Seller refuses to give you the required lead paint notice, walk away. For more information on lead issues, you can contact your local Health Department, your child’s doctor or local clinic, or your local Legal Services office at 1-866LAW-

Things to Keep in Mind

°A Land Contract that does not contain all of the terms required by Ohio law can still be good. You should contact an attorney. If you cannot afford an attorney, contact your local Legal Services.

°A written contract protects both the Buyer and the Seller. It helps the Buyer to make more informed decisions. And it helps both parties to know their rights.

Read before you sign.

°Oral Land Contracts can sometimes be valid. You should contact an attorney or you’re local Legal Services immediately if you think that you have this type of Land Contract. °When reviewing a written instrument, courts must look to what the parties thought they were getting—the intent should be gathered from the written language. °If the contract is not clear, the contract is interpreted against the party who wrote the contract.

°Record your Land Contract to protect your rights.

[10]A LAND CONTRACT SHOULD BE IN WRITING

What If My Land Contract Does Not Have These Terms?

[11]What the Law Says a Seller Can’t Do

• A Seller cannot sell property by Land Contract if the Seller owes more on a mortgage on that property than the balance due under the Land Contract. EXCEPTION: a mortgage that covers more property than just the real property sold on Land Contract to the Buyer is acceptable if the Seller has made prior written disclosure to the Buyer of the amount of the mortgage.

• A Seller cannot put a mortgage on property being sold by Land Contract during the Land Contract in an amount BIGGER than the balance due on the contract without the consent of the Buyer.

[12]What the Law Says a Seller Must Do

• The Seller must RECORD the Land Contract in the County Recorder’s Office where the property is located within 20 days of signing, and it shall contain the legal

Description of the property. If the Seller does not record it, you should record it to protect your interest.

[13]If I Do Not or Cannot Pay on My Land Contract, What Happens?

• If you fail to make a payment or fail to comply with other terms of the Land Contract for 30 days, you may lose your rights to remain in the property.

• If, before those 30 days are up, you make all payments currently due under the contract, pay any fees and charges which you owe under the Land Contract, and

Begin complying with all other terms; you should not lose the property.

Include:

1. an indication that there is a Land Contract and the address of the property;

2. a reason(s) for ending the contract; and

3. a statement that the Buyer has ten days to correct the problem.

What Next?

• After the ten-day notice period, the Sellercan file court action if you have not

Corrected the default and complied with the contract. There are two (2)

Possibilities:

1. If the contract has been in effect for less than five years, or less than 20% of the principal

Amount due has been paid, and you have been in default for over 30 days, an eviction action

Against you can be filed just like a landlord evicting a tenant. If this happens, you could

Lose your down payment you must receive notice as explained above first.

2. If you have paid under the Land Contract for five years or more from the date of the first payment, or have paid toward the purchase price a total sum equal to or more than 20% of the contract price, the Seller may recover the property only by use of

FORECLOSURE and judicial sale of the property.

[14]What Is a Foreclosure?

If you have paid more than 20% of the contract price, or the Land Contract has

Been in force for five years and you have been paying, the Seller must FORECLOSE. This

Means that a legal action is filed and if you lose, the property is sold. If the property is

Sold for more than what is owed on your Land Contract, you will get what is left.

That is why it is important not to just walk away or move out if you get a notice.

[15]What If I Made Improvements or Repairs?

[16]What You Need to Know about Lead Paint

Lead poisoning is having too much lead in the body. Lead poisoning is a serious health problem that affects people’s minds and bodies. Children under age six and unborn

Children are at the greatest risk of harm from lead poisoning because their bodies and

Nervous systems are still developing. If the home you are considering buying on Land Contract was built before 1977 and you want to know if the house contains lead paint, you should contact your local Health Department to have the home tested. Ask the Seller if

There is lead paint. Look for chipping paint and dust. Lead can also be in the dirt around the house. Lead poisoning is serious.

°A written contract protects both the Buyer and the Seller. It helps the Buyer to make more informed decisions. And it helps both parties to know their rights.

[17]Read before you sign.

Oral Land Contracts can sometimes be valid, BUT SHOULD BE AVOIDED. You should contact an attorney or your local Legal Services immediately if you think that you have this type of Land Contract.

°When reviewing a written instrument, courts must look to what the parties thought they were getting—the intent should be gathered from the written language.

°If the contract is not clear, the contract is interpreted against the party who wrote the contract.

°Record your Land Contract to protect your rights.

[18]Conclusion of the Contract :

The contract may be concluded in any form, stipulated for making the deals, unless the law stipulates a definite form for the given kind of contracts. If the parties have agreed to conclude the contract in a definite form, it shall be regarded as concluded after the agreed form has been rendered to it, even if the law does not require such form for the given kind of contracts.
The contract in written form shall be concluded by compiling one document, signed by the parties, and also by way of exchanging the documents by mail, telegraph, teletype, telephone, by the electronic or any other type of the means of communication, which makes it possible to establish for certain that the document comes from the party by the contract.

BIBLIOGRAPHY:

Books:

Mark P. Thompson (Author)
Business Law: The Ethical, Global, and E-Commerce Environment [Book] by Jane Mallor, A. James Barnes, L. Thomas Bowers, Arlen Langvardt in Books
Modern Land Law [Paperback]
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Website:

1)www.lawyersnjurists.com

2) http://www.en.wikipedia.org/wiki/Contract

3)http://www.guernseybar.com/content.asp

4)http://www.legalmatch.com/law-library/article/land-contract-lawyers.html

5)http://americanlegalreview.com/land-contract/index.html

6)http://www.thestudentroom.co.uk

[1] Introduction

[2] Offer and acceptance:

[3] Summary of important issues for contract

[4] Written contracts:

[5] Verbal agreements