Also known as: bonds for deed · contract for deed · land contract
Written by attorneys · grounded in primary & secondary sources — see below
A contract for the sale of real property under which the purchaser acquires immediate possession and equitable title while the vendor retains legal title until the purchase price is paid in full through installments. The arrangement functions as a security device that secures the unpaid balance. Upon default the vendor may pursue forfeiture or foreclosure remedies depending on state law.
Blake Butler orally promised to sell a warehouse lot to Boreal Energy for a cash price plus a later milestone payment. Boreal paid the initial price and received a deed, but the parties never reduced the milestone term to writing. When Boreal later refused the milestone, the court enforced the payment obligation because the land transfer had already occurred and only a monetary promise remained.
Brian Bailey entered an installment contract with Bristol Steel for a commercial parcel and paid forty percent before a prior unrecorded claimant appeared. The court awarded Bailey the land subject to a lien in favor of the prior claimant securing the remaining contract balance, thereby protecting Bailey's equitable interest while preserving the senior claim.
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Brenda Booth contracted with Blackwood Technologies to buy a loft under an installment land contract that required ten years of monthly payments. After three years and substantial equity, Blackwood declared a default and sought immediate forfeiture. The court treated the contract as a security device and required foreclosure proceedings to protect Booth's accumulated equity.
Bharat Bhatia paid thirty percent under an installment contract with Barclay Financial before discovering a prior unrecorded interest. The court awarded the land to the prior claimant but granted Bhatia an equitable lien on the property measured by the amount already paid, limiting relief to the extent of his performance.
Yes. The statute of frauds requires a signed writing for any contract for the sale of an interest in land. An oral bond for deed is unenforceable absent an applicable exception such as part performance.
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The seller may pursue forfeiture of the buyer's interest and retention of prior payments in some jurisdictions. In others the contract is treated like a mortgage and the seller must foreclose to cut off the buyer's equity.
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Courts may award the land to the installment purchaser while granting the prior claimant a lien for the unpaid balance, or award the land to the prior claimant while granting the purchaser a lien for amounts already paid. The choice balances the purchaser's equitable interest against the senior claim.
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Yes. The buyer obtains equitable title and the right to possession immediately upon signing. Legal title remains with the seller until the final installment is paid.
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