Also known as: installment land contract · installment land contracting · contract for deed · land contract
Written by attorneys · grounded in primary & secondary sources — see below
A security device for the sale of real property in which the seller retains legal title until the buyer completes payment of the purchase price in installments. The buyer receives equitable title and possession upon execution. Upon default the seller may pursue forfeiture or foreclosure remedies depending on state law.
Isla Ireland orally agreed with Integrity Partners to purchase a warehouse lot through an installment land contract calling for monthly payments over five years. After making three payments Isla sought specific performance when Integrity refused to convey. The court dismissed the claim because the agreement fell within the land contract provision of the statute of frauds and lacked a signed writing.
Iris Irons entered an installment land contract with Imperial Motors for a factory site and paid half the price before taking possession. An earlier unrecorded deed holder then appeared and asserted superior title. The court awarded the land to Iris but imposed a lien on the property in favor of the prior claimant to secure the remaining balance owed under the contract.
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Ira Irving signed an installment land contract to buy a retail building from Island Manufacturing. The contract required twenty quarterly payments before a deed would issue. After ten payments Ira defaulted. Island Manufacturing exercised its retained legal title by initiating forfeiture proceedings under state law rather than mortgage foreclosure.
Ines Ibarra purchased a vacant lot under an installment land contract and paid one-third of the price before discovering a prior unrecorded deed. The earlier claimant sued to quiet title. The court granted title to the prior claimant but awarded Ines an equitable lien on the property measured by the amount she had already paid.
Yes. An installment land contract is a contract for the sale of an interest in land and therefore falls within the land contract provision of the statute of frauds. Enforcement requires a signed writing unless an exception such as part performance applies.
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Upon default the seller may pursue forfeiture in some jurisdictions or foreclosure proceedings that treat the contract like a mortgage. State law determines which remedies apply and whether mortgage-like protections limit forfeiture.
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Courts may award the land to the installment purchaser while granting the prior claimant a lien for the unpaid balance. Alternatively the court may award the land to the prior claimant while granting the purchaser a lien for payments already made.
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No. Some states treat them as alternative security devices subject to forfeiture clauses while others impose mortgage-like foreclosure protections. The Restatement (Third) of Property treats a contract for deed as creating a mortgage.
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…contend the preponderance of Kentucky cases permits enforcement of forfeiture clauses in land sale contracts. However, installment land contracts were not involved in two of the cases cited in respondents’ brief. In Ward Real Estate v. Childers , 223 Ky. 302, 3 S.W.2d 601 (1928), and Graves v. Winer , Ky., 351 S.W.2d 193 (1961),…