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Land Contract Review Checklist

Consideration and Parties

Seller and buyer names

Address of the premises

Nature of consideration

Amount for entire contract

Amount of any down payment or earnest money

When it was or is to be paid

Surety for installments (if any)

Period (weekly, monthly, quarterly) of installments

Installment dollar amount

Due date of installments

Proration of installments

Acceleration of contract amount if buyer defaults

Balloon payment

Method of installment payment (check, money order, certified funds, single payment for multibuyer units)

When installment is deemed paid

Description

Type of premises

Legal description (metes and bounds)

Seller’s Duty to Convey

Will deed be escrowed by the title company or otherwise held until all payments are made?

What ensures that seller or seller’s successors or heirs turn over title once payments are all made?

Which party is to pay for deed drafting, filing, and any title work necessitated by the completion of the land contract?

Property Taxes and Assessments

Which party is to pay, and how is payment proven?

The effect of nonpayment

Prepayment Penalty

Avoid imposing a prepayment penalty

Seller’s Evidence of Title

How does buyer know that seller has good title?

Acceptance of Title

Buyer’s inspection of the premises and acceptance of its condition as is or contingent on seller repairs

Restrictions on the Ability to Mortgage

If desired, bar or restrict seller’s and buyer’s right to mortgage or collateralize the property

Prior Land Contracts

Are there any previous land contracts?

Are there previous defaulting land contract buyers?

Responsibility to Pay Transfer Tax When Contract Is Complete

Which party is to pay

How this payment is evidenced to the other party

The effect of nonpayment

Limitations on Assignment

If desired, bar both or either party’s right to assign the land contract

Land Division Act Rights (Unplatted or Noncondominium Property Only)

Are lot splits retained or transferred?

Possession

Date of turnover

Preconditions to receiving possession (payments, proof of insurance, completion of various forms)

Consequences of seller not providing possession

Determining readiness for possession

Condition of the Premises

Contingencies related to condition

How premises are being accepted (as is or specified condition)

Conditions to be met later

Notices and Place of Payment

Method of notice (written)

Address for notifying and paying seller

Address for notifying buyer

Definition of delivery

Default or Forfeiture

Definition

Time of the essence

Venue to litigate or for alternative dispute resolution

Express notice of default and right to cure

Remedies

Right to declare forfeiture and remove under Summary Proceedings Act

Right to foreclose by advertisement

Right to foreclose by judicial action

Continuing installment obligation?

Utilities

Utilities provided by seller

Utilities provided by buyer

Method of billing buyer if other than from utility company

What is the effect of nonpayment?

Late Fees and Dishonored Check Fees

Date installment is deemed late

Date late fee is imposed

Amount of late fee

Waste and Maintenance

Buyer’s duty not to commit waste

Buyer’s duty to maintain premises in good condition

Insurance and Damage to Property

Requirement for homeowners insurance

Requirement for liability insurance

How payment is assured

Waiving damage beyond insurance coverage

What is effect of nonpayment?

Waiver of Enforcement

One waiver does not constitute a continuing waiver

Successors in Interest Bound

Seller’s heirs and others responsibility to turn over title once payment is complete

Entire Agreement

Merge all prior agreements, written or oral, any exhibits or riders to the land contract, and the memorandum of land contract into the land contract

Miscellaneous Provisions

Seller’s or buyer’s right to cancel before possession and conditions

Cancellation fee

Who will draft and record the memorandum or affidavit of land contract?

Allocation of pest extermination obligations

Acknowledgment of zoning or other ordinances or statutes regulating the use of the property

Rules and regulations

Condominium restrictions

Condominium maintenance fees

How is payment of maintenance fee evidenced?

Federally, State-, and Locally Mandated Disclosures

Seller Disclosure

Lead-based paint

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