Property II

Installment Land Contract

An installment land is when a buyer agrees to pay the purchase price in installments over a period of years. The buyer typically receives possession of the property during the contract period, but the seller retains title to the land during this time and transfers it at the end thereof.

Installment land contracts usually contain a clause stating the seller has the right to terminate the contract in the event of a default, regaining possession without legal process and retaining all previous payments.

Installment land contracts are often used as an alternative to a mortgage, but some states treat land installment contracts as mortgages.

Some states have provided recourse for the naturally harsh consequences of installment land contracts, such as allowing the buyer to redeem the property or to challenge the forfeiture provision.