Q: How does a Vendor enforce a Land Contract when Vendee fails to pay real estate taxes?
Land contract states: "Real estate taxes shall be the responsibility of the Vendee as of the date of the execution of this agreement. Said taxes shall be escrowed and added to the principal and interest payment required hereunder." Vendee has not paid anything toward real estate taxes, although she is current in payments for principal and interest. Under the default section of the land contract, it states: "Failure of the Vendee to maintain current the status of all real estate taxes and insurance escrow payments and/or premiums as required herein shall permit Vendor the option to pay any such escrow amounts, premiums, taxes, interest and/or penalty(ies), and to add same to the next due installment payment or principal amount owing under this contract, or to exercise any remedies available to Vendor." If Vendee fails to pay real estate taxes, what are the remedies available to Vendor in Ohio?
A: Ohio has a very specific statute for Land Installment Contracts; R.C. Chapter 5313. If the land installment contract has been in effect for less than 5 years or the purchaser has paid less than 20% of the purchase price, you may proceed by giving a notice of forfeiture. This notice places the purchaser on notice of his breach and gives him a limited period of time to correct the breach. If the breach continues you may evict.
If the contract has been in existence for more than 5 years or the purchaser has paid more than 20%, then after the time period for forfeiture has expired you can proceed to file a foreclosure action.
Rather than proceed with the above, you may want to see if the purchaser will voluntarily move and execute a cancellation of land installment contract.
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