Q: We have a contract to buy a home on contract. We have paid it off but the owner refuses to sign over deed. Next step?
We have overpaid the contractual asking price. The seller has taken out an extra mortgage on house. Is threatening to kick us out, If we don't keep paying her. How do we proceed with this and what rights do we have? Contract is signed buy us and the seller and is notarized.
A: You should consult an attorney for advice on exactly how you want to proceed, but I can give you some general information about this type of case and some of the options you may have. Let's take it a step at a time.
First, to kick you out the seller will need a court order. To do get a order, the seller will have to show the court that the seller has the right to possess the property (i.e., that you've defaulted on the land contract), and the seller won't be able to meet that burden if you've met all the contract obligations. If the seller does go to court to get an order, you will get notice so you can appear in court to defend your rights.
Second, even if the seller could show that you've defaulted under the land contract, the law provides some protection for people who breach a land contract after they've paid a substantial amount on it. At one time, if you breached a land contract before the entire amount was paid off, you could lose the property and everything you've put into it. Now, situations like the one you describe are treated more like a mortgage foreclosure; the seller can sell the property to someone else and apply the proceeds toward the amount you owe, with you having the right to receive proceeds in excess of the amount you owe. In other words, under the old system a land contract purchaser had no equity in the property until it was paid in full; that's different now.
Third, if the seller takes you to court, it will give you the opportunity to file a counterclaim asking the court to perfect the transfer title to the property to you on the grounds that you've paid the full purchase price.
Fourth, you could preemptively file a lawsuit against the seller asking the court to perfect the transfer of title to you.
Again, this is just a general outline of the issues in this sort of case, and you should contact an attorney who practices real estate law to get advice on your particular situation.
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