Winter Garden, FL asked in Real Estate Law for Florida

Q: Looking to purchase a condo in FL with seller financing. He wants to do a land contract. Who’s name will the title be in

How does this get filed with the state? I want to make sure I’m protected. The interior needs work and I don’t want to put the effort and money in if this isn’t legitimate. We have agreed on terms, what do I need to do to make sure I’m covered?

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2 Lawyer Answers
James Clifton
James Clifton
  • Fayetteville, GA
  • Licensed in Florida

A: It is generally unadvisable to purchase property any other way than with a traditional deed and mortgage. Many times people who don't fully understand the implications of financing the sale of their own property think that there are forms like a land contract that somehow protect them more than a traditional mortgage. They don't. In fact, those documents are more likely to be filled out incorrectly and unnecessarily complicate things or worse jeopardize the transaction. The seller may think they automatically get the property back in a land contract without going through the foreclosure process in the event of a buyer default. That is incorrect. If there are special terms, like a balloon payment, those can be written into a mortgage. The worst-case scenario for a buyer in a land sale contract is that the seller illegally takes back the property without foreclosing on the property. This would force the buyer to initiate litigation to recover the property until the seller legally forecloses.

To get very technical, in a land contract or contract for deed, the buyer owns equitable title subject to getting the full legal title at the time of the final payment under the contract. There is a very common misconception that the seller never transfers title to the buyer, and therefore, the transaction does not require a foreclosure in the event of default. This is incorrect. The seller transfers equitable title at the time of entering the land contract even though there is no deed naming the purchaser as the new owner.

Barbara Billiot Stage agrees with this answer

A: You should not buy or sell property without having an attorney. Too many things could go wrong. A little money spent now usually saves a lot of money later.

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