Midland, MI asked in Civil Litigation, Contracts and Real Estate Law for Michigan

Q: If you sold a property on a land contract and now the person was buying it is trying to sell it.

The buyer is 4 months behind on payments and two years behind on taxes which is in the contract. The buyer has been always late on every payment since the land contract was signed. The owner has sent the proper letter to start eviction process. Another two weeks he could file court papers for eviction. The owner is trying to go by the book. Owner has given him every opportunity to catch things up or to talk to him, but the buyer thinks he still sell the property without permission and a title. Thinking he could pay what he owes and keeps the rest of the money that he gets out of the sale for himself. Is these legal and can he do it without the owner's permission or title.

2 Lawyer Answers
James L. Arrasmith
James L. Arrasmith pro label Lawyers, want to be a Justia Connect Pro too? Learn more ›

A: In a land contract, the seller retains legal title to the property until the buyer fulfills all the terms of the contract, including making all payments and paying property taxes. The buyer cannot legally sell the property without the owner's permission and the legal title.

Given the situation you described, here are a few key points:

1. The buyer is in default of the land contract by being behind on payments and property taxes.

2. The owner has initiated the eviction process according to the proper legal procedures.

3. The buyer does not have the legal right to sell the property without the owner's permission and the legal title.

4. If the buyer attempts to sell the property, they would be violating the terms of the land contract and engaging in an illegal act.

5. The buyer is not entitled to any proceeds from the sale of the property, as they do not have legal ownership.

The owner should continue following the proper legal procedures for eviction and consult with a local real estate attorney to ensure their rights are protected. The attorney can also advise on the best course of action if the buyer attempts to sell the property illegally.

In summary, the buyer cannot legally sell the property without the owner's permission and the title, and any attempt to do so would be a violation of the land contract and the law.

Kenneth V Zichi
Kenneth V Zichi
  • Fowlerville, MI
  • Licensed in Michigan

A: In MICHIGAN the buyer on a land contract has what is called 'Equitable Title'.

While that entails certain limitations, that means they *can* LEGALLY sell their interest, and ... here's the kicker ... if they can do so before you complete the forfeiture or foreclosure on the land contract (including whatever redemption period there may be) then they can sell THEIR interest. Assuming they sell for MORE than what they owe you and what is owed in back taxes, they DO indeed get to 'keep' the extra, as they will pay off what they owe on the land contract before the 'eviction' (that's the wrong term, but it is what you used so...) which is all you are entitled to as the legal title holder, and you then have the OBLIGATION to turn the legal title over to them which they in turn will be obligated to transfer to their buyer.

The time line you present may not work but IF they can pull it off, they can indeed sell their interest and collect *a portion* of the money of that sale.

You absolutely NEED to have local legal help look things over and determine what your situation is. This varies from state to state! And your time line is 'tight' here. Seek that local legal representation asap.

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.