A number of homeowners exist in a kind of legal limbo between being renters and having a mortgage. They are not renting under a lease agreement, but they have not bought the property and obtained a mortgage. As well, they do not own the home they are living in outright. Instead, they have an agreement with the actual owner of the property under a land installment sales contract. These contracts, also known as installment land contracts, land sale contracts, long-term land contracts, bonds for deed, or contracts for deed, are simply alternatives to a mortgage or deed of trust. The buyers take possession of the property and make monthly installment payments to the seller. These monthly payments consist of principal and interest, and at the end of the contract, the buyers will own the property outright.
While it sounds quite a bit like a standard mortgage, there are some important differences between a mortgage and a land installment contract. First, the seller is also the financier of the purchase, and the seller retains title to the property for as long as the contract is in place. It is only after the buyers have paid on the contract for the required period of time that they are granted full ownership rights The buyers, though, have more responsibility than with a rental agreement, and also more ownership rights. In the typical contract for deed, the buyer is viewed as the equitable owner of the property, is given full possession, and is required to maintain the house. The buyers, then, have rights to do anything to the property they want, as long as it does not interfere with the security interest of the seller. Land installment contracts also usually allow sellers to avoid the standard foreclosure process if there is a default. Because the buyers do not have title to the home, the sellers may be able to use a process called forfeiture. This allows the seller to forfeit the contract, take back possession of the home, and retain all of the principal and interest payments made to date as rent or damages.
For More Information Visit: http://www.floridalawattorney.com