I am behind on a land contract. contract holder just texted me and said they sold the property to another for cash. is that legal?
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I am behind on a land contract. contract holder just texted me and said they sold the property to another for cash. is that legal?
the contract is signed and notorized by a real estate agent acting as a
transaction coordinator. The seller has not filed forfeiture or foreclosure
papers. just announce the property was sold.
Asked on April 27, 2018 under Real Estate Law, Michigan
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
If title had not yet transferred to you, there was no need to foreclose: foreclosure is how a lender regains title from someone who purchased property but has defaulted on a mortgage. If title has not yet transferred--that is, if the contract is one that *will* let you buy the land in the future if you comply with the contract--then if you are "behind" on the contract, you have failed to make payments when due. That failure to pay when required would be a material, or important, breach or violation of contract; and a material breach of contract allows the other party (in this case, the seller) to treat the contract as terminated. If the contract with you has been terminated by your breach, then the seller if free from the contract and could sell to another person. So if you have fallen behind on the contract but do not yet have title, they could do this and sell to another.
If you already had title, however, then they would have had to foreclosure on you: they cannot sell property owned by (i.e. titled to) you without first regaining the property through foreclosure.
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