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Am I required by Michigan law to record a land contract?
Anonymous4 views2 answers
We have someone who is interested in purchasing a 4 acre parcel of raw land that we own. Being that it is so difficult to get financing on raw land currently we'd like to be able to sell land contract. We do currently have a mortgage and are worried that if we record the land contract the remainder of the loan could be Due on Sale. We're wondering if we're required to record the land contract. We know that we're still responsible to paying the loan and taxes, even if the purchaser defaults.
If we don't record the land contract is there any other way our lender could find out about the sale?
Thank you.
Yes, all land contracts can only be completed if you own title to the land. Since you currently have a mortgage, you do not own the land free and clear to be able to sell it. And, the only way you can legally sell the land is to attest to the buyer that you have clear title. That is all determined when you record the sale, which is the final step any reputable buyer would demand of the sale.
I hope this helps.
I agree with the above answer. The land contract needs to be recorded. If you are worried about the mortgage being due on recording, you should review your mortgage and talk with your mortgage company to determine what your options are. I suspect that the mortgage company would be willing to work with you if you are honest with them.
Disclaimer: This answer does not constitute legal advice and is for informational purposes only. www.dinehartlawoffice.weebly.com
