Drafting a Land Contract Without an Attorney? Think Again.
In this current climate, it is easy to believe that some things that are traditionally done by attorneys can be done with just a bit of research – real estate is not one of those things.
No matter how many articles you read or videos you watch, DIY-ing real estate is risky, oftentimes leaving buyers and sellers searching for answers after the fact. This article will focus on two of the risks that run with DIY-ing real estate: Land installment contracts and quiet title actions.
Land Installment Contract
Land installment contracts are common in Ohio as a tool to provide an alternative path to property ownership, particularly beneficial in situations where conventional financing is not feasible or desirable. A land installment contract is defined as the following:
“An executory agreement which by its terms is not required to be fully performed by one or more of the parties to the agreement within one year of the date of the agreement and under which the vendor agrees to convey title in real property located in this state to the vendee and the vendee agrees to pay the purchase price in installment payments, while the vendor retains title to the property as security for the vendee’s obligation. Option contracts for the purchase of real property are not land installment contracts.”
For a simple breakdown, a Land Contract is a way to buy real estate through payments over time, with the seller keeping the title as security until fully paid. It can last more than a year and is different from paying for the option to buy later, which isn't included in this arrangement.
Land contracts are one of the most complex documents to draft, due to their highly specific statutory requirements. Some of those requirements involve having the following:
a contract with the full names and then current mailing addresses of all the parties, a statement of any encumbrances against the property conveyed,
a statement requiring the vendor to deliver a general warranty deed on completion of the contract, or another deed that is available when the vendor is legally unable to deliver a general warranty deed,
and many provisions that require either the vendor or the vendee to conform to specific requirements that are often unknown to a lay person. See Ohio Rev. Code § 5313.02.
With the complexity of a land installment contract, it is an easier thing to mess up than it is to get right. That is why it is important to seek the representation of attorneys who have experience in this practice. DIY-ing a land installment contract is not worth the prospect of ending up with nothing—an outcome we see far too often due to drafting errors and a failure to document payments.
Our firm routinely receives calls from prospective clients inquiring about our services related to land contract issues. If you decide to DIY a land-installment contract, it is likely that you may end up in costly and protracted litigation. The remedy for land installment contract issues is generally a quiet title action in the common pleas court of the county where the property is located.
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Quiet Title Action
A quiet title action, unlike a land installment contract, is a remedy for people who think that they own a property. Specifically, a quiet title action is:
“An action that may be brought by a person in possession of real property, by himself or tenant, against any person who claims an interest therein adverse to him, for the purpose of determining such adverse interest. Such action may be brought also by a person out of possession, having, or claiming to have, an interest in remainder or reversion in real property, against any person who claims to have an interest therein, adverse to him, for the purpose of determining the interests of the parties therein.”
Simply put, a quiet title action is a legal process used to settle disputes over property ownership. The goal is to clear up any confusion or claims against the property, basically making the owner's title "quiet" or free from disputes.
This type of remedy is a complex legal concept that is best achieved by the representation of an attorney. Quiet title action requires judicial intervention that focuses on bringing the disputed land to the court to establish proper ownership of the property in question. The outcome being sought by a quiet title action is for the clerk of the court to be able to record in the deed records a certified copy of the judgment or decree determining the interests of the parties. Ohio Rev. Code Ann. § 5303.01.
Essentially, the final judgment is meant to be the final deed on the property in question, in order to establish proper ownership. This complex remedy is a specialty of our firm, as we are able to skillfully navigate this complex legal remedy.
Conclusion
It is important to avoid the costly mistakes that may come with real estate dealings. It can be tempting to try the DIY approach to your legal matters. However, we constantly see the consequences of this decision and they are VERY EXPENSIVE. That is why it is important to be prepared and hire a qualified attorney to guide you through the process. If you need guidance in Ohio, you can book a FREE consultation with the Nalls Davis Real Estate Law practice here.
Disclaimer
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