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Under a Land Contract for Deed Who Retains Fee Ownership of the Property

Under a Land Contract for Deed: Who Retains Fee Ownership of the Property?

A land contract for deed is a type of real estate transaction where the seller(financier) provides financing for the buyer to purchase the property. Under this agreement, the buyer agrees to make regular payments to the seller until the agreed-upon price is paid in full. Once the payment is completed, the buyer officially takes ownership of the property.

One of the key questions that arise during a land contract for deed transaction is who retains fee ownership of the property. Fee ownership is the ultimate and complete ownership of the property which grants the owner the freedom to transfer, lease, sell or mortgage it.

In a typical land contract for deed agreement, the seller retains fee ownership of the property until the agreed-upon purchase price is paid entirely by the buyer. This means that until the buyer fulfills the total payment, the seller maintains ownership rights to the property. In essence, the buyer is buying the property on credit, and the seller is financing the purchase.

During the duration of the land contract for deed, the buyer will be paying the seller in installments or as agreed in the contract. Once the payment is complete, the seller transfers fee ownership to the buyer through a deed of trust or a warranty deed. The seller may also provide a clear title to the property to the buyer.

It is essential to note that the buyer may still possess certain rights during the contract term. For instance, the buyer may be allowed to occupy the property, make improvements, or even sell the property to a third party. However, these rights may be subject to the terms of the contract and may require the seller`s approval.

In summary, under a land contract for deed, the seller retains fee ownership of the property until the buyer pays the agreed-upon purchase price in full. Once the payment is made, the seller transfers ownership rights to the buyer. Therefore, it is crucial to understand the terms of the contract before entering into a land contract for deed agreement. As always, it is recommended to consult with a real estate attorney before entering a land contract for deed transaction.

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