Can owner file forclosure on land contract if all payments were made?

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My husband and I have paid all monthly payments to the owner (a large residential and commercial contractor in Michigan) of our new condo (located in Michigan) which we moved into a year and a half ago on a Land Contract. We were planning to purchase the home by October 2009 (which is an agreement written in the Land Contract) but are unable to get a bank loan at this time. All payments have been made on time and in full, but the owner has been calling us asking when we will have the Mortgage ready. We would like to extend the Land Contract, but he may not let us and may foreclose on the property. Is the company legally allowed to foreclose if we have made all due payments and have kept the property in tip top condition? We are very worried about this because a foreclosure would disable us from buying a home in the next couple of years.
Please respond to the best of your ability. We could really use the help.



  1. Reply
    January 25, 2011 at 7:01 am

    It sounds like you have breached the terms of the land contract. While you may have made all the payments, but if you aren’t able to completed the purchase by getting a mortgage, then the title holder has the right to foreclose. That said, it’s not yet October 2009, so while you may have been denied a loan, you haven’t breached the terms of the land contract until October. I don’t see how he can foreclose at this time. I would tell the owner you are still searching for a mortgage and according to the land contract you have until October 2009.


  2. Reply
    January 25, 2011 at 7:40 am

    READ your contract.
    Get legal advice.
    This is one possible disadvantage of a contract for deed.
    Sounds like you are in BREACH because you’re not getting mortgage and not paying them off as YOU AGREED to do. Yes you paid your regular payments, and kept house in good condition, but you are NOT fulfilling the terms of the agreement. You are not doing what you promised to do and were legally bound.

  3. Reply
    January 25, 2011 at 8:38 am

    This is not a foreclosure if you have never purchased the property. You have an agreement to purchase but have not done so yet. The company has every right not to sell you to if you cannot get the mortgage. Not following through with a sale is NOT a foreclosure!

  4. Reply
    January 25, 2011 at 8:46 am

    He can’t do anything right now, but come October he can in fact reclaim possession of the property. The deal is done, you have failed to perform. This is exactly how most of these deals happen, you need to get yourself a loan that will close by the end of October.

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