The next couple of blog entries will address an issue several clients have encountered recently: confusion about enforcing “Contracts for Deed,” “Lease Purchases,” and other types of sale agreements.
Generally, residential Real Property owners in Oklahoma have two primary choices for property they do not want to use themselves: rent/lease it or sell it.
If it is a rental situation, the lease should be clear: the Tenant is paying rent just to occupy and use the premises for a set time. The Tenant has no future expectations of ownership. During the rental process, if the Tenant does not pay or otherwise defaults on the lease, the Owner/Landlord will have to bring a Forcible Entry and Detainer action in District Court to remove the Tenant and/or recover rent and damages.
If it is a sale, the purchase agreement should be clear about actual ownership transferring from Seller to Buyer, and at closing there should be a deed from Seller to Buyer.
If the Seller also finances the transaction, they should understand that they are in reality becoming a “bank” and should document accordingly. There should be a deed from Seller to Buyer, along with a mortgage from Buyer back to Seller, to secure the promissory note made from Buyer to Seller to pay a certain amount of money over time with interest. During the term of the promissory note, if the Buyer does not make payments or otherwise defaults on the promissory note or mortgage, Seller will have to bring a Foreclosure action in District Court against the Buyer.
And that is the basic root of the problem: Sellers generally do not like the time, expense, and hassle of foreclosure, especially compared to the relative ease of a Forcible Entry and Detainer – or better yet no legal action at all. Over time, “creative” Sellers have drafted Contracts for Deed, Lease Purchases, and other arrangements which are basically purchase agreements but which state that if a Buyer misses a payment or otherwise defaults, the property goes back to Seller automatically – or at least with something less than foreclosure. These arrangements have a number of problems, which will be discussed in more detail in the next entry.
If our office may be of assistance to you in these areas, do not hesitate to contact us at (580) 338-6503 or at firstname.lastname@example.org
or using any of our contact information in the profile.
You can also visit www.fieldandhicks.com
for more information.
This blog contains general information and the opinions of the author – not legal advice; you should seek the advice of competent counsel (attorney/lawyer) when considering any legal issues.