Also known as: installment land contracts · contract for deed · land contract
Written by attorneys · grounded in primary & secondary sources — see below
A security device by which a seller retains legal title to real property until the buyer completes installment payments of the purchase price. The buyer receives equitable title and possession upon signing. Upon default the seller may pursue forfeiture or foreclosure remedies depending on state law.
India Inoue orally agreed to sell a parcel to Ibrahim Iqbal under an installment land contract calling for monthly payments over eight years. Iqbal took possession and made payments for two years. When Inoue refused to continue, Iqbal sued for specific performance. The court held the agreement unenforceable because it was a contract for the sale of an interest in land without a signed writing.
Idina Iverson sold land to Isabelle Inman under an unrecorded installment land contract. Inman paid forty percent of the price and took possession. A prior unrecorded claimant then appeared. The court awarded title to Inman but granted the prior claimant a lien on the property to secure the unpaid balance.
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Imani Idowu purchased a farm from Infinity Bank under an installment land contract. After three years of payments Idowu defaulted. Infinity Bank sought to terminate the contract and retain all payments under a forfeiture clause. The court permitted the seller to regain possession while noting that some jurisdictions require foreclosure proceedings instead.
Igor Ito contracted to buy commercial property from Iris Energy under an installment land contract and paid thirty percent before a prior unrecorded interest surfaced. The court awarded title to the prior claimant but ordered an equitable lien in favor of Ito for the sums already paid to protect his partial performance.
Yes. An installment land contract is a contract for the sale of an interest in land and therefore falls within the land-contract provision of the statute of frauds. A signed writing is required unless an exception such as part performance applies.
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The seller may invoke a forfeiture clause to terminate the contract and retain payments already made, or the jurisdiction may require foreclosure proceedings that protect the buyer's equity. State law determines which remedy applies.
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Courts may award title to the prior claimant while granting the installment purchaser an equitable lien for the amount paid. This approach balances the prior interest against the purchaser's partial performance and good-faith reliance.
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Yes. The buyer receives equitable title and the right to possession immediately upon signing, while the seller retains legal title as security for the unpaid balance.
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…contend the preponderance of Kentucky cases permits enforcement of forfeiture clauses in land sale contracts. However, installment land contracts were not involved in two of the cases cited in respondents’ brief. In Ward Real Estate v. Childers , 223 Ky. 302, 3 S.W.2d 601 (1928), and Graves v. Winer , Ky., 351 S.W.2d 193 (1961),…