Contract for Deed (Land Contract)

CONTRACT FOR DEED (LAND CONTRACT)

(State of California)

TABLE OF CONTENTS

1. Parties
2. Recitals
3. Property and Legal Description
4. Purchase Price and Payment Terms
5. Interest, Amortization, and Balloon
6. Prepayment
7. Possession
8. Taxes, Insurance, and Maintenance
9. Title; Custody of the Deed; Conveyance at Payoff
10. Recording of Contract / Memorandum
11. Existing Encumbrances; Due-on-Sale / Wrap Warning
12. Risk of Loss; Casualty; Condemnation
13. Default and Remedies (California — Anti-Forfeiture)
14. Assignment
15. Disclosures
16. General Provisions
17. Signatures and Acknowledgment
18. Exhibits

1. PARTIES

THIS CONTRACT FOR DEED / REAL PROPERTY SALES CONTRACT (this "Contract") is made and entered into as of [__/__/____] (the "Effective Date") by and between:

• [SELLER LEGAL NAME], of [SELLER ADDRESS] (the "Seller" or "Vendor"); and
• [BUYER LEGAL NAME], of [BUYER ADDRESS] (the "Buyer" or "Vendee").

Seller and Buyer are each a "Party" and together the "Parties."

2. RECITALS

A. Seller owns legal title to the real property described in Section 3 (the "Property").

B. Buyer desires to purchase, and Seller to sell, the Property under a real property sales contract within the meaning of California Civil Code § 2985, whereby Seller retains legal title as security and Buyer takes possession and equitable ownership until the full Purchase Price is paid.

C. The Parties intend this Contract to operate as both a contract of sale and a security device under California law.

NOW, THEREFORE, in consideration of the mutual covenants below and other valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:

3. PROPERTY AND LEGAL DESCRIPTION

3.1 Property. Seller agrees to sell and Buyer agrees to buy the real property commonly known as [STREET ADDRESS, CITY, CALIFORNIA, ZIP], together with all improvements, fixtures, easements, and appurtenances, more particularly described as:

3.2 Personal Property Included. [________________________________] (if none, state "None").

3.3 Condition. Except as expressly stated herein and in required disclosures, the Property is sold "AS IS, WHERE IS, WITH ALL FAULTS," subject to the statutory disclosures in Section 15.

4. PURCHASE PRICE AND PAYMENT TERMS

4.1 Purchase Price. The total purchase price is $[____________] (the "Purchase Price").

4.2 Payment Schedule.

4.3 Application of Payments. Each payment applies first to accrued interest, then to principal, then to advances made by Seller (taxes, insurance, senior-loan payments, or to protect title), consistent with Civ. Code §§ 2985.3 and 2985.4.

4.4 Late Charge. A late charge of $[____] (or [____]% of the overdue installment) applies to any payment more than [____] days late, to the extent permitted by California law.

5. INTEREST, AMORTIZATION, AND BALLOON

5.1 Interest Rate. Interest accrues on the unpaid principal at [____]% per annum.

5.2 Amortization. The balance is amortized over [____] months/years.

5.3 Balloon Payment. ☐ No balloon payment. ☐ A balloon payment of approximately $[____________] is due on [__/__/____] (the "Maturity Date"). Buyer must refinance or pay this amount in full on the Maturity Date.

6. PREPAYMENT

Buyer may prepay all or any part of the unpaid principal at any time ☐ without penalty ☐ subject to a prepayment charge of [________________], consistent with Civ. Code § 2985.6 and any applicable consumer restrictions on prepayment penalties.

7. POSSESSION

Buyer is entitled to possession on [__/__/____] and retains possession so long as Buyer is not in default, subject to this Contract and the existing encumbrances disclosed in Exhibit B.

8. TAXES, INSURANCE, AND MAINTENANCE

8.1 Taxes and Assessments. Buyer shall pay, before delinquency, all real property taxes and assessments accruing on or after the possession date and provide proof on request.

8.2 Insurance. Buyer shall maintain hazard insurance for not less than full replacement value, naming Seller as additional insured / loss payee as its interest may appear, and deliver evidence of coverage.

8.3 Maintenance. Buyer shall keep the Property in good repair, commit no waste, and comply with all laws and recorded restrictions.

8.4 Seller Advances. Sums advanced by Seller to protect title (taxes, insurance, senior-loan payments) become additional principal at the contract rate and are immediately due.

9. TITLE; CUSTODY OF THE DEED; CONVEYANCE AT PAYOFF

9.1 Retention of Legal Title. Seller retains legal title as security until the Purchase Price and all other sums are paid in full. Buyer holds equitable ownership and the rights of an equitable owner.

9.2 Form of Deed. Upon payment in full, Seller shall convey marketable title by [Grant Deed], free of liens other than the Permitted Exceptions in Exhibit B and matters created or suffered by Buyer.

9.3 Deed in Escrow (Optional). ☐ The Parties deposit an executed, recordable Grant Deed with [ESCROW AGENT NAME/ADDRESS], released to Buyer upon payment in full and to Seller upon a completed default termination consistent with California law, per the escrow agreement (Exhibit C). ☐ No deed escrow; Seller delivers the deed at payoff.

9.4 Marketable Title / Title Insurance. ☐ Seller shall provide a CLTA owner's title insurance commitment within [____] days. ☐ Buyer waives a commitment but may obtain a policy at Buyer's expense.

10. RECORDING OF CONTRACT / MEMORANDUM

10.1 Recording. Within [____] days after the Effective Date, the Parties shall record ☐ this Contract ☐ a Memorandum of Real Property Sales Contract (Exhibit D) with the County Recorder of the county where the Property is located. The instrument must be acknowledged (Civ. Code § 1169; Gov. Code § 27279 et seq.) and comply with recorder formatting requirements.

10.2 Effect. Recording gives constructive notice of Buyer's equitable interest and protects Buyer against subsequent purchasers and creditors of Seller.

10.3 Costs. Recording fees and any documentary transfer tax are paid by [Buyer / Seller].

11. EXISTING ENCUMBRANCES; DUE-ON-SALE / WRAP WARNING

11.1 Existing Loans. The Property ☐ is ☐ is not subject to an existing deed of trust in favor of [LENDER] with an approximate balance of $[__________] (a "wrap" / all-inclusive arrangement).

11.2 Garn-St. Germain Warning. Buyer and Seller acknowledge that most deeds of trust contain a due-on-sale clause and that, under the Garn-St. Germain Depository Institutions Act (12 U.S.C. § 1701j-3), transfer by real property sales contract may permit the existing lender to accelerate the underlying loan. Seller remains responsible for keeping any senior loan current, and Buyer's payments do not relieve Seller of that obligation. Consult counsel and, where possible, the existing lender before closing.

12. RISK OF LOSS; CASUALTY; CONDEMNATION

12.1 Risk of Loss. From the possession date, risk of loss passes to Buyer, who shall maintain insurance under Section 8.2.

12.2 Casualty. Insurance proceeds shall be applied, at the Parties' written election, to restoration or to the unpaid balance.

12.3 Condemnation. A condemnation award shall be applied first to the unpaid balance, with the surplus (if any) to Buyer (see Alhambra Redevelopment Agency v. Transamerica Financial Services (1989) 212 Cal.App.3d 1370).

13. DEFAULT AND REMEDIES (CALIFORNIA — ANTI-FORFEITURE)

13.1 Events of Default. Buyer is in default if Buyer (a) fails to pay any installment or other sum when due and the failure continues beyond the cure period below; (b) fails to maintain insurance or pay taxes; (c) commits waste; or (d) breaches any other material covenant and fails to cure within [____] days after written notice.

13.2 Notice and Reasonable Opportunity to Cure. Before exercising any remedy, Seller shall give Buyer written notice of default specifying the breach and the amount required to cure, and Buyer shall have a reasonable opportunity (not less than [30] days, or such longer period a court of equity requires) to cure and reinstate this Contract.

13.3 California Anti-Forfeiture Doctrine. The Parties acknowledge and agree that, under California law:

a. Relief from forfeiture — Civ. Code § 3275. A Buyer who has breached but can make full compensation to Seller is entitled to relief from forfeiture upon paying the sums due plus damages.

b. Substantial-equity rule — Petersen v. Hartell (1985) 40 Cal.3d 102; MacFadden v. Walker (1971) 5 Cal.3d 809. A Buyer who has made substantial payments or otherwise acquired substantial equity has a continuing right to complete the purchase by paying the balance, and Seller may not declare a bare forfeiture that strips that equity. The Contract is treated like a mortgage, and Seller's practical remedy is foreclosure, not forfeiture.

c. Residential deposit/liquidated-damages limits — Civ. Code § 1675. For a dwelling of not more than four units that Buyer intended to occupy, any forfeiture of Buyer's deposit as liquidated damages is presumed valid only up to 3% of the Purchase Price and is otherwise subject to the reasonableness limits of §§ 1675–1678.

13.4 Seller's Remedies. Upon an uncured default, and subject to Section 13.3, Seller may:

a. sue for the unpaid installments or for the balance due (action on the debt);
b. pursue judicial foreclosure of the Contract as a security instrument under Code of Civil Procedure § 725a et seq., preserving Buyer's equity of redemption;
c. if the Parties have executed and recorded a deed of trust securing this Contract, proceed by nonjudicial trustee's sale under Civ. Code § 2924 et seq. (recorded notice of default, 3-month reinstatement period, recorded notice of sale, and public sale); or
d. seek any equitable remedy a court may grant, including quiet title following a completed foreclosure.

13.5 Application of Sale Proceeds. Proceeds of any foreclosure or resale apply first to costs and reasonable attorney's fees, then to accrued interest, then to principal and advances, with any surplus paid to Buyer or junior claimants as required by law.

13.6 Anti-Deficiency Awareness. California's anti-deficiency statutes (e.g., Code Civ. Proc. §§ 580b, 580d) may bar or limit a deficiency judgment on a purchase-money obligation; the Parties acknowledge these protections may apply to this Contract.

13.7 Cumulative Remedies; No Waiver. Remedies are cumulative to the extent consistent with California law and the anti-forfeiture doctrine. Acceptance of a late or partial payment does not waive the default.

14. ASSIGNMENT

14.1 Buyer may not assign this Contract or its equitable interest without Seller's prior written consent, not unreasonably withheld; any assignment must comply with Civ. Code § 2985.1. Any permitted assignee takes subject to this Contract.

14.2 Seller may assign its rights (including the right to receive payments), subject to Buyer's rights hereunder.

15. DISCLOSURES

15.1 Lead-Based Paint. If any residential dwelling on the Property was built before 1978, Seller has delivered the federal lead-based paint disclosure and the EPA pamphlet "Protect Your Family From Lead in Your Home" (42 U.S.C. § 4852d). ☐ Pre-1978 (disclosure attached) ☐ Built 1978 or later (not applicable).

15.2 Transfer Disclosure Statement (TDS). For a sale of one-to-four residential units, Seller shall deliver the statutory Real Estate Transfer Disclosure Statement (Civ. Code § 1102 et seq.), the Natural Hazard Disclosure Statement, and any other required statutory disclosures. ☐ Delivered ☐ Statutory exemption applies: [____________].

15.3 Other Disclosures. [Megan's Law notice, water-conserving fixtures (Civ. Code § 1101.4), Mello-Roos/special assessments, HOA, well/septic, and any other required disclosures: ________________________________].

16. GENERAL PROVISIONS

16.1 Governing Law. This Contract is governed by the laws of the State of California, including Civ. Code § 2985 et seq.

16.2 Time of the Essence. Time is of the essence, subject to the notice, cure, and anti-forfeiture rights in Section 13.

16.3 Notices. Notices must be in writing and delivered by personal delivery, certified U.S. mail (return receipt requested), or nationally recognized overnight courier to the addresses in Section 1.

16.4 Entire Agreement; Amendment. This Contract and its Exhibits are the entire agreement and may be amended only in a writing signed by both Parties.

16.5 Severability. If any provision is held invalid, the remainder remains in effect.

16.6 Attorney's Fees. The prevailing Party in any action arising under this Contract is entitled to reasonable attorney's fees and costs (Civ. Code § 1717).

16.7 Counterparts; Electronic Signatures. This Contract may be executed in counterparts and by electronic signature, each deemed an original.

16.8 Successors. This Contract binds and benefits the Parties and their heirs, successors, and permitted assigns.

17. SIGNATURES AND ACKNOWLEDGMENT

IN WITNESS WHEREOF, the Parties have executed this Contract as of the Effective Date.

SELLER:

Signature: [________________________________] Date: [__/__/____]
Printed Name: [________________________________]

BUYER:

Signature: [________________________________] Date: [__/__/____]
Printed Name: [________________________________]

Acknowledgment (for recording — Cal. Civ. Code § 1189)

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

State of California
County of [____________________]

On [__/__/____] before me, [NOTARY NAME, NOTARY PUBLIC], personally appeared [NAME(S)], who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature: [________________________________] (Seal)

18. EXHIBITS

• Exhibit A — Legal Description of the Property
• Exhibit B — Permitted Exceptions / Existing Encumbrances
• Exhibit C — Deed Escrow Agreement (if applicable)
• Exhibit D — Memorandum of Real Property Sales Contract (for recording)

Sources and References

• Cal. Civ. Code § 2985 — Real property sales contract (definition): https://law.justia.com/codes/california/code-civ/division-3/part-4/title-14/chapter-2c/section-2985/
• Cal. Civ. Code § 2985.1 — Assignment of real property sales contract: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=2985.1
• Cal. Civ. Code § 3275 — Relief from forfeiture: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=3275
• Cal. Civ. Code § 1675 — Liquidated damages / deposit forfeiture (residential): https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=1675
• Petersen v. Hartell (1985) 40 Cal.3d 102; MacFadden v. Walker (1971) 5 Cal.3d 809 — anti-forfeiture / substantial-equity doctrine
• Cal. Civ. Code § 2924 et seq. — Nonjudicial foreclosure / trustee's sale: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=2924
• Cal. Code Civ. Proc. § 725a et seq. — Judicial foreclosure: https://leginfo.legislature.ca.gov/
• Cal. Civ. Code § 1102 et seq. — Transfer Disclosure Statement: https://leginfo.legislature.ca.gov/
• Garn-St. Germain Act, 12 U.S.C. § 1701j-3: https://www.law.cornell.edu/uscode/text/12/1701j-3
• Lead-Based Paint disclosure, 42 U.S.C. § 4852d: https://www.law.cornell.edu/uscode/text/42/4852d