Contract for Deed (Land Contract) - Kentucky

CONTRACT FOR DEED (INSTALLMENT LAND SALE CONTRACT)

(Commonwealth of Kentucky)

1. PARTIES

This Contract for Deed (this "Contract") is made as of [__/__/____] by and between:

Seller: [SELLER LEGAL NAME], of [SELLER ADDRESS] ("Seller"); and

Buyer: [BUYER LEGAL NAME], of [BUYER ADDRESS] ("Buyer").

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

2. LEGAL DESCRIPTION AND PROPERTY

Seller agrees to sell, and Buyer agrees to buy, on the terms in this Contract, the following real estate located in [COUNTY] County, Kentucky (the "Property"):

Street address: [________________________________]

Legal description:

[INSERT COMPLETE METES-AND-BOUNDS OR LOT-BLOCK-PLAT LEGAL DESCRIPTION — attach as Exhibit A if lengthy]

Source of title: This Property was conveyed to Seller by [deed dated __/__/____, recorded in Deed Book ____, Page ____, office of the [COUNTY] County Clerk].

Parcel / Tax ID No.: [____________]

together with all improvements, fixtures, easements, and appurtenances, and the following personal property included in the sale (if any): [________________________________].

3. PURCHASE PRICE, DOWN PAYMENT, AND INSTALLMENT TERMS

Interest accrues on the unpaid principal balance from [__/__/____]. Each payment shall be applied first to accrued interest, then to principal, unless otherwise required by law.

☐ Prepayment permitted in whole or in part at any time without penalty.
☐ Prepayment subject to the following terms: [________________________________].

4. TITLE; DEED HELD PENDING PAYOFF; ESCROW

4.1 Retention of legal title as security. Seller retains bare legal title to the Property solely as security for payment of the purchase price. Under Sebastian v. Floyd, equitable title passes to Buyer upon execution of this Contract, and Seller's retained interest is treated as a lien analogous to a purchase-money mortgage.

4.2 Deed delivered at payoff. Upon full payment and performance, Seller shall convey marketable title to Buyer by [☐ Warranty Deed ☐ Special Warranty Deed], free of liens except those of record at signing and those created or permitted by Buyer.

4.3 Escrow of executed deed (optional). ☐ Seller shall, at signing, execute and deposit a [Warranty Deed] into escrow with [ESCROW AGENT NAME], to be delivered to Buyer upon full payment.

4.4 Title evidence. Seller shall furnish, at [☐ Seller's ☐ Buyer's] expense, a commitment for an owner's title insurance policy showing marketable title in Seller, subject only to the permitted exceptions.

5. RECORDING

This Contract (or a memorandum of it) may be recorded in the office of the County Clerk of [COUNTY] County, Kentucky, pursuant to KRS § 382.110. Recording protects Buyer's interest against subsequent purchasers without notice and creditors. The instrument must comply with KRS § 382.110, including the source-of-title statement. Recording fees are paid by [________________].

6. POSSESSION

Buyer is entitled to possession of the Property on [__/__/____]. Buyer shall keep the Property in good repair and shall not commit waste.

7. TAXES, INSURANCE, AND MAINTENANCE

7.1 Taxes and assessments. Beginning [__/__/____], Buyer shall pay before delinquency all real estate taxes and assessments. [☐ Buyer shall escrow 1/12 of estimated annual taxes monthly with Seller/escrow.]

7.2 Insurance. Buyer shall keep the improvements insured against fire and extended-coverage hazards for not less than $[____________], naming Seller as additional insured / loss payee as Seller's interest may appear.

7.3 Maintenance and utilities. Buyer shall maintain the Property, comply with all laws, and pay all utilities and charges.

8. DEFAULT AND REMEDIES

8.1 Events of Default

Buyer is in default if Buyer (a) fails to pay any installment or other sum when due; (b) fails to pay taxes or maintain insurance; (c) commits waste; or (d) breaches any other material term and fails to cure within [____] days after written notice.

8.2 No Forfeiture — Judicial Sale Required (Sebastian v. Floyd)

The Parties acknowledge that, under Kentucky law, any clause purporting to forfeit Buyer's payments or interest upon default is UNENFORCEABLE. Sebastian v. Floyd, 585 S.W.2d 381 (Ky. 1979). Seller's interest is a lien. Upon Buyer's uncured default, Seller's remedy is to accelerate the unpaid balance and obtain a judicial sale (foreclosure) of the Property through the Kentucky courts (KRS ch. 426, including KRS §§ 426.005 and 426.525). From the proceeds of the judicial sale, Seller recovers the unpaid balance plus interest and the expenses of suit; Buyer is entitled to the surplus, if any, representing Buyer's equity.

8.3 Buyer's Right to Redeem

As with a mortgagor, Buyer has the right to redeem the Property by paying the full debt plus interest and the expenses incurred by Seller due to the default, until that right is cut off by the judicial sale.

8.4 No Self-Help

Seller shall not use self-help, eviction, or summary repossession to recover the Property; Seller must proceed by judicial foreclosure/sale.

8.5 Grace; Late Charge

A [____]-day courtesy grace period applies to monthly installments before a late charge of [____]% / $[____] is assessed.

9. DUE-ON-SALE / GARN-ST. GERMAIN NOTICE

If any mortgage encumbers the Property, it may contain a "due-on-sale" clause permitting the lienholder to accelerate the debt upon transfer. The federal Garn-St. Germain Act (12 U.S.C. § 1701j-3) exempts certain transfers but a contract-for-deed sale may trigger acceleration. Seller represents that [☐ the Property is unencumbered ☐ the lienholder has consented ☐ Seller will keep the underlying loan current]. The Parties acknowledge this risk.

10. ASSIGNMENT

Buyer shall not assign this Contract or convey Buyer's equitable interest without Seller's prior written consent, not to be unreasonably withheld. Seller may assign Seller's interest subject to Buyer's rights.

11. RISK OF LOSS

Risk of loss passes to Buyer upon possession. If the Property is materially damaged or condemned, insurance or condemnation proceeds shall be applied as the Parties agree or as required by law, with any balance credited to the purchase price.

12. DISCLOSURES

12.1 Property condition. Seller shall make the property-condition disclosures required for residential sales in Kentucky (see KRS § 324.360 and the Kentucky Seller's Disclosure of Property Conditions form, where applicable).

12.2 Lead-based paint (pre-1978 housing). If the Property is covered target housing, federal law (42 U.S.C. § 4852d; 24 C.F.R. pt. 35; 40 C.F.R. pt. 745) requires Seller to disclose known lead-based paint and hazards, provide the EPA pamphlet "Protect Your Family From Lead in Your Home," provide available records, and give Buyer a 10-day inspection opportunity. The signed Lead Warning Statement must be attached.

☐ Property is covered target housing (lead disclosure attached).
☐ Property is not covered target housing or is exempt (lead disclosure not required).

12.3 Other disclosures: [________________________________].

13. GENERAL PROVISIONS

13.1 Governing law. This Contract is governed by the laws of the Commonwealth of Kentucky.

13.2 Entire agreement; amendment. This Contract is the entire agreement and may be amended only in a writing signed by both Parties.

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

13.4 Notices. Notices must be in writing and delivered to the addresses above.

13.5 Successors. This Contract binds and benefits the Parties' heirs, successors, and permitted assigns.

13.6 Attorney fees and costs. Buyer agrees to pay Seller's reasonable attorney fees and costs of any judicial sale to the extent permitted by law and recoverable from sale proceeds.

14. SIGNATURES AND ACKNOWLEDGMENT

IN WITNESS WHEREOF, the Parties have executed this Contract as of the date first written above.

SELLER:

Signature: _________________________________ Date: [__/__/____]

Printed name: [SELLER LEGAL NAME]

BUYER:

Signature: _________________________________ Date: [__/__/____]

Printed name: [BUYER LEGAL NAME]

ACKNOWLEDGMENT

The foregoing instrument was acknowledged before me on [__/__/____] by [NAME(S)].

_________________________________
Notary Public, Commonwealth of Kentucky
My commission expires: [__/__/____]

15. CONSUMER-PROTECTION GUIDANCE

SOURCES AND REFERENCES

• Sebastian v. Floyd, 585 S.W.2d 381 (Ky. 1979): https://law.justia.com/cases/kentucky/supreme-court/1979/585-s-w-2d-381-1.html
• KRS § 382.110 (Recording of deeds and mortgages): https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=43388
• KRS Chapter 426 (Enforcement of judgments; judicial sale): https://apps.legislature.ky.gov/law/statutes/chapter.aspx?id=37874
• KRS § 360.010 (Legal rate of interest): https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=46439
• Watkins v. Eads, 2012-CA-001655-MR (Ky. App. 2014) (applying Sebastian v. Floyd)
• Federal lead disclosure: https://www.epa.gov/lead/real-estate-disclosure