Contract for Deed (Land Contract) - Maryland

CONTRACT FOR DEED (LAND INSTALLMENT CONTRACT)

(State of Maryland — Md. Code, Real Property §§ 10-101 to 10-110)

RECORDING INFORMATION

After Recording Return To:
[NAME]
[ADDRESS]

Prepared By:
[NAME OF DRAFTER]
[ADDRESS]
Maryland Attorney No. [______]

TABLE OF CONTENTS

1. Parties and Recitals
2. Definitions
3. Property; Legal Description
4. Purchase Price, Down Payment, and Installment Terms
5. Title; Deed Held Pending Payoff; Escrow
6. Possession
7. Taxes, Insurance, and Maintenance
8. Vendor Covenants and Restrictions (§§ 10-105, 10-106)
9. Default and Remedies; Purchaser Grace and Cure
10. Prepayment
11. Risk of Loss; Condemnation
12. Recording (§ 10-102)
13. Assignment
14. Due-on-Sale / Garn-St. Germain
15. Required Disclosures
16. General Provisions
17. Execution, Acknowledgment, and Statutory Receipt
18. Exhibit A — Legal Description

1. PARTIES AND RECITALS

This CONTRACT FOR DEED (this "Contract" or "land installment contract") is made as of [__/__/____] (the "Effective Date") by and between:

• Vendor (Seller): [VENDOR LEGAL NAME], whose address is [________________________________] ("Vendor"); and
• Purchaser (Buyer): [PURCHASER LEGAL NAME], whose address is [________________________________] ("Purchaser").

Vendor and Purchaser are each a "Party" and together the "Parties."

Recitals

A. Vendor holds fee simple title to the real property described on Exhibit A (the "Property").
B. Vendor agrees to sell, and Purchaser agrees to buy, the Property on an installment basis under which Vendor retains legal title as security for Purchaser's obligation, and Purchaser receives possession and equitable title, all as a "land installment contract" under Md. Code, Real Property § 10-101.
C. The Parties intend this Contract to comply with the Land Installment Contract Act, Md. Code, Real Property §§ 10-101 to 10-110.

NOW, THEREFORE, for good and valuable consideration, the Parties agree as follows:

2. DEFINITIONS

"Applicable Law" — all federal, state, and local laws applicable to the Property or this transaction, including Md. Code, Real Property §§ 10-101 to 10-110.
"Down Payment" — the payment made on account of the purchase price at or before execution, per § 10-101(b).
"Equitable Title" — the ownership interest acquired by Purchaser upon execution, with legal title retained by Vendor as security.
"Purchase Price" — the total price stated in Section 4.
"Unpaid Balance" — the Purchase Price less the Down Payment and all principal payments credited.

3. PROPERTY; LEGAL DESCRIPTION

3.1 Property. Vendor agrees to sell the Property located at [PROPERTY ADDRESS], [CITY], [COUNTY] County, Maryland, legally described on Exhibit A, together with all improvements, easements, and appurtenances.

3.2 Property Type. The Property is ☐ improved residential property occupied or to be occupied by Purchaser as a dwelling; ☐ an unimproved subdivided lot intended for residential improvement (§ 10-101(d)).

3.3 Tax Account / Parcel ID: [________________________________].

4. PURCHASE PRICE, DOWN PAYMENT, AND INSTALLMENT TERMS

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

4.2 Down Payment. Purchaser shall pay a Down Payment of $[____] at execution.

4.3 Financed Balance. The balance of $[____] (the "Financed Balance") shall bear interest at [____]% per annum and be paid in [____] or more subsequent installment payments (§ 10-101(c)(1)).

4.4 Installment Payments. Purchaser shall pay $[____] per month, due on the [____] day of each month, beginning [__/__/____], until paid in full or until the maturity/balloon date of [__/__/____].

4.5 Payment Schedule.

4.6 Application of Payments. Payments shall be applied first to late charges, then to accrued interest, then to principal, except as § 10-106 may otherwise require.

4.7 Annual Statement. Vendor shall furnish Purchaser a written statement of account at least annually showing amounts paid, interest, principal, taxes, insurance, and the Unpaid Balance, as required by Md. Code, Real Property § 10-105.

5. TITLE; DEED HELD PENDING PAYOFF; ESCROW

5.1 Retention of Legal Title. Vendor retains legal title to the Property as security for Purchaser's obligations. Purchaser holds equitable title and the right of possession.

5.2 Deed Upon Payoff. Upon Purchaser's payment of the Purchase Price and full performance, Vendor shall execute and deliver to Purchaser a ☐ general warranty deed ☐ special warranty deed conveying marketable fee simple title, subject only to the Permitted Encumbrances listed on Exhibit A.

5.3 Escrow of Deed (optional). [CHECK ONE]
☐ The Parties shall deposit an executed deed with [ESCROW AGENT], to be released to Purchaser upon payoff and to Vendor upon a properly completed default.
☐ No deed shall be escrowed; Vendor shall deliver the deed at payoff.

5.4 State of Title. Vendor represents that, as of the Effective Date, Vendor holds title subject only to the encumbrances disclosed on Exhibit A and that any superior mortgage or deed of trust is disclosed in Section 8.3.

6. POSSESSION

Purchaser shall be entitled to exclusive possession of the Property on [__/__/____], and shall retain possession so long as Purchaser is not in uncured default.

7. TAXES, INSURANCE, AND MAINTENANCE

7.1 Taxes and Assessments. Purchaser shall pay all real property taxes and assessments before delinquency and provide paid receipts to Vendor on request.

7.2 Insurance. Purchaser shall keep the improvements insured against fire and hazards under a special-form policy for not less than $[____], naming Vendor as an additional insured/loss payee.

7.3 Maintenance. Purchaser shall keep the Property in good repair, free of waste, and in compliance with Applicable Law.

8. VENDOR COVENANTS AND RESTRICTIONS (§§ 10-105, 10-106)

8.1 Annual Statement. Vendor shall comply with the annual statement requirement of § 10-105.

8.2 Restriction on Encumbrances. Vendor shall not encumber the Property by mortgage or otherwise except as permitted by Md. Code, Real Property § 10-106, and any such encumbrance must not exceed the unpaid balance owed by Purchaser nor mature later than the Contract balance, consistent with § 10-106.

8.3 Existing Senior Lien (disclose). ☐ None. ☐ The Property is subject to a senior [mortgage/deed of trust] held by [LENDER], original amount $[____], current balance approximately $[____], monthly payment $[____]. Vendor covenants to keep such senior lien current and to apply Purchaser's payments toward it.

9. DEFAULT AND REMEDIES; PURCHASER GRACE AND CURE

9.1 Events of Default. Purchaser is in default upon (a) failure to pay any installment within [____] days after the due date; (b) failure to pay taxes or insurance; (c) waste; or (d) breach of any other material covenant not cured within [30] days after written notice.

9.2 Notice and Cure / Grace. Before exercising any remedy, Vendor shall give Purchaser written notice specifying the default and a reasonable opportunity to cure of not less than [____] days. Maryland's Land Installment Contract Act and Maryland equity courts disfavor forfeiture of a purchaser's accrued equity; Vendor shall not enforce a forfeiture in a manner that operates as an unconscionable penalty.

9.3 Vendor Remedies. Subject to Section 9.2 and Applicable Law, upon an uncured default Vendor may (a) sue for past-due installments; (b) accelerate the Unpaid Balance if this Contract expressly permits and Applicable Law allows; (c) bring an action to terminate the Contract and recover possession; or (d) where required by equity, pursue foreclosure/judicial sale as on an equitable mortgage, with an accounting to Purchaser for accrued equity. Vendor's remedies are cumulative to the extent permitted by law.

9.4 Restriction on Forfeiture Clauses. Any provision purporting to forfeit Purchaser's payments or equity is enforceable only to the extent permitted by Md. Code, Real Property §§ 10-101 to 10-110 and Maryland equity. A forfeiture is subject to judicial review for unconscionability.

9.5 Purchaser Remedies. If Vendor defaults, Purchaser may sue for specific performance, damages, or, where Vendor has failed to record under § 10-102(f), cancel and recover all payments and deposits.

10. PREPAYMENT

Purchaser may prepay all or any part of the Unpaid Balance at any time without penalty. Upon prepayment in full, Vendor shall promptly deliver the deed and a release.

11. RISK OF LOSS; CONDEMNATION

11.1 Risk of Loss. From the date of possession, risk of loss passes to Purchaser, subject to application of insurance proceeds to restoration or to the Unpaid Balance at Purchaser's election if not in default.

11.2 Condemnation. Condemnation awards shall be applied first to the Unpaid Balance, with the balance to Purchaser.

12. RECORDING (§ 10-102)

12.1 Vendor's Duty to Record. Within 15 days after this Contract is signed by both Vendor and Purchaser, Vendor shall cause this Contract to be recorded among the land records of [COUNTY] County, Maryland, and shall mail the recorder's receipt to Purchaser, as required by Md. Code, Real Property § 10-102(f).

12.2 Effect of Failure to Record. If Vendor fails to record within the time required, Purchaser has the unconditional right to cancel this Contract and to receive an immediate refund of all payments and deposits, provided Purchaser exercises the right before Vendor records the Contract (§ 10-102(f)).

12.3 This Section satisfies the requirement of § 10-102(f) that the duty of recordation and mailing of the recorder's receipt be written clearly on the Contract.

13. ASSIGNMENT

13.1 By Purchaser. Purchaser may assign its equitable interest only with Vendor's prior written consent, not to be unreasonably withheld; no assignment releases Purchaser absent a written novation.

13.2 By Vendor. Vendor may assign its interest subject to this Contract and the statutory protections, which run with the Property in favor of Purchaser.

14. DUE-ON-SALE / GARN-ST. GERMAIN

14.1 If the Property is subject to a senior mortgage with a due-on-sale clause, this installment sale may trigger acceleration. The federal Garn-St. Germain Depository Institutions Act, 12 U.S.C. § 1701j-3, exempts certain transfers from due-on-sale enforcement, but an installment land contract on property that is not the borrower's residence (or where occupancy rights transfer) is generally not exempt.

14.2 Vendor represents that ☐ there is no senior lien with a due-on-sale clause; ☐ Vendor has obtained the lender's written consent/waiver; ☐ Purchaser has been advised of the acceleration risk and accepts it.

15. REQUIRED DISCLOSURES

15.1 Lead-Based Paint (pre-1978). If the Property is covered target housing, Vendor has provided Purchaser the EPA pamphlet "Protect Your Family from Lead in Your Home," a completed lead-based paint disclosure, and any known reports, and has allowed the federally required opportunity to conduct a risk assessment, per 42 U.S.C. § 4852d and 24 C.F.R. Part 35. ☐ Applies ☐ Not covered or exempt — N/A.

15.2 Property Condition. Vendor has provided Purchaser the applicable Maryland Residential Property Disclosure/Disclaimer Statement (Md. Code, Real Property § 10-702) or has disclosed known latent defects. ☐ Provided ☐ Not applicable.

15.3 Right to Counsel and Title Examination. Purchaser is advised in writing to obtain independent legal counsel, a title examination, and title insurance before signing.

16. GENERAL PROVISIONS

16.1 Governing Law. This Contract is governed by Maryland law.
16.2 Entire Agreement. This Contract and its Exhibits are the entire agreement and supersede prior understandings.
16.3 Amendment; Waiver. Effective only in a signed writing.
16.4 Severability. Invalid provisions are reformed to the minimum extent necessary; the remainder stays in effect. Statutory protections under §§ 10-101 to 10-110 control over any conflicting provision.
16.5 Notices. In writing, by certified mail, overnight courier, or hand delivery to the addresses in Section 1.
16.6 Time of Essence. Time is of the essence.
16.7 Counterparts; Electronic Signatures. Permitted under the Maryland Uniform Electronic Transactions Act.

17. EXECUTION, ACKNOWLEDGMENT, AND STATUTORY RECEIPT

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

VENDOR:
________________________________
[VENDOR NAME]
Date: [__/__/____]

PURCHASER:
________________________________
[PURCHASER NAME]
Date: [__/__/____]

Statutory Receipt of Copy (§ 10-102(b)-(c))

I/we, the Purchaser, acknowledge that I/we received an exact copy of this land installment contract signed by the Vendor.

________________________________
[PURCHASER NAME] — Date: [__/__/____]

Notary Acknowledgment — Maryland

STATE OF MARYLAND, COUNTY OF [____], to wit:

On [__/__/____], before me, the undersigned notary, personally appeared [NAME(S)], known to me (or satisfactorily proven) to be the person(s) whose name(s) is/are subscribed to the foregoing instrument, and acknowledged that they executed it for the purposes therein.

________________________________
Notary Public
My commission expires: [__/__/____]

18. EXHIBIT A — LEGAL DESCRIPTION

[INSERT FULL LEGAL DESCRIPTION — metes and bounds or platted lot/block/subdivision, county, tax/parcel ID. List Permitted Encumbrances here.]

Sources and References

• Md. Code, Real Property §§ 10-101 to 10-110 — Land Installment Contracts: https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=grp&section=10-101
• Md. Code, Real Property § 10-102 (form, delivery, 15-day recording): https://law.justia.com/codes/maryland/real-property/title-10/subtitle-1/section-10-102/
• Md. Code, Real Property § 10-702 — Residential Property Disclosure: https://law.justia.com/codes/maryland/real-property/title-10/
• 42 U.S.C. § 4852d; 24 C.F.R. Part 35 — Lead-Based Paint Disclosure: https://www.epa.gov/lead
• 12 U.S.C. § 1701j-3 — Garn-St. Germain Act: https://www.law.cornell.edu/uscode/text/12/1701j-3