Contract for Deed (Land Contract) - North Dakota

CONTRACT FOR DEED

(NORTH DAKOTA – INSTALLMENT LAND CONTRACT / SELLER FINANCING)

IMPORTANT NORTH DAKOTA NOTICE. Under N.D.C.C. Chapter 32-18, a contract for deed may not be canceled, terminated, or forfeited except upon the statutory written notice to the Purchaser, regardless of any contrary provision in this Contract (§ 32-18-01). After service of the statutory Notice of Cancellation, the Purchaser has a statutory period to cure the default and reinstate the Contract: six (6) months if the amount claimed due is more than 66⅔% of the original indebtedness, or one (1) year in any other case (§ 32-18-04). If the Purchaser cures and pays the cost of service within that period, the Contract is reinstated as if no default had occurred. The statutory notice is not required only where cancellation is sought through an action at law or in equity. This document must be reviewed by North Dakota counsel before use.

TABLE OF CONTENTS

1. Parties and Recitals
2. Definitions
3. Property and Legal Description
4. Purchase Price, Down Payment, and Installment Terms
5. Title; Deed Held and Escrow
6. Possession
7. Taxes, Insurance, Maintenance, and Utilities
8. Default and Remedies (Statutory Cancellation – Ch. 32-18)
9. Prepayment
10. Recording (§ 47-19-01)
11. Risk of Loss
12. Assignment; Due-on-Sale (Garn–St. Germain)
13. Representations, Warranties, and Disclosures
14. General Provisions
15. Execution, Acknowledgment, and Notary
16. Exhibits and Schedules
17. Sources and References

1. PARTIES AND RECITALS

1.1 Parties. This Contract for Deed (the "Contract") is made effective as of [__/__/____] (the "Effective Date") by and between [SELLER LEGAL NAME], of [SELLER ADDRESS] ("Seller" or "Vendor"), and [PURCHASER LEGAL NAME], of [PURCHASER ADDRESS] ("Purchaser" or "Vendee"). Each is a "Party" and together the "Parties."

1.2 Recitals.
A. Seller owns fee-simple title to the real property described in Section 3 (the "Property").
B. Seller agrees to sell, and Purchaser agrees to buy, the Property on the installment terms herein, with Seller retaining legal title as security until the purchase price is paid in full.
C. Purchaser shall receive possession and equitable title upon execution; Seller shall convey legal title by deed upon full performance.

2. DEFINITIONS

"Contract Balance" – the unpaid principal portion of the purchase price outstanding at any time.

"Equitable Title" – the ownership interest the Purchaser acquires upon execution, with legal title retained by Seller as security.

"Escrow Agent" – [ESCROW/TITLE COMPANY NAME AND ADDRESS], or a successor agreed in writing.

"Event of Default" – any event described in Section 8.1.

"Installment Payment" – each periodic payment of principal and interest under Section 4.

"Notice of Cancellation" – the statutory written notice under N.D.C.C. §§ 32-18-02 and 32-18-03.

"Original Indebtedness" – the financed balance stated in Section 4.3, used to determine the cure period under § 32-18-04.

3. PROPERTY AND LEGAL DESCRIPTION

3.1 Property. Seller agrees to sell and Purchaser agrees to buy the real property located in [COUNTY] County, North Dakota, commonly known as [STREET ADDRESS, CITY, ND ZIP], together with all improvements, fixtures, easements, and appurtenances.

3.2 Legal Description. The Property is legally described as:

[________________________________________________________________
________________________________________________________________]

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 $[____________] on or before the Effective Date, receipt of which Seller acknowledges.

4.3 Financed Amount (Original Indebtedness). The financed balance is $[____________] (Purchase Price less down payment).

4.4 Interest Rate. The financed balance bears interest at [____]% per annum.

4.5 Installment Schedule.

4.6 Application of Payments. Payments apply first to late charges, then accrued interest, then principal, unless otherwise required by law.

4.7 Late Charge. A late charge of $[____] or [____]% applies to payments more than [____] days late.

4.8 Place of Payment. Payments are made to Seller at [ADDRESS] or to the Escrow Agent as designated.

5. TITLE; DEED HELD AND ESCROW

5.1 Retention of Legal Title. Seller retains legal title to the Property as security until the Purchase Price and all other sums due are paid in full.

5.2 Deed Held in Escrow. Seller shall deposit with the Escrow Agent a duly executed and acknowledged [warranty deed] conveying the Property to Purchaser, to be delivered upon full payment and performance.

5.3 Title Evidence. Seller shall furnish, at [Seller's/Purchaser's] expense, a title insurance commitment or abstract showing marketable title subject only to Permitted Exceptions (Schedule 1).

5.4 Conveyance on Payoff. Upon full payment, Seller shall deliver and record the deed, conveying marketable title free of liens except Permitted Exceptions and matters created by Purchaser.

6. POSSESSION

Purchaser is entitled to possession of the Property as of [__/__/____] and shall maintain it in good condition. Purchaser holds equitable title subject to this Contract.

7. TAXES, INSURANCE, MAINTENANCE, AND UTILITIES

7.1 Taxes and Assessments. Purchaser shall pay, before delinquency, all real property taxes and special assessments levied on the Property from the Effective Date forward, and shall provide proof of payment to Seller on request.

7.2 Insurance. Purchaser shall maintain hazard insurance on the improvements for not less than $[____________], naming Seller as an additional insured / loss payee as its interest appears.

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

7.4 Utilities. Purchaser shall pay all utilities and service charges from the date of possession.

8. DEFAULT AND REMEDIES (STATUTORY CANCELLATION – CH. 32-18)

8.1 Events of Default. Each of the following is an Event of Default: (a) failure to make any Installment Payment when due; (b) failure to pay taxes or maintain insurance; (c) commission of waste; (d) unauthorized transfer in violation of Section 12; or (e) breach of any other material covenant.

8.2 Statutory Notice Required (§ 32-18-01). Notwithstanding any provision of this Contract to the contrary, Seller shall not declare a cancellation, termination, or forfeiture of this Contract except upon written Notice of Cancellation served on Purchaser as provided in Chapter 32-18.

8.3 Contents of Notice (§ 32-18-02). The Notice of Cancellation shall, within a reasonable time after the default, state that the default occurred, that the Contract will be canceled or terminated, and the time when cancellation or termination will take effect as provided in § 32-18-04.

8.4 Service of Notice (§ 32-18-03). The Notice shall be served upon Purchaser (or Purchaser's assigns) in the manner provided for service of a summons in the district court if the person resides within North Dakota; if the person resides outside the state or cannot be found therein, by publication once each week for three successive weeks in a legal newspaper of the county (or an adjoining county) as provided by statute.

8.5 Time Allowed to Cure (§ 32-18-04). After service of the Notice, Purchaser shall have:
(a) six (6) months to cure if the amount claimed due at the date of notice is more than 66⅔% of the Original Indebtedness; or
(b) one (1) year to cure in any other case.

Upon performance and payment of amounts due plus the cost of service within that period, this Contract is reinstated as if no default had occurred. If Purchaser does not cure within the statutory period, the Contract terminates and may not be reinstated by any later offer of performance or tender.

8.6 Recording of Cancellation. Upon a completed cancellation of a recorded contract, Seller shall record the required evidence of cancellation as provided in Chapter 32-18.

8.7 Action in Lieu of Notice. The statutory notice is not required where Seller instead seeks termination by an action at law or in equity brought for that purpose (§ 32-18-04).

8.8 Attorney Fees. Recoverable to the extent permitted by North Dakota law.

9. PREPAYMENT

Purchaser may prepay all or part of the Contract Balance at any time without penalty. Partial prepayments apply to principal and do not postpone scheduled payments unless Seller agrees in writing.

10. RECORDING (§ 47-19-01)

10.1 Recording. This Contract (or a memorandum of it) may be recorded with the County Recorder of [COUNTY] County, North Dakota; under N.D.C.C. § 47-19-01, any instrument affecting the title to or possession of real property may be recorded.

10.2 Who Records / Costs. [Seller/Purchaser] shall record this Contract (or memorandum) within [____] days of the Effective Date and pay recording fees.

11. RISK OF LOSS

From the date of possession, risk of loss is on Purchaser. Insurance proceeds shall be applied, at [Seller's/Purchaser's] election consistent with this Contract, to restoration or to the Contract Balance.

12. ASSIGNMENT; DUE-ON-SALE (GARN–ST. GERMAIN)

12.1 Assignment by Purchaser. Purchaser shall not assign this Contract or transfer any interest in the Property without Seller's prior written consent, which [shall/shall not] be unreasonably withheld.

12.2 Underlying Financing; Due-on-Sale. If the Property is encumbered by a prior mortgage with a due-on-sale clause, this Contract may trigger acceleration. The federal Garn–St. Germain Act, 12 U.S.C. § 1701j-3, preempts most state restrictions and contains limited exemptions. Seller discloses underlying financing on Schedule 2.

13. REPRESENTATIONS, WARRANTIES, AND DISCLOSURES

13.1 Seller's Title. Seller represents Seller holds marketable fee-simple title subject only to Permitted Exceptions.

Lead-Based Paint (Covered Target Housing). Before Purchaser is obligated under this Contract, Seller must complete the current federal process for covered target housing: provide the EPA lead-hazard pamphlet; disclose known lead-based paint and known lead-based-paint hazards; provide every available lead-hazard evaluation report; attach the large-type Lead Warning Statement and Purchaser-signed acknowledgments to this Contract; and allow Purchaser a 10-day risk-assessment or inspection opportunity unless the parties mutually agree to a different period. ☐ Federal coverage and any exemption reviewed ☐ Current warning/disclosure attachment completed ☐ Pamphlet and available reports delivered ☐ Inspection period completed, waived, or changed by mutual agreement.

13.3 Property Condition Disclosure. Seller shall provide a property condition disclosure consistent with North Dakota real estate practice. (Schedule 4.) Purchaser otherwise accepts the Property [AS-IS / with the following warranties: ____].

13.4 Consumer-Protection Guidance.

• Purchaser does not receive legal title until the purchase price is paid in full.
• Record this Contract promptly to protect your interest.
• Before any cancellation, the Seller must serve a statutory Notice of Cancellation and you have 6 months or 1 year to cure depending on how much you have paid (N.D.C.C. § 32-18-04).
• Keep proof of every payment; verify taxes and insurance are current.
• Confirm whether any prior mortgage encumbers the Property.
• Both Parties are strongly encouraged to obtain independent legal counsel and title insurance.

14. GENERAL PROVISIONS

14.1 Governing Law. This Contract is governed by North Dakota law, including N.D.C.C. Chapter 32-18.

14.2 Forum. The district court of the county where the Property is located has jurisdiction.

14.3 Time of Essence. Time is of the essence, subject to the mandatory statutory notice and cure periods of Chapter 32-18.

14.4 Notices. Except where Chapter 32-18 specifies the method, notices must be in writing and delivered personally, by certified mail (return receipt requested), or by nationally recognized overnight courier to the addresses above.

14.5 Entire Agreement; Amendments. This Contract is the entire agreement and may be amended only in a signed writing; no provision may waive the statutory notice required by § 32-18-01.

14.6 Severability. Invalid provisions shall be reformed to the minimum extent necessary; the remainder remains in effect.

14.7 Successors. This Contract binds and benefits the Parties and their permitted successors and assigns.

14.8 Counterparts; Electronic Signatures. This Contract may be executed in counterparts and by electronic signature.

15. EXECUTION, ACKNOWLEDGMENT, AND NOTARY

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

SELLER

____________________________________
[SELLER LEGAL NAME]
Date: [__/__/____]

PURCHASER

____________________________________
[PURCHASER LEGAL NAME]
Date: [__/__/____]

NOTARY ACKNOWLEDGMENT

State of North Dakota )
County of __________ ) ss.

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

____________________________________
Notary Public
My Commission Expires: [__/__/____]

16. EXHIBITS AND SCHEDULES

Schedule 1 – Permitted Exceptions / Title Matters
Schedule 2 – Underlying Financing Disclosure
Schedule 3 – Lead-Based Paint Disclosure (pre-1978 dwellings)
Schedule 4 – North Dakota Property Condition Disclosure
Schedule 5 – Memorandum of Contract for Deed (for recording)

17. SOURCES AND REFERENCES

• N.D.C.C. Chapter 32-18 (Cancellation of Land Contracts): https://ndlegis.gov/cencode/t32c18.pdf
• N.D.C.C. § 32-18-01 (notice required); § 32-18-02 (contents); § 32-18-03 (service); § 32-18-04 (time to cure: 6 months / 1 year)
• N.D.C.C. § 47-19-01 (instruments entitled to record): https://ndlegis.gov/cencode/t47c19.pdf
• N.D.C.C. § 9-06-04 (statute of frauds)
• Garn–St. Germain Depository Institutions Act, 12 U.S.C. § 1701j-3
• Residential Lead-Based Paint Hazard Reduction Act, 42 U.S.C. § 4852d

END OF DOCUMENT