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, notice cancellation requires written notice to the Purchaser despite a contrary contract term (§ 32-18-01). After service, the cure period is at least one year if the Property exceeds three acres. For Property of three acres or less, it is six months only if the amount claimed due at the notice date exceeds 66⅔% of the original indebtedness; otherwise it is one year (§ 32-18-04). Cure and payment of service costs within the period reinstates the Contract. An action at law or in equity is a separate termination route under § 32-18-04. 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; Underlying Financing
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 written 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." Each party signs below; if an agent signs, attach the written authority required by N.D.C.C. § 9-06-04(3).

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. Seller shall deliver possession on the date in Section 6 and convey legal title by deed upon full performance.

2. DEFINITIONS

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

"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.

Total land area for purposes of N.D.C.C. § 32-18-04: [ACREAGE] acres, as supported by [SURVEY / LEGAL DESCRIPTION / OTHER RECORD].

3.2 Legal Description. The Property is legally described as:

[________________________________________________________________
________________________________________________________________]

If this is a metes-and-bounds description, complete the applicable recording statement under N.D.C.C. § 47-19-03.1: The legal description was ☐ prepared by [DRAFTER NAME], [DRAFTER ADDRESS]; or ☐ obtained from the previously recorded instrument [RECORDING REFERENCE].

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. For a payment more than [____] days late, Purchaser shall reimburse Seller for reasonable, documented administrative costs caused by the delay, capped at $[____]. No charge is intended as a penalty (N.D.C.C. § 9-08-03).

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.

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 by notice except upon written Notice of Cancellation served on Purchaser as provided in Chapter 32-18. Section 8.7 addresses a separate court action.

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 on Purchaser or Purchaser's assigns as a district-court summons is served if the person resides in North Dakota. If the person resides outside the state or cannot be found in it, with the sheriff's return supplying the statutory evidence of inability to find the person, service is by publication once each week for three successive weeks in a legal newspaper of the Property's county or, if none, a qualifying newspaper of an adjoining county.

8.5 Time Allowed to Cure (§ 32-18-04). After service of the Notice, Purchaser shall have:
(a) at least one (1) year if the Property exceeds three acres;
(b) six (6) months if the Property does not exceed three acres and the amount claimed due at the notice date exceeds 66⅔% of the Original Indebtedness; or
(c) one (1) year 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. If this Contract was recorded and cancellation by notice is completed, Seller shall record a copy of the Notice of Cancellation, an affidavit of service, and Seller's affidavit that the default was not cured within the statutory period (N.D.C.C. § 32-18-05).

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.

10.3 Recording Execution. The parties shall provide acknowledgments or other proof of execution required by N.D.C.C. § 47-19-03 and comply with the recorder's applicable signature and submission requirements.

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. Seller shall disclose each mortgage or other lien on Schedule 2 and provide Purchaser copies of the relevant loan and security documents. Before signing, the parties shall determine whether a lender consent or other action is required under those documents for this sale, and who will obtain it.

13. REPRESENTATIONS, WARRANTIES, AND DISCLOSURES

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

13.2 Lead-Based Paint (Covered Target Housing). Before Purchaser becomes obligated under this Contract for covered target housing, Seller shall provide the EPA lead-hazard pamphlet, disclose known lead-based paint and known hazards, provide all available lead-hazard evaluation reports, and allow Purchaser a ten-day inspection or risk-assessment opportunity unless the parties mutually agree in writing to a different period. The parties shall complete and sign Schedule 3, including its separate-sheet Lead Warning Statement, seller disclosures, purchaser acknowledgments, and applicable agent acknowledgment, before executing this Contract. The checklist alone is not the required disclosure. ☐ Coverage and any exemption reviewed ☐ Signed Schedule 3 attached ☐ Pamphlet and reports delivered ☐ Inspection period completed, waived, or changed by mutual written 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 notice cancellation, Seller must serve a statutory Notice of Cancellation. The cure period depends on the Property's acreage and the amount claimed due compared with the original debt; it is at least one year for Property over three acres (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. An action concerning the Property shall be filed in a court with jurisdiction and in a county where venue is proper under applicable law.

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. The parties intend amendments to be signed writings, subject to N.D.C.C. § 9-09-06, which also permits alteration by an executed oral agreement. No provision waives the statutory notice required by § 32-18-01.

14.6 Severability. If a provision is held invalid, the remainder remains effective to the extent it can operate independently. The parties may agree in writing to a replacement provision.

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. Electronic signatures may be used only where applicable law and the county recorder permit them; provide original signatures when required for recording under N.D.C.C. § 47-19-03.

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: [__/__/____]

SELLER ACKNOWLEDGMENT

State of [STATE]

County of [COUNTY]

This record was acknowledged before me on [__/__/____] by [SELLER SIGNER NAME], [INDIVIDUAL / CAPACITY AND ENTITY NAME].

Signature of notarial officer: _________________________________

Official stamp: [STAMP]

Title of office: [TITLE]

My commission expires: [__/__/____]

PURCHASER ACKNOWLEDGMENT

State of [STATE]

County of [COUNTY]

This record was acknowledged before me on [__/__/____] by [PURCHASER SIGNER NAME], [INDIVIDUAL / CAPACITY AND ENTITY NAME].

Signature of notarial officer: _________________________________

Official stamp: [STAMP]

Title of office: [TITLE]

My commission expires: [__/__/____]

16. EXHIBITS AND SCHEDULES

Schedule 1 – Permitted Exceptions / Title Matters
Schedule 2 – Underlying Financing Disclosure
Schedule 3 – Federal Lead Warning and Disclosure Attachment for covered target housing (included below; complete and sign before Purchaser is obligated)
Schedule 4 – North Dakota Property Condition Disclosure
Schedule 5 – Memorandum of Contract for Deed (for recording)

SCHEDULE 3 — LEAD WARNING AND DISCLOSURE ATTACHMENT

Property: [________________________________________________]

LEAD WARNING STATEMENT

Every purchaser of any interest in residential real property on which a residential dwelling was built prior to 1978 is notified that such property may present exposure to lead from lead-based paint that may place young children at risk of developing lead poisoning. Lead poisoning in young children may produce permanent neurological damage, including learning disabilities, reduced intelligence quotient, behavioral problems, and impaired memory. Lead poisoning also poses a particular risk to pregnant women. The seller of any interest in residential real property is required to provide the buyer with any information on lead-based paint hazards from risk assessments or inspections in the seller's possession and notify the buyer of any known lead-based paint hazards. A risk assessment or inspection for possible lead-based paint hazards is recommended prior to purchase.

Seller disclosure: ☐ Seller knows of lead-based paint or lead-based-paint hazards: [DESCRIBE BASIS, LOCATION, AND CONDITION: ________________________________] ☐ Seller has no knowledge of lead-based paint or lead-based-paint hazards.

Records and reports provided to Buyer: [LIST EACH AVAILABLE LEAD-HAZARD RECORD OR REPORT PROVIDED: ________________________________] ☐ Seller has no such records or reports available.

Buyer acknowledgment: By signing below, Buyer acknowledges receipt of Seller's disclosure and the records or reports listed above, and receipt of the federally approved lead-hazard information pamphlet. Buyer also states that Buyer has read the Lead Warning Statement and understands its contents.

Inspection opportunity: Buyer ☐ received a 10-day opportunity to conduct a lead risk assessment or inspection before becoming obligated under this Contract; ☐ received a different period mutually agreed in writing: [____] days; or ☐ waives that opportunity.

Seller's agent certification, if an agent is involved: I informed Seller of Seller's obligations under 42 U.S.C. § 4852d and am aware of my duty to ensure compliance with the federal lead-disclosure requirements.

Agent name (repeat for each involved agent): [________________________________] Agent signature: [________________________________] Date: [__/__/____]

By signing, Seller, any involved agent, and Buyer certify the accuracy of their statements to the best of their knowledge.

Seller signature (repeat for each seller): [________________________________] Date: [__/__/____]

Buyer signature (repeat for each purchaser): [________________________________] Date: [__/__/____]

Seller and any involved agent must retain a copy of the completed attachment for at least three years from completion of the sale under 40 C.F.R. § 745.113(c)(1).

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. §§ 47-19-03, 47-19-03.1 (proof of execution and legal-description drafter statement for recording)
• Residential Lead-Based Paint Hazard Reduction Act, 42 U.S.C. § 4852d

END OF DOCUMENT