Contract for Deed (Land Contract)

CONTRACT FOR DEED (INSTALLMENT LAND CONTRACT)

(Rhode Island)

TABLE OF CONTENTS

1. Document Header and Parties
2. Definitions
3. Property; Legal Description
4. Purchase Price; Down Payment; Installment Terms
5. Interest; Amortization; Balloon; Prepayment
6. Legal Title; Escrow of Deed; Delivery at Payoff
7. Possession; Taxes, Insurance, and Maintenance
8. Buyer's Equitable Interest; Recording
9. Default and Remedies (Rhode Island Equitable-Mortgage Rule)
10. Title; Marketability; Title Insurance
11. Risk of Loss; Condemnation
12. Assignment; Due-on-Sale (Garn–St. Germain)
13. Disclosures (Lead-Based Paint; Property Condition)
14. General Provisions
15. Execution; Notarial Acknowledgment
16. Exhibits and Schedules

1. DOCUMENT HEADER AND PARTIES

This Contract for Deed (also known as an Installment Land Contract, this "Contract") is made as of [__/__/____] (the "Effective Date") by and between:

a. Seller: [SELLER LEGAL NAME], a [STATE] [ENTITY TYPE OR "individual"], whose address is [SELLER ADDRESS] ("Seller"); and

b. Buyer: [BUYER LEGAL NAME], a [STATE] [ENTITY TYPE OR "individual"], whose address is [BUYER ADDRESS] ("Buyer").

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

Recitals

A. Seller is the fee simple owner of the real property described in Exhibit A (the "Property").

B. Buyer desires to purchase, and Seller desires to sell, the Property on an installment basis under which Seller retains legal title as security until the Purchase Price is paid in full, at which time Seller will convey title by deed.

C. The Parties acknowledge that Rhode Island has no installment-land-contract statute and that, where Buyer acquires substantial equity, a court may treat this Contract as an equitable mortgage requiring foreclosure (R.I. Gen. Laws § 34-27-1 et seq.) and affording Buyer an equity of redemption.

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

2. DEFINITIONS

"Business Day" – any day other than Saturday, Sunday, or a legal holiday on which Rhode Island-chartered banks are authorized or required to close.

"Closing" / "Final Closing" – delivery of the Deed upon payment in full of all amounts due under this Contract.

"Deed" – a [SELECT: Warranty Deed / Special Warranty Deed / Quitclaim Deed] in recordable form conveying the Property to Buyer subject only to the Permitted Exceptions.

"Default Rate" – [____]% per annum or the maximum rate permitted by law, whichever is less.

"Equity" – the difference between the fair market value of the Property and the Unpaid Balance, plus the value of Buyer's improvements.

"Permitted Exceptions" – the matters listed in Exhibit B.

"Purchase Price" – the amount set forth in Section 4.1.

"Unpaid Balance" – the principal portion of the Purchase Price remaining unpaid at any time, together with accrued interest and other charges.

3. PROPERTY; LEGAL DESCRIPTION

3.1 Property. Seller agrees to sell and Buyer agrees to buy the real property located at [PROPERTY ADDRESS], [CITY/TOWN], [COUNTY] County, Rhode Island, legally described in Exhibit A, together with all improvements, fixtures, easements, and appurtenances.

3.2 Personal Property Included. The following personal property is included, free of liens: [LIST OR "None"].

3.3 Condition; "As-Is." Except as expressly stated herein and in the disclosures attached, Buyer accepts the Property in its present "AS-IS" condition, subject to Buyer's inspection rights in Section 13.

4. PURCHASE PRICE; DOWN PAYMENT; INSTALLMENT TERMS

4.1 Purchase Price. The total Purchase Price is $[____________].

4.2 Down Payment. Buyer shall pay a down payment of $[____________] on or before [__/__/____].

4.3 Financed Amount. The amount financed (Purchase Price less down payment) is $[____________] (the "Financed Amount").

4.4 Installment Payments. Buyer shall pay the Financed Amount, with interest, in installments as follows:

4.5 Application of Payments. Payments are applied first to late charges and costs, then to accrued interest, then to principal.

4.6 Maximum Lawful Rate. No provision shall require interest exceeding the maximum permitted by Rhode Island law; any excess shall be applied to principal or refunded.

5. INTEREST; AMORTIZATION; BALLOON; PREPAYMENT

5.1 Interest. Interest accrues on the Unpaid Balance at the rate stated in Section 4.4 from the Effective Date.

5.2 Balloon Disclosure. [IF APPLICABLE] THIS CONTRACT CONTAINS A BALLOON PAYMENT. A SUBSTANTIAL FINAL PAYMENT OF $[__________] WILL BE DUE ON [__/__/____]. BUYER MAY NEED TO REFINANCE OR OBTAIN OTHER FUNDS TO PAY THE BALLOON.

5.3 Prepayment. Buyer may prepay all or part of the Unpaid Balance at any time [SELECT: without penalty / subject to a prepayment charge of [____]%]. Partial prepayments are applied to principal and do not postpone any scheduled payment.

5.4 Amortization Statement. Upon Buyer's written request, Seller shall provide a statement of the Unpaid Balance and amounts applied to principal and interest.

6. LEGAL TITLE; ESCROW OF DEED; DELIVERY AT PAYOFF

6.1 Retention of Legal Title. Seller retains legal title to the Property as security until Buyer has paid the Purchase Price and performed all obligations in full. Buyer holds equitable title and the right of possession.

6.2 Escrow of Deed (Optional). [SELECT ONE]
☐ Seller shall deposit an executed, recordable Deed with [ESCROW AGENT/TITLE COMPANY] to be held in escrow and delivered to Buyer upon payment in full.
☐ The Deed shall be delivered by Seller directly upon payment in full; no deed is escrowed.

6.3 Delivery at Payoff. Within [____] Business Days after Buyer pays all amounts due, Seller shall execute and deliver the Deed and record a release/discharge of this Contract at [SELECT: Seller's / Buyer's] expense.

7. POSSESSION; TAXES, INSURANCE, AND MAINTENANCE

7.1 Possession. Buyer is entitled to possession on [__/__/____].

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

7.3 Insurance. Buyer shall keep the improvements insured against fire and other casualty for not less than [SELECT: replacement cost / the Unpaid Balance], naming Seller as an additional insured / loss payee as its interest appears.

7.4 Maintenance. Buyer shall maintain the Property in good repair, commit no waste, and comply with all laws and any condominium or association requirements.

8. BUYER'S EQUITABLE INTEREST; RECORDING

8.1 Recording (R.I. Gen. Laws § 34-11-1). Because this Contract creates an interest in land for a term longer than one year, it (or a Memorandum of Installment Land Contract in the form of Exhibit C) shall be made in writing, duly signed, acknowledged, delivered, and recorded in the land evidence records of the city or town of [CITY/TOWN], Rhode Island, pursuant to R.I. Gen. Laws § 34-11-1 and § 34-13-1 et seq. Recording gives constructive notice and protects priority against subsequent purchasers and creditors.

8.2 Recording Costs. Recording fees and any conveyance/transfer tax shall be paid by [SELECT: Buyer / Seller] as agreed.

8.3 No Encumbrance by Seller. Seller shall not further encumber or convey the Property in a manner impairing Buyer's interest, and shall apply Buyer's payments to keep any underlying loan current (see Section 12.3).

9. DEFAULT AND REMEDIES (RHODE ISLAND EQUITABLE-MORTGAGE RULE)

9.1 Events of Default. Buyer is in default if Buyer (a) fails to pay any installment within [____] days after its due date; (b) fails to pay taxes or insurance; (c) commits waste; or (d) breaches any other material covenant and fails to cure within [____] days after written notice.

9.2 Notice and Right to Cure. Seller shall give Buyer written notice of default specifying the default and a cure period of not less than [30] days. Buyer may cure by paying all past-due amounts plus late charges and Seller's reasonable costs.

9.3 RHODE ISLAND REMEDY — EQUITABLE MORTGAGE; FORECLOSURE WHERE BUYER HAS EQUITY. The Parties acknowledge that Rhode Island has no land-contract forfeiture statute and that:
a. Where Buyer has acquired substantial Equity and has substantially performed, Rhode Island equity disfavors forfeiture of a vested interest, and a court may treat this Contract as an equitable mortgage, requiring Seller to proceed by foreclosure under R.I. Gen. Laws § 34-27-1 et seq. and affording Buyer an equity of redemption (the right to pay the amount due and retain the Property).
b. Where Buyer's Equity is minimal, little has been paid, and the default is willful, a court may enforce the Contract's termination/forfeiture terms and Seller may pursue possession.
c. A court weighs the amount of Buyer's Equity, the length and willfulness of the default, improvements made, and maintenance, in deciding whether to relieve against forfeiture.

9.4 Forfeiture (Use With Caution). [OPTIONAL] If permitted under Section 9.3(b), Seller may declare this Contract terminated and retain payments made as liquidated damages and reasonable rental value; however, the Parties acknowledge a Rhode Island court may relieve against forfeiture and require a foreclosure-type proceeding where Buyer has Equity.

9.5 Cumulative Remedies; Attorneys' Fees. Remedies are cumulative to the extent permitted by law. The prevailing Party in any enforcement action is entitled to reasonable attorneys' fees and costs.

10. TITLE; MARKETABILITY; TITLE INSURANCE

10.1 Marketable Title at Payoff. At Final Closing, Seller shall convey marketable, insurable fee simple title subject only to the Permitted Exceptions.

10.2 Title Insurance. [SELECT: Seller / Buyer] shall provide, at [ITS] expense, a title insurance commitment and an owner's policy issued to Buyer at Final Closing.

10.3 Seller's Existing Liens. Seller represents the Property is encumbered only by: [LIST or "none"]. Seller shall not allow any superior lien to go into default.

11. RISK OF LOSS; CONDEMNATION

11.1 Risk of Loss. From the possession date, risk of loss passes to Buyer. Insurance proceeds shall be applied, at Buyer's election and subject to Seller's security interest, to restoration or to the Unpaid Balance.

11.2 Condemnation. Any condemnation award shall be applied first to the Unpaid Balance, with the balance to Buyer, unless the Parties agree to restoration.

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

12.1 Assignment by Buyer. Buyer may not assign this Contract without Seller's prior written consent, which shall not be unreasonably withheld.

12.2 Assignment by Seller. Seller may assign its rights to payment subject to Buyer's rights hereunder.

12.3 Due-on-Sale Warning (Garn–St. Germain). If the Property is subject to an existing mortgage, entering into this Contract may trigger a "due-on-sale" clause permitting the lender to accelerate under the federal Garn–St. Germain Depository Institutions Act (12 U.S.C. § 1701j-3). Seller represents that [SELECT: there is no underlying loan / the lender has consented / Buyer assumes this risk]. Seller shall apply Buyer's payments to keep any underlying loan current.

13. DISCLOSURES (LEAD-BASED PAINT; PROPERTY CONDITION)

13.1 Lead-Based Paint (Pre-1978 Housing). If the dwelling was built before 1978, federal law (42 U.S.C. § 4852d) requires Seller to disclose known lead-based paint and hazards, provide available records, deliver the EPA pamphlet "Protect Your Family From Lead in Your Home," and allow Buyer a 10-day inspection opportunity. Rhode Island also imposes lead-hazard obligations under R.I. Gen. Laws § 42-128.1 et seq. See Exhibit D. ☐ Not applicable (built 1978 or later).

13.2 Property Condition Disclosure. Seller has delivered the Real Estate Disclosure form required by the Rhode Island Real Estate Sales Disclosures Act (R.I. Gen. Laws § 5-20.8-1 et seq.), unless an exemption applies.

13.3 Inspection. Buyer [SELECT: has inspected / has [____] days to inspect] the Property, including any radon testing, and accepts it subject to such inspection.

14. GENERAL PROVISIONS

14.1 Governing Law. This Contract is governed by the laws of the State of Rhode Island.

14.2 Forum. Exclusive venue lies in the Superior Court for [COUNTY] County, Rhode Island.

14.3 Notices. Notices shall be in writing and delivered by hand, certified mail (return receipt requested), or nationally recognized overnight courier to the addresses in Section 1.

14.4 Time of the Essence. Time is of the essence as to all payment obligations, subject to the notice and cure rights and the equitable rule in Section 9.

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

14.6 Severability. If any provision is held invalid, the remainder shall remain enforceable.

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

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

15. EXECUTION; NOTARIAL ACKNOWLEDGMENT

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

SELLER:
________________________________________
[SELLER NAME]
Date: [__/__/____]

BUYER:
________________________________________
[BUYER NAME]
Date: [__/__/____]

Notary Acknowledgment

STATE OF RHODE ISLAND
COUNTY OF [____________]

In [CITY/TOWN], on this [____] day of [MONTH], [YEAR], before me personally appeared [NAME(S)], to me known and known by me to be the party/parties executing the foregoing instrument, and acknowledged said instrument to be their free act and deed.

________________________________________
Notary Public, State of Rhode Island
My Commission Expires: ___________
[SEAL]

16. EXHIBITS AND SCHEDULES

• Exhibit A – Legal Description of the Property
• Exhibit B – Permitted Exceptions
• Exhibit C – Memorandum of Installment Land Contract (for recording under R.I. Gen. Laws § 34-11-1)
• Exhibit D – Lead-Based Paint Disclosure (pre-1978 housing)
• Exhibit E – Rhode Island Real Estate Disclosure Form (R.I. Gen. Laws § 5-20.8)
• Schedule 1 – Amortization Schedule

Sources and References

• R.I. Gen. Laws § 34-11-1 (conveyances in writing and recorded) — https://law.justia.com/codes/rhode-island/title-34/chapter-34-11/section-34-11-1/
• R.I. Gen. Laws Chapter 34-13 (recording in land evidence records) — http://webserver.rilegislature.gov/Statutes/TITLE34/34-13/INDEX.htm
• R.I. Gen. Laws § 34-27-1 et seq. (mortgage foreclosure; equity of redemption) — http://webserver.rilegislature.gov/Statutes/TITLE34/34-27/INDEX.htm
• R.I. Gen. Laws § 5-20.8-1 et seq. (Real Estate Sales Disclosures Act) — http://webserver.rilegislature.gov/Statutes/TITLE5/5-20.8/INDEX.htm
• Garn–St. Germain Act, 12 U.S.C. § 1701j-3 — https://www.law.cornell.edu/uscode/text/12/1701j-3
• Lead-Based Paint, 42 U.S.C. § 4852d — https://www.law.cornell.edu/uscode/text/42/4852d