Posted by WDMD on 8/3/09 5:29pm
Msg #298524

Question for LA folks

Came across a Bond for Deed today. Never saw one before, was wondering if someone could tell me about them. Thanks.

Reply by MarcyLA on 8/3/09 6:00pm
Msg #298536

Simply stated: It's a contract to buy in the future based on certain agreements between parties. It's a way for seller to retain ownership in the event of default by buyer...no foreclosure necessary as with owner financing. Title is delivered to buyer upon full payment of purchase prise. (Buyer is usually in possession of property.) Usually a down payment then monthly payments, but all terms are negotiable. I'm not an attorney, so this is not legal advice, etc...

Reply by WDMD on 8/3/09 6:27pm
Msg #298544

Interesting...Thanks for the response n/m

Reply by Linda Juenger on 8/3/09 7:11pm
Msg #298551

Re: Interesting...Thanks for the response

I am currently selling a piece of property Bond for Deed. It has been almost 5 years since we started this with the buyer. He cannot get a loan on the property because the ground was contaminated with gasoline. We have cleaned up the property and am currently waiting from the State of IL to release the property as no further remediation needed. Once that is done, the buyer can get a loan to pay the balance to us. A portion of his monthly payment goes towards ownership is the way our contract is drawn. If he defaults and quits paying us, then the contract is null and void and no money is returned to him no matter how much is paid to us. We keep ownership. No title will be transferred until the balance is paid in full to us.

Reply by JanetLA on 8/3/09 8:29pm
Msg #298567

Just adding to what has been said...

As a general rule, Louisiana does not recognize a conditional sale contract. Such a sale would be one whereby the seller retains title to the property until the buyer has paid for it. Other states recognize such a sale. However, Louisiana does have a procedure, called a Bond for Deed, whereby we can utilize the advantages of a delayed transfer of ownership until the property is paid for in full or paid down to an agreed upon level.

The provisions for a Bond for Deed is found at LRS 9:2941, et seq. The bond for deed is defined as being a contract to sell real property, in which the purchase price is to be paid by the buyer to the seller in installments and in which the seller, after payments of a stipulated sum, agrees to deliver title to the buyer.

Reply by PAW on 8/3/09 8:44pm
Msg #298568

Re: Just adding to what has been said...

Florida has a similar method, called "Contract for Deed":

A Contract for Deed/Land Contract is a contract between a seller and buyer of real property, where the seller provides the financing. The seller retains the legal title to the property while permitting the buyer to take possession of the property. When the buyer has paid the full purchase price plus any interest back to the seller, the buyer receives the legal title to the property.