Contract for Deed, Free Form?

January 22, 2010 8:54 AM

Can I get a generic contract for deed form, for free, online? Ive googled, but everything is pay-only. I don't need a very complex one. South Dakota, if it matters. Even if someone could scan theirs and post it somewhere for me to copy, that would be great.
posted by yesster to Law & Government (4 answers total)

You should really talk to a real estate attorney. A contract for deed has a lot of pitfalls.

For example, the original owner is still liable for environmental problems under CERCLA and still liable to the public for things like attractive nuisances. To complete the contract you have to physically exchange the deed, which can be difficult if the other party or the deed can't be found. If the buyer takes out a loan he or she can't deduct the interest because there's no mortgage. It often results in more litigation than a normal sale.

There is basically no benefit, security-wise, to holding on to the title as opposed to a mortgage.

So, talk to a lawyer. You should be able to get a free consultation to discuss your options and how much they might cost. In all likelihood the few hundred dollars upfront to structure the deal soundly will more than make up for the potentially thousands of dollars in liability, headache, or litigation later on.
posted by jedicus at 10:06 AM on January 22, 2010 [1 favorite]

At least where I'm from , contracts for deed can create a lot of difficult problems. Contracts for deed are highly controversial in Texas, as they were widely abused to take advantage of Mexican and Central American immigrants who didn't understand the contracts (both because of language and because of differences in US and Mexican/Central American law). There have been several statutes passed by the Texas Legislature to restrict them.

I know that you're in S.D., but I just want to alert you that in some states contracts for deed are looked at with a jaundiced eye. I don't know if that's the case in S.D. But you're going to want to speak to a real estate attorney.
posted by seventyfour at 12:29 PM on January 22, 2010

Response by poster: Ok -- this is a deal with a family member who has been occupying my house for several years now. I don't live there. I want to set up a "contract for deed" in order to effectively let her take ownership of the house in a few years.

I don't have any concerns about abuse from either party in this. I just want to convert the rent she's already paying into a legitimate purchase of the house from me.
posted by yesster at 1:10 PM on January 22, 2010

Thanks for the followup. Nonetheless, a contract for deed still may not be the best way to go, especially depending on the law in your state. A free consultation with an attorney should suffice to figure out whether this is really what you want to do. I would be surprised if there was actually an advantage in this case to a contract for deed over a promissory note secured by a mortgage.
posted by jedicus at 2:31 PM on January 22, 2010