A land contract is any agreement to make payments toward land or property in return for taking full ownership upon the completion of payments. Land contracts can only be dismissed by a court of law, and this occurs when the judge rules that the contract is legally insufficient or invalid. You don't necessarily have to go to court to get out of a land contract, however.
Review the Contract Terms
A well-written land contract should outline under what conditions you can terminate the agreement. For example, it might indicate that a buyer's failure to pay after 60 days nullifies the contract. If the contract covers the specific reason you wish to terminate, follow the procedures outlined in the contract. If you end up in court fighting over the contract, your conformity to the contract's terms increases the likelihood that the agreement will be dismissed.
Renegotiate the Contract
If your contract doesn't allow you to easily cancel it, try renegotiating with the other party. If you're willing to maintain some elements of the contract, the other side might be willing to revamp the contract to avoid protracted legal fights. For example, if you want to extend the time you have to pay for the land, try sending a formal proposal to the other side suggesting the specific terms you'd like to change.
If you can't renegotiate the contract, and your contract doesn't allow cancellations, you'll need to begin gathering evidence in case you sue or are sued. For example, if the other party violated the contract, collect documents to support this. If the contract contains illegal provisions, or the other party fraudulently induced you to sign the contract, you'll have to prove this in court.
File a Lawsuit
If you want the contract dismissed, you'll need to file for a declaratory judgment in which the judge clarifies each party's obligations and through which a contract may be dismissed. Sometimes filing a suit is sufficient to encourage the other party to engage in settlement negotiations. Otherwise, you'll need to prepare for trial by gathering evidence and witnesses. Contract law can be complicated, so it's unwise to go it alone. Instead, hire a lawyer who specializes in land disputes and contracts.
- Jupiterimages/Stockbyte/Getty Images
- Rules for Conventional Mortgages
- Can You Use FHA Financing on a Bank-Owned Property or a Foreclosure?
- Can Things Get Ruined in a Storage Building?
- Is it Cheaper to Turn a Porch Into a Sunroom or Enclose It?
- What Is MPR on an Appraisal?
- How to Create Cash Flow When Buying a Multi-Unit Apartment Building
- Tax Laws About Donating Clothing
- Can I Get a Paper Check From Paypal?
- What Is the Maximum Deduction Allowed Without Receipts for Donated Items?
- Bank Requirements to Get a Mortgage