In a contract for deed (also called a land contract), who holds legal title to the property until the purchase price is paid in full?
Correct Answer
B) The seller retains legal title until the buyer completes all payments
In a contract for deed (land contract), the seller retains legal title to the property while the buyer takes possession and makes installment payments. The seller transfers legal title to the buyer only after the full purchase price has been paid. This arrangement is sometimes used in Idaho when traditional financing is unavailable, but it carries risk for the buyer since they hold only equitable title during the payment period.
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Related Topics & Key Terms
Related Topics:
Key Terms:
Related Concepts
Novation is the substitution of a new contract for an existing one, or the replacement of one party with a new party, with the consent of all parties involved. The original party is completely released from all obligations.
Offer and acceptance is the process by which one party proposes specific terms for a contract and the other party agrees to those exact terms, creating mutual assent. This mutual agreement, also called a meeting of the minds, is an essential element of every valid contract.
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
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