In Illinois, a land contract (installment contract) requires:
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Title transfer at signing
Title transfer at signing is the opposite of how land contracts work — the entire purpose of a land contract is that the seller retains legal title until all payments are completed, with the buyer holding only equitable title during the payment period.
Recording to be valid
Recording is strongly recommended to protect the buyer's equitable interest against third parties and subsequent purchasers under the Illinois recording acts, but it is not required for the contract to be valid and enforceable between the buyer and seller themselves.
Written agreement describing terms
Bank approval
Bank approval is not required for a land contract because the entire premise of seller financing is that the seller acts as the lender, bypassing traditional institutional financing — there is no bank involved in a pure land contract transaction.
Why is this correct?
Under Illinois's Statute of Frauds (740 ILCS 80/2), a contract for the sale of real property — including a land contract — must be in writing and describe the essential terms of the agreement, including the parties, the property, the purchase price, and the payment terms, to be legally enforceable. The written agreement requirement is the foundational legal validity requirement, meaning an oral land contract is completely unenforceable in Illinois courts regardless of how long the buyer has been making payments. While recording under the Illinois Conveyances Act (765 ILCS 5/28 et seq.) protects the buyer's equitable interest against subsequent purchasers and lien creditors, failure to record does not void the contract between the original parties.
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