In Ohio, a land contract (contract for deed) is:
Question & Answer
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Prohibited
Land contracts are not prohibited in Ohio; they are explicitly recognized and regulated under Ohio Revised Code Chapter 5313, which even provides specific consumer protections for buyers regarding forfeiture and redemption rights.
A form of seller financing where buyer gets equitable title
The same as a mortgage
A land contract is fundamentally different from a mortgage: in a mortgage, the buyer holds full legal title and grants the lender a lien, whereas in a land contract the seller retains legal title until full payment, making the security mechanism and title structure entirely distinct.
Only for commercial properties
Ohio law places no restriction limiting land contracts to commercial properties; they are widely used in residential transactions, particularly in situations where buyers cannot secure conventional bank financing.
Why is this correct?
Answer B is correct because Ohio Revised Code § 5313.01 expressly recognizes land contracts as a valid form of seller financing in which the vendee acquires equitable title and the right of possession while the vendor retains legal title as security for payment. This dual-title structure is the defining legal characteristic that distinguishes a land contract from a traditional mortgage transaction and from an outright sale.
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