What to do if I’m in a land contract and the owner is responsible for the property taxes but he has not been paying them?

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What to do if I’m in a land contract and the owner is responsible for the property taxes but he has not been paying them?

The contract states that he is to pay them. What happens if the home goes into foreclosure because of the deliquent property taxes? I heard that if there is a land contract the buyers will gain possession of the deed but I can’t find any proof of this being true.

Asked on January 31, 2013 under Business Law, Michigan

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

No, the buyer does not automatically gain possession when there is a land contract, though you may be able to redeem the land, such as at the foreclosure sale. If the seller is violating the terms of the contract by not paying taxes, you have several possible different recourses: 1)  to  treat the contract as terminated due to the seller's material breach and also sue to recover the  money you have paid to date; 2) to not treat the contract as terminated at this time, but at some later date (such as if foreclosure occurs) to sue for  compensation; 3) to seek a court order directing  the seller to honor the contractual  obligations and make payments. You should consult with a real estate attorney to discuss the situation and your alternatives.


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