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Can we walk from a land contract if certain info was not disclosed?

East Lansing, MI |

We got a land contract in 2005 for what we thought was a manufactured home, after we signed the papers and moved in, we found out it was a trailer added on to. And it was built over the septic tank. We didnt know this until the previous owner visited, also it was advertised as having a 2 year old roof , come to find out it was a roof with 4 layers of shingles that had molded and warped plywood , we had to do a complete rip off to fix it, long story short our contract is up march 2015, with all we learned , can we just walk away because it was falsely advertised, im sure the county can condem it for the septic.

Attorney Answers 3


  1. Best answer

    From your statements of the facts it is clear that there were misrepresentations. You mentioned that you found out about some of these issues when the prior owner visited but you did not indicate the timeline for this in the context of owning it from 2005 until now. Much of this problem could have been avoided if you had a home inspection made before closing on the property. However your question implies that you are willing to walk away. If that is the question, you can stop paying leaving the vendor two choices. One is for the seller to start a land contract forfeiture action. You will be served a notice of forfeiture and the court will determine how far behind you are and require that amount plus subsequently due amounts to be paid within 90 days (assuming you own more than half the original amount or within 189 days if less than 50% remains to be paid. If you pay nothing, the seller gets title free of the land contract and you can either move out or be moved out. The second approach is that the seller can seek to foreclose the contract which means that the balance due is accelerated and a sale occurs after 6 months from when you get sued and then you have another 6 months to pay up the accelerated balance or the seller gets title. The issue in this second method is that the seller does not have to bid the full amount and after crediting the bid amount can seek to hold you responsible for the balance. I suggest you consult an attorney and see if you can raise the fraud claims against the seller and see if he will accept a deed in lieu of foreclosure. You will need to consult an attorney and let the attorney deal with the seller.

    Donald B. Lawrence, Jr. (P16463)* THE HUBBARD LAW FIRM, P.C.* DID 517-886-7115 Fax: 517-886-7129 Email: dlawrence@hubbardlaw.com The information provided does not constitute legal advice and no attorney client relationship exists based upon this response. Unless specifically noted to the contrary, information refers to Michigan law. Prior to taking action, you should consult directly with an attorney for specific advice based on a full factual disclosure about your own legal situation. This information is provided for your personal use and may be reproduced for non-commercial distribution. All copies must include the following copyright notice: Copyright © 2011 THE HUBBARD LAW FIRM, P.C. THE HUBBARD LAW FIRM, P.C.* 5801 W. Michigan Avenue, Lansing, MI 48917 Phone: 517-886-7176; Fax: 517-886-1080 *AV Peer Rated, Martindale-Hubbell® Please consider the environment before printing this response


  2. Given the fact that you have occupied the property for eight years, rescinding the purchase isn't a likely outcome. You need to take the contract as well as all evidence of fraud by the vendor to a real estate attorney for review of your situation. The correct strategy will be affected by the current market value of the property and the amount owing on the contract. You should also contact the local building department/zoning official to determine if a certificate of occupancy has ever been issued and whether the septic tank has been inspected/approved. Be sure to have this information to give to the attorney during your initial conference.

    You haven't identified the other parties involved in this question so I cannot determine whether I may have a conflict in this matter. Should it turn out that I have an attorney-client relationship with any of the other parties, my response to this question will not prevent me from continuing to represent an existing client.


  3. I agree with Mr. Smith. Your answer is in your contract. Having said that, there is generally little standing between you and walking away. You would forfeit any equity you have earned in the property and any improvements would belong to the owner. You may be able to negotiate a cash for keys deal with them, but they have less incentive to do so than if this were a mortgage.

    I would have an attorney review your contract to make sure there are no hidden "gotchas" in the terms.

    James Frederick

    ***Please be sure to mark if you find the answer "helpful" or a "best" answer. Thank you! I hope this helps. ***************************************** LEGAL DISCLAIMER I am licensed to practice law in the State of Michigan and have offices in Wayne and Ingham Counties. My practice is focused in the areas of estate planning and probate administration. I am ethically required to state that the above answer does not create an attorney/client relationship. These responses should be considered general legal education and are intended to provide general information about the question asked. Frequently, the question does not include important facts that, if known, could significantly change the answer. Information provided on this site should not be used as a substitute for competent legal advice from a licensed attorney that practices in your state. The law changes frequently and varies from state to state. If I refer to your state's laws, you should not rely on what I say; I just did a quick Internet search and found something that looked relevant that I hoped you would find helpful. You should verify and confirm any information provided with an attorney licensed in your state. I hope you our answer helpful!