Agreement for Deed
Definition:
An Agreement for Deed is a legal contract between a buyer and a seller in which the seller finances the sale of property and retains legal title until the buyer has made all agreed payments. Also known as a land contract or contract for deed, it allows the buyer to take possession and use the property while paying over time. Once the full purchase price is paid, the seller transfers the title to the buyer through a deed. This type of arrangement is often used when traditional mortgage financing is not available or desirable.
Agreement for Deed Information
An Agreement for Deed outlines the purchase price, payment schedule, interest rate, and conditions for transferring title. It provides a way for buyers to build equity while making installment payments directly to the seller. The buyer typically assumes responsibility for taxes, insurance, and maintenance during the payment term. Because the seller holds legal title until the final payment, the buyer’s interest is considered equitable rather than legal ownership. The agreement should be recorded to protect the buyer’s interest and ensure transparency in the transaction.
Florida Legal Definition
In Florida, an Agreement for Deed is recognized as a form of installment land sale contract governed by general contract and real property laws. While not specifically codified, it is subject to principles outlined in Chapter 697 of the Florida Statutes concerning conveyances and security interests. The buyer gains equitable title upon signing the agreement and making payments, while the seller retains legal title as security. Florida courts treat these agreements similarly to mortgages, meaning the seller must often follow foreclosure procedures if the buyer defaults. Recording the agreement is recommended to protect both parties’ rights.
How It’s Used in Practice
In practice, an Agreement for Deed is often used in owner-financed real estate transactions, especially when buyers cannot qualify for traditional loans. The seller acts as the lender, receiving regular payments until the purchase price is paid in full. Real estate attorneys draft the agreement to define the parties’ rights, default remedies, and transfer procedures. If the buyer defaults, the seller may pursue cancellation or foreclosure depending on the terms. Once payments are complete, the seller delivers a deed to the buyer, transferring full legal ownership of the property.
Key Takeaways
- An Agreement for Deed allows a buyer to purchase property through installment payments directly to the seller.
- The seller retains legal title until the buyer completes all payments.
- In Florida, these agreements are treated similarly to mortgages and may require foreclosure upon default.
- The buyer gains equitable title and typically assumes taxes, insurance, and maintenance responsibilities.
- Recording the agreement protects both parties and ensures public notice of the transaction.
Disclaimer: The information and opinions provided are for general educational, informational or entertainment purposes only and should not be construed as legal advice or a substitute for consultation with a qualified attorney. Any information that you read does not create an attorney–client relationship with Barnes Walker, Goethe, Perron & Shea, PLLC, or any of its attorneys. Because laws, regulations, and court interpretations may change over time, the definitions and explanations provided here may not reflect the most current legal standards. The application of law varies depending on your particular facts and jurisdiction. For advice regarding your specific situation, please contact one of our Florida attorneys for personalized guidance.
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