Land Contract Buyer Sells Without Owner’s Consent – Real Deal #157

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Here is one seller’s request for answers when dealing with a sneaky delinquent buyer that sold without consent.


We sold on a land contract in 2008. We have not collected a payment for 4 months, however the vendee said he had a new buyer so we did not foreclose. The Land Contract stipulated that the vendee could not sell without owner consent. We consented provided certain conditions were met, such as all payments brought up to date prior to closing.

The vendee lied to us and closed with the new buyers without us signing anything, or giving written consent. He collected a down payment from the new buyers and did not pay us.

My thought is that the Assignment of Land Contract is not valid because he did not follow the terms of the original land contract. Am I correct? Can we foreclose on the contract and sue for breach of contract? Also can the new buyers file fraud charges against the vendee?

Posted by Leila V on April 13, 2010 at


Hello Leila,

I feel your pain on delinquent buyers. Unfortunately it is a common sign of the times and owner financing is not immune.

From a legal point of view, you would need to talk with an attorney on your options. My experience is that the attorney will ask to see the documents. If the consent was not in writing or came with verbal conditions it will likely come down to a “he said – she said” between the prior buyer and you as the seller.

However, if the land contract is delinquent on the payments there should still be the right to start foreclosure procedures outside of the consent issue.

The bottom line is, “You pay you stay – You don’t, you won’t!”

Now for the flip side…

From a practical point of view, you now have a new buyer that will hopefully make payments on time. A foreclosure proceeding can take months and even years if the buyer files bankruptcy. In addition to your valuable time it also takes hard earned money to pay an attorney to handle the foreclosure, with most attorneys looking for some payment upfront.

It might be to your benefit to cut your losses with the old buyer and try to find a way to work with the new buyer. While you might be out 4 payments today, they would eventually be collected in the future as the principal balance is only reduced when the payments are made.

There are also advantages to having someone living in the property, paying taxes, and keeping insurance current.

Hopefully in your situation it will be out with the old and in with the new!

Tracy Z. Rewey at

Disclaimer: Sorry for the “fine print” but must add that nothing in this article is meant to be legal, tax, or investment advice.  We encourage readers to seek out professional advice on individual situations.

About Tracy Z

Tracy combines her knowledge of cash flow notes with the power of marketing online to help grow your business! She can be reached at 1-888-999-7905 or at Exposure One Marketing.

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