Hello,

I do not know anything about Land Contracts, so my question is: If a Land Contract is made between myself (buyer) and the owner (seller), is the seller legally responsible (in the state of Michigan) to record/register the Land Contract? If they don't record/register it, how will that affect me? Will I be able to claim the taxes I pay on my income tax return? Will I be able to get the "1st time buyer" tax credit?
The seller told me that they do not have to record the Land Contract. Is that true?

Thank you in advance to whomever responds to my multiple question.

In all situations it is best that the land contract be recorded. This protects you, the buyer. The owner of the real estate is supposed to pay the property taxes as they are still the owner.

Does your land contract stipulate that you are to pay the yearly taxes on the property as well?

Was this land contract drawn up by an attorney or just the land owner and you?

I'd insist that the seller immediately record the land contract.

Hello N:

If the seller has a mortgage, and he records the contract, the lender MAY call his loan. That may be why he doesn't want to record it....

But, moreover, I think you need to understand exactly what a land contract IS, and I don't think you do... Under a land contract, You are NOT the owner of the property. You are only contracting to BE the owner sometime in the future if you meet the obligations under the contract...

So, no. You can't deduct the interest because you're not paying interest. No, you can't get the first time buyers credit because you're not BUYING. You're only contracting to buy sometime in the future.

Hopefully, you haven't entered into this contract without FULLY understanding what your rights and obligations are.

excon