I sold my home last August with owner financing as a contract for deed. Aside from the fist payment, every payment since then has been late. They typically make the payment due on the 1st of the month around the 28th or 29th of the month. I'm not sure what to do. Per the contract we are required to give them an initial late notice stating that they have 15 days to pay and then if they don't pay we send them a pay or vacate notice giving them an additional 15 days to pay. Well they take advantage of this and wait until the very last minute to make the monthly payment, but of course by the time they make the payment for the month that is overdue it times for the next month's payment and then they don't pay and we go through the same thing over again. I'm at my wit's end and don't know what to do. Since they continuously make late payments is there anything I can do to evict them? Or am I forced to wait for payments per the required notices?

You need the read your contract. It depends on what the contract says. Did you write late charges into the contract? Are you charging interest on the financing?

If they do pay every month and are just one month behind, just figure you will get it at the end of the contract.

The contract was done through a third party who charges interest and a late fee. My problem is that I don't want to have to keep dealing with late payments every month. Is there anything I can do to get them out since they continuously pay late? The whole purpose of us selling our home like this was because we were too far "underwater" to sell it with a regular sale and would have owed too much money. We need to buy a larger home because of the kids, but as long as the "buyers" of our old house (through the contract for deed) continue to pay late, we will not be able to list it as additional income so that we can move on and get a loan for a new home. In addition, the last thing I want to have to deal with is continuous late payment for the next couple of years.

Does anyone have any ideas on what can be done if they keep making late payments every month or am I just stuck and forced to wait until they are so far behind that they can't keep up with the late payment notices (i.e. 2 to 3 months behind in payments) so that I can file for eviction?

Again, this all depends on what the contract says. I would advise bringing it to a real estate attorney who can tell you what options you have.

The contract will detail what constitutes a breach and if paying like they do does not constitute a breach then you are stuck.

I'm curious about this third party. Sounds like they are servicing the contract and collecting interest and the late fee, so what do you get out of it? Are the buyers paying the late fees? If they are choosing to pay more then pay on time, its more likely there is no breach. Also is the third party sending out the notices?

And why can't you list it as additional income. You are still getting paid every month, right? And, starting with the new year, you can expect 12 monthly payments, right? So what's the problem there? I think you are looking at this the wrong way. It sounds to me like you are getting a monthly check. It no longer matters that they missed the second payment. They will have to make it up at the end of the contract. But you are getting a payment every month. So what if its legally and officially late? That's their problem because its costing them extra money in interest and late fees. Its not your problem In my opinion if you are getting a check every month.

Now, if they miss another payment, then depending, on the terms of the contract, you may be able to declare them in breach, which usually means the contract reverts to a rental lease. And they forfeit whatever they have already paid. You can then give them a pay or quit notice which means paying whatever they owe, including that first missed month.

First get the word EVICT out of the thought, they are the buyers of the house, and you can not evict them till you are the owner of the home without a contract.

You would first have to find them in default of the contract, and declare the contract void because of their defualt, then they are renters and you can evict.

You say this is done though a "third party" what type of third party, and how much in late fees do you get every month, remember the late fees are where you really make extra money.

Also you sure gave them a lot of notices and time to be late before you can do anything, All of my contracts have them late in 5 days, and in default in 15.

If you allowed them this much time in the contract, then that is what they can do for the next >>>> many years that they are in the contract.

Is there no clause that if they are late.. X number of times they can be in default or something ?

But you may well be stuck with this if you wrote a very liberal agreement, did someone representing the buyer write this up ?

Have you thought about selling your note? I would be interested in talking to you about some options. Send me an email if you're interested in talking.

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