Understanding Ohio Land Contracts

If you can avoid a land contract—avoid it. Land contracts may seem like a flexible alternative to traditional mortgages, especially for buyers who don’t qualify for conventional financing. But in Northeast Ohio, where these agreements are increasingly common, they come with significant legal risks for both buyers and sellers.

What Is a Land Contract?

A land contract—also known as a land installment contract— is a private agreement between a seller (often referred to as the “vendor”) and buyer (“vendee”) of real property where the seller essentially provides financing to the buyer, and the buyer repays the loan in installments. Unlike a traditional sale where the buyer gets the deed at closing, the seller retains legal title until the buyer pays off the full purchase price.

This arrangement can be helpful for buyers who don’t qualify for a mortgage, but it also means the buyer doesn’t fully own the property until the contract is completed.

Why Are Land Contracts Popular in Ohio?

Ohio ranks second in the country for land contract usage. They’re often used in lower-cost housing markets or when buyers need more flexible terms. But just because they’re common doesn’t mean they’re simple—both buyers and sellers face legal risks if the contract isn’t properly written or enforced.

Legal Requirements Under Ohio Law

To be valid, a land contract must meet the requirements of R.C. 5313.02, which outlines approximately sixteen specific elements, including:

  • Full names and addresses of both parties

  • Legal description of the property

  • Purchase price and payment terms

  • Interest rate and outstanding balance

  • Statement of encumbrances

  • Warranty deed provision

  • Recording the contract in the county where the property is located within 20 days

Failure to meet these requirements can render the contract unenforceable.

What Happens If the Buyer Defaults?

If a buyer misses payments, Ohio law provides a structured process:

  1. 30-Day Grace Period: The buyer has 30 days to catch up on missed payments.

  2. Notice of Forfeiture: If the default isn’t cured, the seller must serve a formal notice with specific legal language.

  3. Eviction or Foreclosure:

    • If the buyer has paid less than 5 years or less than 20% of the purchase price, the seller can file an eviction in municipal court.

    • If the buyer has paid more than 5 years or over 20%, the seller must file a foreclosure in common pleas court.

This distinction is critical and often misunderstood.

Land Contracts and Community Associations

In communities with leasing restrictions, land contracts typically do not violate community association rules because they are considered purchase agreements, not leases. It is also important to remember that since the seller remains the legal owner of the property while the land contract is in place the remain responsible for:

  • Paying association fees

  • Voting in association matters

  • Serving on the board

This can create confusion if not clearly addressed in the contract.

Conclusion

Whether you're considering entering into a land contract or dealing with a defaulting buyer, it’s essential to work with an experienced real estate attorney to ensure your rights are protected and the agreement complies with Ohio law.

📅 Ready to move forward? Schedule a paid consultation with Attorney Nicholas Weiss.
📞 Have more questions? Contact our office.

About the Author

Rachel Kuhn is a seasoned real estate and litigation attorney with over a decade of experience representing clients in property disputes, zoning issues, and nonprofit governance. She is committed to providing practical, client-focused legal solutions throughout Northeast Ohio.

This blog post is for informational purposes only and does not constitute legal advice. Reading this post does not create an attorney-client relationship. For personalized guidance, please consult with a licensed Ohio attorney.

Rachel Kuhn, Esq

Rachel is a Cleveland native with degrees from Miami University, Syracuse University, and Cleveland State University. With over a decade of experience in real estate law and litigation, she has represented clients in zoning, foreclosure, construction disputes, and nonprofit governance. Outside of work, Rachel is a lifelong figure skater, active in the U.S. Figure Skating Association, and lives on Cleveland’s West Side with her boyfriend and their three cats.

https://www.npweisslaw.com/our-team
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