Does a Buyer in Default on a Contract for Deed Have a Right to Get Back Payments Already Made?

Full question:

Have been leasing a property for 15 years . Was told by the court 5 years ago that I had to purchase the property. Just was able to come up with the money, so was charged 5 years of interest. What about my 5 years of payments? Aren't i entitled to them back ?

• Category: Contract for Deed
• Date: 04/07/2025
• State: Pennsylvania

Answer:

The answer will be determined according to the terms of your agreement with the property owner and what the court order says regarding the amount to be paid. If you had a contract for deed, if the buyer defaults on payments in a typical contract for deed, the seller may cancel the contract, resume possession of the property, and keep previous installments paid by the buyer as liquidated damages.

A contract for deed, or land contract, is often used as an alternative means of financing the purchase price of property. The buyer does not receive an actual deed until payments are made under the terms of the contract for deed agreement. Until the buyer receives a deed, ownership isn't transferred and the property is subject to being foreclosed on if the mortgagee/owner defaults on the mortgage. The responsibility for payment for the property is a separate issue from the ownership of the property. Payments may be negotiated betwen buyer and seller, however, until the deed is transferred, the titled owner will remain ultimately liable for taxes. However, property taxes may be included as part of the rent in negotiations.