Can I walk away from my Michigan land contract?

[plys]

My husband entered into a land contract in 2005 for $52K in Flint, Michigan. The taxable value is now $26K (per city of Flint website), but the sellable value in our neighborhood puts it at about $10k-$15K.

Because of the crime moving steadily into our neighborhood, and the fact that we are now starting a family, we are planning to leave Flint as soon as we can.

We have been in good standing with our seller (his great-Aunt), never missed a payment, etc. One thing I know for sure is that the payments have never been reported on his credit, though I'm not sure he even requested that. Regardless, we don't care about that. We'd just like to move.

We have done an incredible amount of repairs and other things to make the house much nicer than it was when he purchased it.

Here is the clause in the LC that I think applies here: "REMEDIES: It is understood and agreed upon the parties that time is of the essence of this contract and in case Purchaser shall fail to make any of the payments above required or shall fail to keep any other agreement herein contained within thirty days after receipt Purchaser is in default (other than for the payment of money for which no notice is required), then Seller, at Seller's option shall have the following rights:

In the event of foreclosure or termination by law in accordance with the State of Michigan, all rights and interest created or then existing in favor of Purchaser as against Seller hereunder shall thereupon cease and all other rights acquired by Purchaser hereunder, shall revert to and revest in Seller without any act of re-entry or any other act of Seller to be performed, and without any right of Purchaser of return, reclamation or compensation for monies paid on account of the purchase of said property, and such payments therefore made under this contract are to be retained by and belong to Seller as the agreed and liquidated damages, and Seller in the case of such termination shall have the right immediately, or at any time thereafter to take possession othereof, together with all improvements and appurtenances thereon or thereto belonging. The remedies accorded Seller hereunder and cumulative and concurrent and shall be in addition to any other rights or remedies permitted by law or equity. Seller, or Seller's assigns, shall hav ethe right to enforece one or more remedies hereunder, successively or concurrently and such action shall not operate or estop or prevent Seller or Seller's assigns from pursuing any further or other remedy hereunder or which is permitted by law or equity."

We do not want to default on payments just to get out. Is our best option to simply talk to her about finding someone else to take over our land contract? Is it right to assume this does not affect our credit because it was never reported? We would never just leave her hanging.

[weiford]

Instead of asking here, you should be having this conversation with the aunt. Even though you say you don't want to leave her hanging, you are intent on moving because of the crime, so in a sense you would be leaving her hanging if she cannot find either a renter to take over the property or another who would want to buy it on a land contract. I mean, it doesn't sound like you intend to stay there, and I am sure you wouldn't keep paying if you move away.

Inform the aunt of your plans and see if you can come to an agreement.

And, no, the payments aren't showing on his credit, but, if you were to default, the aunt would have every right to take you to small claims and sue. If she won, that judgment would be on your credit and negatively impact it.

[curadhan74]

Your BEST option is to come to some sort of mutual agreement with the seller where you and the seller terminate the existing contract and go your merry ways.

As far as that Remedies clause is concerned, what that says is that you do NOT get any reimbursement for the past payments, or improvements, you have already made. In some states, that type of remedy is NOT enforceable. But if the home is only worth about $15K anyway, it's an issue that's hardly worth litigating.

[abisha]

do not fix up a house till it is in your name.

a land contract is an option, it is not an obligation
Check with the agreement. I am 99% sure you can walk from it
by giving the seller a 30 day notice; however,
if you put down a deposit of any sort, he will be able to keep it
because of "damages" to him.

YOU can find a replacement.

Also, you said drugs are moving into your neighborhood.

one way to stop that is to put up CAMS operated by
computers--have each home put up 4, one on each side of their home. IF each home owner will do that, the druggies will
be caught quickly or will just move their biz elsewhere.

when our drug dealing neighbor moved away, all drug
buyers stopped coming.