Contract for Deed, buyer has judgments-Problem?

I sold a place on Contract for Deed (Land Contract), and have found the buyer has judgments. Once I record the CD and his name’s on the title, will those judgments stick on the property? Would they complicate the process for him getting a loan later? What if I have to declare it in default and cancel it? I’d hate to have to pay off someone else’s judgments to clear my title.

His creditors can lien the property if they find out about it. However, your first mortgage is a senior lien, which means you get 100% before the creditor gets 1 penny.

In many states, a recorded judgment automatically creates a lien on real estate already owned or real estate that may be acquired. When your buyer gets title to the property in his own name, the lien may automatically attach.

If your buyer is using financing to satisfy your contract, then the lender will require their loan to be in first position. Any existing judgments will have to be paid as a condition of settlement. Your buyer will have to bring extra money to the settlement table to satisfy his judgments.

If the judgments have not expired or have not been settled when your buyer resells the property the liens will either be paid from the proceeds of the sale or the seller will have to bring money to the settlement table so he can deliver clear title.


Is there some particular reason you are recording the Contract for Deed, as basically it is used as an instrument, to hold the deed in the your name until the buyer re-finances the property. Thus no deed is recorded in the buyers name until the buyer fulfills the terms of the CFD.

As a matter of fact I have sold properties using a CFD with full knowledge that the buyer had some financial problems and he was told that they would have to be taken care of before the deed would be allowed to tranfer to his name.

John $Cash$ Locke