Legal Question in Real Estate Law in Illinois

There is nothing illegal about it. It is not clear if this is something you are wanting to do, or not. In any event, you should speak with a real estate attorney in your area to review your contract, and ensure that there are no other liens which would affect you in the future.

No issue with doing this if it makes sense. Protect your interests by having an attorney (1) document the satisfaction of the contract terms; and (2) obtain an update to the title insurance you received at the front of the deal (to assure that there is not anything else unsatisfactory that has hit the records).

I agree with Mr. Moens and Repay: have an attorney review your contract, as none of us can give you a firm answer without that! That being said, most CFDs require the contract buyer to pay the taxes; sounds like your contract made you deposit the tax funds with your friend as contract seller, and in turn he was supposed to make the tax payments. Sounds like he didn't. That would be a breach of contract on his part. The only way this makes sense, then, is if the balance you owe on the contract is AT LEAST equal to $10K PLUS the amount of unpaid taxes (plus interest and penalties, if any) that he didn't pay if the above is true AND you can afford to both pay the taxes and a lump sum of $10K all at once. It is not a complete cure of his breach because you were supposed to be able to pay in installments that presumably were affordable to you, and now you'd have to come up with a lump sum. But if the lump sum as I say results in a discount on the price, then it may be worth it. BUT, when a deed is handed over on a CFD, the contract usually also requires the seller to pay state and locate transfer taxes; local transfer taxes, if any, may be your responsibility. So again, see an attorney to find out exactly what the amounts will be. You should try to make him pay for your attorney since it was his breach. And frankly I would have the attorney handle the closing too - getting the documents in proper order is more than just getting a "deed" today. If you can't afford the lump sum, however, there may be other ways of working that out, such as a contract modification that could adjust the economics, but without an attorney this would be a big risk.