Legal Question in Real Estate Law in Michigan

Is it legal to sell a home in Michigan on a land contract for less than what you owe on the mortgage?


Asked on 10/23/12, 1:25 pm

1 Answer from Attorneys

Brad Lambert Lambert & Lambert PLC

Yes, the State of Michigan has no statute that would bar such sales. Unfortunately, this simple answer does not apply to the terms of your Mortgage. The proposed land contract probably violates the "due on sale" clause in the Mortgage (that clause bars sales without the bank's permission). The Mortgagee will also probably be able to declare a default under the Mortgage for several other reasons, particularly if you cannot keep the Mortgage current due to the lower land contract amount. The impact of these contractual issues depends upon the terms of your Mortgage.

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Answered on 10/23/12, 1:34 pm


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