Contract for deed,
all 50 states.

A contract for deed (CFD) — also called a land contract, installment land contract, bond for title, or articles of agreement for deed depending on the state — is a real-estate sales contract under which the buyer takes possession and pays the seller in installments, with legal title passing only when the contract is fully performed. The buyer holds equitable title from day one; the seller holds bare legal title as security for the unpaid purchase price.

Functionally, a CFD is similar to a mortgage: the buyer makes monthly payments of principal and interest until the loan is paid, at which point the seller delivers a deed transferring legal title. The legal differences are subtle but consequential: in most states, a CFD seller can declare forfeiture and reclaim the property without going through judicial foreclosure, and the buyer's equitable interest is treated differently than a mortgagor's interest in tax, bankruptcy, and succession contexts.

Different states use different names for substantially the same instrument. Texas calls it an executory contract for conveyance. Illinois calls it articles of agreement for deed. Alabama and South Carolina use bond for title. Minnesota, Wisconsin, Indiana, Iowa, Michigan, and most other states use contract for deed or land contract. The terminology matters for searching the statute book; the underlying transaction is largely the same.

CFDs emerged because conventional financing didn't fit every transaction. Vacant land, manufactured homes, recreational parcels, and small starter homes in low-priced markets historically couldn't be financed through banks. The CFD was the workaround: the seller financed the sale themselves, retained legal title until paid, and could reclaim the property quickly on default.

In the 20th century, CFDs became a major tool in low-priced urban markets — Detroit, Chicago, Cleveland, Baltimore — where corner-lot bungalows and 2-flats traded for prices below conventional financing thresholds. The combination of low ticket sizes and high inventory turnover made CFDs the dominant financing structure in those markets, often through specialized investor-operators.

Modern CFD activity is driven by a mix of factors: investor portfolios buying tax-foreclosure inventory at scale, vacant-land transactions where banks won't lend, manufactured-home-on-land deals, and self-employed or credit-rebuilding buyers underserved by conventional underwriting. Total CFD volume in the US is meaningful — Detroit alone has tens of thousands of active CFDs at any given time.

Recording a CFD (or a memorandum of CFD) puts the buyer's interest in the public chain of title. Without recording, a subsequent bona-fide purchaser, judgment creditor, or senior lien holder may take priority over the buyer's interest. Recording is the buyer's primary protection against title-related risk.

Recording requirements vary by state. Texas requires recording within 30 days of execution under Property Code § 5.076 (homestead executory contracts). Minnesota's Minn Stat 559.21 contemplates recording but doesn't strictly require it. Ohio's ORC 5313 requires recording within 20 days of signing. Pennsylvania's 68 P.S. 901 requires recording for installment land contracts on residential property under $50,000.

Practical recording mechanics: most counties accept either the full contract or a memorandum that names the parties, describes the parcel, and references the contract's existence without disclosing financial terms. Memoranda are strongly preferred for privacy. Recording fees range from $25 to $200 depending on the county and document length; some states impose additional transfer taxes or affordable-housing surcharges.

When a buyer defaults, the seller's remedy depends on whether the state treats the CFD as a true forfeiture instrument or as an equitable mortgage requiring foreclosure. This is the single most important legal question in CFD practice.

Forfeiture states give the seller a fast, statute-driven remedy: notice of default, a cure period, and — if the buyer doesn't cure — termination of the contract, retention of payments, and recovery of possession. Arizona's graduated cure schedule (30 days for buyers who've paid less than 20%, scaling up to 9 months for buyers who've paid more than 50%) is a model. Minnesota's 60-day cancellation under Minn Stat 559.21 is another.

Equitable-mortgage states — California (Petersen v. Hartell), North Carolina (post-2009 NCGS 47H), Maryland, and several others — treat CFDs as functionally equivalent to mortgages once the buyer has paid substantial equity. The seller can't simply declare forfeiture; instead, the seller must judicially foreclose, sell the property, and apply proceeds to the debt, with any surplus returning to the buyer. This is slower and more expensive for the seller but fairer when the buyer has accumulated meaningful equity.

Operating practice in mixed states: the right structure is highly state-specific. In California, sophisticated operators typically use AITDs rather than CFDs to avoid equitable-mortgage doctrine. In Texas, post-2005 reforms (Property Code Chapter 5 §§ 5.062-5.085) imposed strict consumer protections on residential CFDs, pushing most operators to wrap notes secured by deeds of trust.

Modern CFD statutes impose disclosure, recording, and cure requirements designed to protect buyers from predatory structures. Texas Property Code § 5.069 requires the seller to provide a property-condition disclosure, financial information including the contract's annual percentage rate, and a clear notice of default and cure rights. Failure to comply can void the contract.

Other states have parallel frameworks. Illinois's 2018 Installment Sales Contract Act imposes 90-day cure periods and detailed disclosure requirements. Ohio's ORC 5313 requires the seller to provide an annual statement of payments and balance, plus mandatory cure periods after five years of performance or 20% paid. North Carolina's NCGS 47H imposes recording, written-disclosure, and right-to-cure obligations, with treble-damages remedies for violations.

Federal law overlays state requirements. The Dodd-Frank Loan Originator (LO) rules apply to most residential owner-financed transactions and require either a licensed RMLO or one of two narrow exemptions (one-deal-per-year for natural persons; three-deals-per-year for non-natural persons under specific conditions). The SAFE Act imposes parallel licensing requirements at the state level.

Failing to record the contract or memorandum. An unrecorded CFD is vulnerable to subsequent buyers, lenders, and judgment creditors. Recording costs less than $200 in most counties; not recording can cost the entire investment.

Using a CFD in an equitable-mortgage state without understanding the implications. California, Maryland, Maine, and Oklahoma routinely re-characterize CFDs as equitable mortgages. Operators who try to declare forfeiture in these states often discover too late that they need a judicial foreclosure with full due-process protections for the buyer.

Ignoring Dodd-Frank LO rules. Sellers who carry financing on residential properties at any meaningful volume need a licensed RMLO. Non-compliance can void the contract, expose the seller to penalties, and create class-action liability.

Not addressing the underlying mortgage. If the seller has an existing mortgage, the CFD likely triggers the due-on-sale clause. The Garn-St. Germain Act provides a few narrow exemptions; most CFD transactions don't fit them. Sophisticated structures use wrap notes with explicit lender notification or take the due-on-sale risk knowingly.

Skipping insurance and tax escrow. The buyer may stop paying insurance or property taxes. The seller — still holding legal title — gets the bill. Every well-drafted CFD includes insurance and tax escrow, with default consequences if the buyer fails to maintain them.

Petersen v. Hartell, 40 Cal.3d 102 (1985) — California Supreme Court case establishing the equitable-mortgage doctrine for installment land contracts. After Petersen, California sellers can rarely declare forfeiture against a buyer who has paid substantial equity; instead, they must judicially foreclose.

Skendzel v. Marshall, 261 Ind. 226, 301 N.E.2d 641 (1973) — Indiana Supreme Court case requiring foreclosure rather than forfeiture for CFDs under which the buyer has paid a significant portion of the purchase price. The 'Skendzel doctrine' is the controlling Indiana framework.

Sebastian v. Floyd, 585 S.W.2d 381 (Ky. 1979) — Kentucky Supreme Court case adopting an equitable-mortgage framework for installment land contracts, requiring foreclosure remedies when buyer equity is substantial.

Heikkila v. Carver, 416 N.W.2d 109 (Minn. 1987) — Minnesota Supreme Court case interpreting the cancellation procedure under Minn Stat 559.21, reinforcing the strict procedural requirements sellers must follow.

Pick your state below for the controlling statute, the recording rules, the default remedy, and the case law that shapes practice in your jurisdiction. Each state page includes a plain-English summary plus the citation you can give an attorney for verification.

If you're working on a specific deal — buyer or seller — send it to us. We've structured contracts in dozens of states and have the documents, attorneys, and statutory checklists to keep both sides protected.