Owner-Finance Land Contracts in Pennsylvania

Overview

Pennsylvania has a dedicated Installment Land Contract Law at 68 P.S. § 902 et seq., enacted to address abuses in residential installment sales. The statute imposes mandatory contents, recording obligations, default and cure procedures, and forfeiture limits on residential installment contracts. Vacant, unimproved land is generally outside the statute's reach.

Governing Law

The principal statutes are 68 P.S. § 902 through § 909 (Installment Land Contract Law) and 21 P.S. § 351 et seq. (Recording). Pennsylvania is a judicial-foreclosure state for mortgages (42 Pa.C.S. § 8103 and Pa.R.C.P. 1141 et seq.). The Statute of Frauds is at 33 P.S. § 1.

Recording the Buyer's Interest

For residential installment contracts under 68 P.S., recording at the county Recorder of Deeds is required (a 30-day window applies under standard practice). For vacant-land contracts, recording is permitted and strongly recommended.

Default and Cure Period

For residential installment contracts, 68 P.S. § 905 generally requires a 30-day notice and cure period before forfeiture or repossession. For vacant-land contracts outside the statute, the contract controls; most agreements provide 30 days.

Seller Remedies on Default

For residential contracts, 68 P.S. § 906 limits the seller's ability to forfeit when the buyer has paid 25% or more of the purchase price. In such cases, the seller must pursue a judicial foreclosure-style action. For vacant-land contracts outside the statute, the seller may pursue contractual forfeiture or judicial foreclosure.

Vacant Land vs. Residential

Pennsylvania's Installment Land Contract Law applies to residential dwellings, not vacant land.

Practical Notes for Sellers

Confirm the parcel is unimproved and outside the Installment Land Contract Law.
Record at closing.
Recognize that long-running contracts with substantial buyer equity may be treated as equitable mortgages.
Sellers contemplating residential installment contracts should treat 68 P.S. compliance as nonnegotiable.

Disclaimer

This page is a public-law summary for general informational purposes only. It is not legal advice. Owner-finance transactions are state-specific and fact-specific. Engage a licensed attorney in the parcel's state before drafting, signing, or recording any agreement.

The legal mechanics of a Pennsylvania deal.

Governing statute

high confidence

68 P.S. § 902 et seq.; 21 P.S. § 351 et seq.

Pennsylvania's Installment Land Contract Law applies primarily to installment contracts for property containing a dwelling. Vacant land is governed by general contract and real-property law.

Recording instrument

Installment land contract or memorandum

Filed at the Recorder of Deeds. Recording is required to perfect the buyer's interest in the chain of title.

Cure period

30 days (statutory)

68 P.S. § 905 generally requires a 30-day notice and cure for residential installment contracts.

Default remedy

Forfeiture or judicial foreclosure

For residential contracts, 68 P.S. § 906 limits forfeiture and may require a judicial action where the buyer has paid 25% or more.

Notable requirements

68 P.S. § 903 specifies mandatory contents for residential installment contracts
Recording of residential installment contracts within 30 days of execution

Prohibited or limited

Forfeiture of residential installment contracts limited where buyer has paid 25% or more

Vacant land vs. residential

Pennsylvania's Installment Land Contract Law applies primarily to residential dwellings. Vacant land outside the statute.

Pennsylvania