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We are considering selling a group of rental properties, and it's likely we
will use a land contract (hold paper). Even though we will be insisting
that the new owners adequately insure the properties for the course of the
Agreement, are liabilities truly viewed under the law as the responsibility
of the new owners? That is, if they bought the properties via a bank loan,
the bank is not viewed as the interim owner until the loan is paid off?
I realize one downside is that if the new owners default on the loan, we'd
get the properties back (even though we may not particularly want them
back). Also we will continue to pay property taxes and buyer will have to
reimburse us.
One reason I ask is that we sold a house once, the party defaulted, and the
Water Company held us liable for $700 in back water bills incurred while the
buyer occupied the home. I assume because the county has no record of land
contracts and goes stricltly on who's name is on the deed (..which would
not change until the end of the land contract Agreement).
Advise & thanks.
MB
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