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Updated about 3 years ago on . Most recent reply

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12
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3
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Kerry Malarkey
  • Investor
  • Portland, OR
3
Votes |
12
Posts

Land Contract Seller Financing - Land Use restrictions

Kerry Malarkey
  • Investor
  • Portland, OR
Posted

I am looking at selling 14 acres of raw forested land in the state of Washington to a buyer using a 3 year installment with balloon payment. I need to spread the land purchase payments out over 3 years for tax reasons... ergo, why the installment contract and not a straight sale.

Couple of scenarios I'd like to protect myself from: 

1)  How do I protect against the buyer logging and selling the timber, which is worth quite a lot, which would reduce the value of the land?  Can I put a clause in the installment contract or the deed that it can't be cut/sold until the loan is paid off?  Or that the buyer would need prior permission and agreement from me?

Also, how can I protect against the buyer engaging in costly improvements that he end's up not paying for... resulting in liens against the property?  I don't necessarily want to shut down any improvements, but don't want to be left hung out in the cold with unpaid liens against the property.  Would I be able to put a restriction in the contract (perhaps on the deed?)?  Maybe requiring money be put in escrow to pay for specific improvements the buyer contracts with another party to perform (for instance , to put a road in).

Thoughts?

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