Real Estate Investor · Outstate, MN · Member since 2009 · 25 posts · 13 votes
Can't find any recent info. Apparently HUD told all states to enact their own version of SAFE or be subject to federal rules, so they all did that. How aggressively is it being enforced, has anyone been made a "test case? I worry that small investors that a small investor might get busted for selling a house on seller finance terms, Contract for Deed/CD or Land Contract. Is it better to avoid this completely and just sell on Lease Options, which aren't equitable contracts?
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
15y
It's best to discuss the matter with an attorney in your area and investigate how your state has adopted the Act. To say that Options are not "equitable" contracts is not really accurate as there is equity in title and an equitable interest. The Safe Act has used language as "any arrangement providing an installment" purchase and also specifically mentions the lease option.
The option term is something to look at, as a term of three years and sometimes over one year has been sufficient to establish that an equitable interest in and to the property has been conveyed, an example would be under the due on sale clause (but not often used).
The Safe Act also referres to the intent of the transaction.
Each state provides transactions excluded from the Act and there you will generally find the avenues to avoid any compliance requirement.