Are Land Contracts Legal in New York

Are Land Contracts Legal in New York?

If you`re interested in buying or selling property in New York, you may have heard of something called a land contract. But what is it, and is it legal in New York? Let`s take a closer look.

What is a Land Contract?

A land contract, also known as a contract for deed or installment sale agreement, is a type of seller financing where the seller acts as the lender and the buyer makes payments directly to them. In a land contract, the buyer takes possession of the property but does not receive the deed until all payments have been made.

Are Land Contracts Legal in New York?

Yes, land contracts are legal in New York. However, they are subject to strict regulations and requirements under the New York Real Property Law. Sellers must provide buyers with a disclosure statement outlining the terms of the contract, including the purchase price, interest rate, payment schedule, and consequences of default.

In addition, land contracts in New York must meet the following requirements:

1. The contract must be in writing and signed by both the buyer and seller.

2. The buyer must make a down payment of at least 10% of the purchase price.

3. The contract must contain a provision allowing the buyer to receive a marketable title within five years.

4. The buyer must maintain homeowner`s insurance on the property.

Benefits and Risks of Land Contracts

Land contracts can be a useful option for buyers who may not qualify for a traditional mortgage or who want to avoid paying closing costs. They also offer sellers the opportunity to earn interest on the sale and potentially sell their property more quickly.

However, there are also risks involved with land contracts. Buyers may pay a higher interest rate than they would with a traditional mortgage, and they may not be able to deduct mortgage interest on their taxes. In addition, if the buyer defaults on the contract, the seller may be able to evict them without going through foreclosure proceedings, which can be a quicker and easier process for the seller.


Land contracts are legal in New York, but they come with their own set of regulations and risks. Before entering into a land contract, it`s important to carefully consider the terms and consult with a real estate attorney or financial professional.