Installment Purchase Agreements for Real Estate

By on November 24th, 2014

Posted in Pennsylvania Law Monitor

Traditionally, in Pennsylvania, an agreement of sale between seller and buyer “seals the deal” for the purchase of real estate. However, a prospective seller may also choose to have the buyer take possession of the property and “pay as he goes,” i.e. enter into an installment purchase agreement for the real estate. The core of such an agreement is the seller’s retention of actual title to the property (subject to the buyer’s right to possess it if there is no default under the agreement), until the installment payments toward the purchase price are all paid by the buyer. Afterward, the seller conveys legal title to the property to the buyer.

Once fairly common in central PA, installment purchase agreements today can be found in all areas of the Commonwealth, including the Philadelphia area.

The problem comes when one of these agreements goes into default (usually for non-payment of installments). Because the seller remains in title, it’s not like he has a mortgage he can foreclose on and obtain the property at sheriff’s sale. The answer lies in the Pennsylvania Installment Land Contract Law (“PILCL”), 68 Pa. C.S. sec. 902 et seq. 

Under the PILCL, different remedies are available to the seller seeking relief on a defaulted installment purchase agreement. In addition, the statutory scheme does not rule out other possible relief available under Pennsylvania law, such as filing a quiet title action. If you are a seller of real estate under an installment purchase agreement in default, contact Stark & Stark for expert enforcement of your rights.

Multiple locations to better serve your needs—

Princeton, NJ

993 Lenox Dr, Building 2
Lawrenceville, NJ 08648
Phone: 609.896.9060
Secondary phone: 800.535.3425
Fax: 609.896.0629
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Marlton, NJ

40 Lake Center, 401 NJ-73, Suite 130
Marlton, NJ 08053
Phone: 856.874.4443
Secondary phone: 888.241.7424
Fax: 856.874.0133
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Yardley, PA

777 Township Line Road, Suite 120
Yardley, PA 19067
Phone: 267.907.9600
Fax: 267.907.9659
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New York, NY

5 Pennsylvania Plaza 23rd Floor
New York, NY 10001
Phone: 800.535.3425
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Philadelphia, PA

The Bellevue 200 S Broad St #600
Philadelphia, PA 19102
Phone: 267.907.9600
Secondary phone: 800.535.3425
Fax: 215.564.6245
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Bridgeton, NJ

78 W Broad St
Bridgeton, NJ 08302
Phone: 856.874.4443
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