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Maryland

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Maryland — Land Installment Contract

Legal information, not legal advice. Verify against the cited primary sources before acting. Statutes in this area are frequently amended. Last verified: 2026-06-08.

Maryland is one of the most buyer-protective installment-land-contract jurisdictions in the country, and the single most important fact for an operator to internalize is that forfeiture is not available here — at all. Maryland’s Land Installment Contracts Act (Real Property Article, Title 10, Subtitle 1, §§ 10-101 to 10-108) treats the instrument as a security instrument / lien: the vendor retains legal title only as security, equitable title passes to the buyer on execution, and the vendor may recover the property on default only through a judicial foreclosure, with the buyer keeping any surplus. The Court of Special Appeals stated it plainly in long-v-burson-2008: a seller “only may [repossess] by a foreclosure action.” On top of that, the Act front-loads mandatory contract contents and disclosures (RP § 10-103), a 15-day delivery-or-void rule and a 15-day recording mandate (§ 10-102), an annual / on-demand statement of account (§ 10-107), and a 40%-equity right to demand a deed in exchange for a purchase-money mortgage (§ 10-105). This is a treat_as_mortgage regime end-to-end.

0. Identity & Terminology

  • In-state name(s): “land installment contract” is the statutory term; colloquially also “contract for deed” or “installment land contract.” Statutorily defined as an executory agreement under which the vendor agrees to sell an interest in property to the purchaser, who agrees to pay the purchase price in five or more subsequent payments (exclusive of any down payment), and the vendor retains title as security for the purchaser’s obligation. Md. Code, Real Property § 10-101(d), https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=grp&section=10-101&enactments=false.
  • “Property” is limited to residential use: improved property/chattels real occupied or to be occupied by the purchaser as a dwelling, or an unimproved subdivided lot intended to be improved for residential purposes. RP § 10-101. (The Act does not reach commercial or non-residential installment sales.)
  • Recognition: statutory and common law. The buyer’s equitable interest is a common-law/equity doctrine; the consumer-protection overlay and the foreclosure-only remedy are statutory (Title 10, Subtitle 1) and case-confirmed (long-v-burson-2008).
  • Statutory home: Md. Code, Real Property Article, Title 10, Subtitle 1, §§ 10-101 – 10-108 — https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=grp&section=10-101&enactments=false
  • Remedy regime: treat_as_mortgage. The land installment contract is a lien/security instrument; equitable title passes to the buyer; the vendor’s only route to recover the property on default is judicial foreclosure — forfeiture and self-help repossession are unavailable. long-v-burson-2008; see forfeiture-vs-foreclosure and the Skendzel/Sebastian line (skendzel-v-marshall-1973, sebastian-v-floyd-1979).

1. Formation & Mandatory Disclosures

  • Statute of frauds: Writing required. Every land installment contract must be evidenced by a contract signed by all parties containing all the terms to which they have agreed. RP § 10-102(a), https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=grp&section=10-102&enactments=false. (The general real-estate statute of frauds, RP § 5-104, independently requires a signed writing.)
  • Mandatory disclosures / contract contents: required — extensive (RP § 10-103). Every land installment contract must set out, among other things: the full name, residence, and post-office address of every party; a legal description of the property and a statement of any transfers of the property within the prior six months; the purchaser’s right to accelerate payments; an itemized financial breakdown — cash price, service/finance charges, insurance and other costs, down payment, principal balance, installment amount, interest rate, and public charges; and two mandatory notices in 12-point bold type — one confirming the purchaser’s right to receive a copy at signing, and one warning that the purchaser may be liable to a default judgment upon default. RP § 10-103, https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=grp&section=10-103&enactments=false.
    • Penalty for omission: § 10-103 itself carries no stand-alone penalty clause. The principal enforcement levers are (a) the § 10-102 delivery-or-void remedy (below) and the unconditional cancellation right before signing/recording, and (b) § 10-108, which lets the purchaser enforce §§ 10-105 and 10-107 in equity, with mandatory court costs and reasonable counsel fees shifted to a non-complying vendor. RP § 10-108, https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=grp&section=10-108&enactments=false. (Whether a § 10-103 contents defect independently voids or merely renders the contract unenforceable is flagged in needs_verification.)
  • Delivery — 15 days or void at buyer’s option. The vendor must deliver an exact copy to the purchaser at/before signing; if the vendor has not yet signed, the vendor has 15 days after learning the purchaser signed to deliver the vendor-executed copy. Failure makes the contract void at the purchaser’s option, entitling the purchaser to immediate refund of all payments and deposits. Before signing and receiving a vendor-signed copy, the purchaser has an unconditional right to cancel and obtain a full refund. RP § 10-102.
  • Recording requirement: required — 15 days; vendor records. Within 15 days after the contract is signed by both parties, the vendor must cause the contract to be recorded among the land records of the county where the property lies and mail the recorder’s receipt to the purchaser; this recording duty must be stated on the contract itself. Failure to record within 15 days gives the purchaser an unconditional right to cancel if exercised before recording occurs. RP § 10-102; recording effect/priority, RP § 10-104, https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=grp&section=10-104&enactments=false.
  • Statement of account: required (RP § 10-107). The vendor must furnish the purchaser a statement when 40% of the original cash price has been paid, annually within 30 days after January 1, and on the purchaser’s demand up to twice a year. The statement must show amounts paid for ground rent, insurance, taxes, and other periodic charges; amounts credited to principal and interest; and the balance due. RP § 10-107, https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=grp&section=10-107&enactments=false. Enforced via § 10-108 (equity action + fee-shifting).
  • Prepayment: The contract must state the purchaser’s right to accelerate (prepay) payments (RP § 10-103); the Act contemplates prepayment as a buyer right. (Whether a prepayment penalty may be imposed is not addressed by the Act and is flagged in needs_verification.)
  • Usury / interest cap: The Act ties the contract’s stated interest rate directly to a usury ceiling: § 10-103(b) requires the itemized financial disclosure to state an interest rate “not exceeding the rate permitted under § 12-404(b)” of the Commercial Law Article. CL § 12-404(b) caps the rate at 16% per annum simple interest, with up to 24% available under CL § 12-404(d) for qualifying post-July-1-1982 loans, https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gcl&section=12-404&enactments=false. That § 12-404(b) ceiling is the operative cap for a Maryland land installment contract. (For context, Maryland’s general legal rate absent agreement is 6% per annum under CL § 12-102, https://mgaleg.maryland.gov/mgawebsite/laws/StatuteText?article=gcl&section=12-102&enactments=false, and the default written-agreement ceiling is 8% under CL § 12-103(a), https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gcl&section=12-103&enactments=false, but the § 10-103(b) cross-reference makes § 12-404(b), not those general rates, the governing limit for these contracts.)

2. Buyer’s Equitable Interest

  • Equitable title passes at execution. “Upon entering into the land installment contract, equitable title immediately passed to the buyer”; the vendor retains legal title only as a security interest. long-v-burson-2008. This is the doctrine of equitable-conversion applied to the installment instrument, and it is the reason Maryland forecloses rather than forfeits.
  • Recordable / insurable: The buyer’s interest is recordable — indeed § 10-102 requires the vendor to record the contract within 15 days, and § 10-104 fixes the purchaser’s recorded interest as prior to later-arising claims or liens against the property. RP §§ 10-102, 10-104. Title insurance is generally available on the underlying title; the buyer’s equitable interest is insurable subject to the title company’s underwriting. (Insurer practice flagged in needs_verification.)
  • Risk of loss / improvements: Contract-governed in practice; the Act presupposes the buyer occupies and insures the dwelling (insurance is an itemized § 10-103 cost and a § 10-107 accounting item). Because the buyer is the equitable owner, improvements and waste are the buyer’s, and the buyer’s equity is precisely what foreclosure (not forfeiture) is designed to protect.

3. Default & Remedies → see forfeiture-vs-foreclosure

  • Primary remedy: judicial foreclosure (only). Maryland does not permit forfeiture, rescission-and-retention, or self-help repossession of a land installment contract. A vendor seeking to recover the property “only may do so by a foreclosure action,” because the vendor holds merely a security interest and the buyer holds equitable title. long-v-burson-2008; https://caselaw.findlaw.com/md-court-of-special-appeals/1294731.html. See forfeiture-vs-foreclosure.
  • Forfeiture available? No. Forfeiture is barred as a matter of law — not merely barred above a substantial-equity threshold. There is therefore no equity cliff to track (contrast Texas’s 40%/48-payment rule): the foreclosure requirement applies from the first dollar of default. long-v-burson-2008.
    • Substantial-equity bar: subsumed — the regime protects equity by always requiring foreclosure, so the Skendzel concern (skendzel-v-marshall-1973) is structurally satisfied; there is no separate equity threshold.
  • Right to cure (RP § 10-106). If the purchaser, on or before the date designated in the vendor’s notice of intention to terminate for default, complies with the terms in respect of which the default occurred, the contract continues in full force and effect, notwithstanding any contrary contract provision. This is a mandatory, non-waivable cure right. RP § 10-106, https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=grp&section=10-106&enactments=false. The statute sets the cure as running to the vendor-designated date in the termination notice rather than fixing a flat number of days. (Whether Md. Rule 14-205’s foreclosure-notice timing supplies a minimum cure window is flagged in needs_verification.)
  • Foreclosure procedure: Enforcement runs through Maryland’s judicial/assent-to-decree foreclosure machinery in Maryland Rule Title 14, Chapter 200 (Md. Rule 14-205 expressly addresses the notice required to foreclose a land installment contract). (Exact 14-205(c) notice text not retrieved this run — flagged in needs_verification.)
  • 40%-equity right to a deed (RP § 10-105). Once the purchaser has paid 40% or more of the original cash price, the purchaser may demand a deed on condition of executing a purchase-money mortgage back to the vendor; the executed deed and mortgage “shall supersede entirely the land installment contract.” Mortgage payments may not exceed the contract payments without the mortgagor’s consent. RP § 10-105, https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=grp&section=10-105&enactments=false. This is a buyer-elected conversion that moves the deal fully onto mortgage rails.
  • Acceleration: The Act requires the contract to disclose the purchaser’s acceleration (prepayment) right (§ 10-103); a vendor’s acceleration on default is effected within the foreclosure framework rather than by self-help. (Vendor-side acceleration enforceability flagged in needs_verification.)
  • Restitution / surplus: Because recovery is by foreclosure sale, the buyer’s equity is realized as surplus proceeds distributed to the buyer after the vendor’s secured balance and costs — the dispute in long-v-burson-2008 was precisely over distribution of foreclosure proceeds, confirming the buyer’s claim to surplus.
  • Seller’s other remedies: foreclosure of the security interest; suit on the debt; the § 10-105 conversion is buyer-initiated. Forfeiture, rescission-and-retention, and eviction are not available.

▸ For Sellers / Operators — Maryland is a foreclose-only state — the most deal-defining fact in this whole page. You cannot forfeit, you cannot keep the payments and take the house back, and you cannot evict a defaulting buyer as a tenant; your only remedy is a judicial foreclosure (Md. Rule 14-205), and the buyer gets any surplus. Compliance is non-optional and front-loaded: deliver a signed copy and record the contract within 15 days (§ 10-102) or the buyer can void/cancel and demand every dollar back; pack the contract with the § 10-103 contents (including the two 12-point-bold notices); honor the statement-of- account duties (§ 10-107) or eat the buyer’s attorney’s fees under § 10-108; and respect the mandatory cure right (§ 10-106) and the buyer’s 40%-equity right to demand a deed (§ 10-105). For most operators, selling on a note + purchase-money mortgage/deed of trust from the outset is cleaner than a Title 10 land installment contract, since you end up on foreclosure rails either way.

▸ For Buyers — You hold equitable title from day one (§ 2), you cannot be forfeited or evicted — only foreclosed, with a right to surplus proceeds — you have a statutory right to cure before termination (§ 10-106), a void/refund remedy if the vendor misses the 15-day delivery/recording rules (§ 10-102), an annual/on-demand accounting (§ 10-107), and the right to demand a deed at 40% paid (§ 10-105).

3b. Remedies — Advanced

  • Election of remedies: Largely moot — the statute channels every default into foreclosure; there is no forfeiture/foreclosure election to make. long-v-burson-2008.
  • Deficiency: Maryland foreclosures generally permit a deficiency judgment by separate action subject to the rules governing foreclosure-sale deficiencies; a land installment contract foreclosed as a security instrument follows the ordinary mortgage pattern. (Land-installment-specific deficiency authority flagged in needs_verification.)
  • Equitable relief from forfeiture: Not needed as a separate doctrine — forfeiture is statutorily/judicially unavailable, so the Skendzel-style anti-forfeiture relief is built into the foreclosure-only rule.
  • Ejectment vs. eviction path: A defaulting land-installment buyer is an owner holding equitable title, not a tenant — the vendor cannot use the summary landlord-tenant/eviction process and must foreclose. long-v-burson-2008.
  • Quiet title after foreclosure: Title is settled through ratification of the foreclosure sale and recording of the trustee’s/auditor’s deed; a separate quiet-title action is generally unnecessary where the foreclosure is properly ratified. (Court/ timeline specifics flagged in needs_verification.)
  • Forfeited payments: There is no forfeiture of payments — the buyer’s equity is preserved and realized as foreclosure surplus, not retained by the seller. A liquidated-damages clause purporting to let the seller keep installments on default would conflict with the foreclosure-only scheme. (Direct authority striking such a clause flagged in needs_verification.)
  • Intervening vendor-lien risk to buyer: Because the vendor retains legal title, liens against the vendor are a risk, but § 10-104 fixes the purchaser’s recorded interest as prior to later-arising claims/liens, and the 15-day recording mandate (§ 10-102) is the buyer’s principal protection. RP § 10-104.

4. Federal Overlay (as applied in-state) → see dodd-frank-seller-financing, safe-act-mlo

  • Dodd-Frank exposure: A Maryland residential land installment contract is “credit” / seller financing under TILA and the Loan-Originator Rule. The federal ≤1-property (no balloon / no ATR) and ≤3-property (with ATR) seller-financer exclusions from the loan-originator definition apply the same in Maryland as nationally. See dodd-frank-seller-financing for the 12 C.F.R. § 1026.36(a) thresholds. An operator selling multiple owner-financed homes within 12 months loses the exclusion and must use a licensed loan originator and meet ATR/QM.
  • SAFE Act / MLO licensing: Maryland implements the federal SAFE Act through the Maryland Mortgage Lender Law / Mortgage Originator licensing administered by the Office of the Commissioner of Financial Regulation (OCFR); seller-financers above the federal/state de-minimis thresholds may require a licensed mortgage originator. See safe-act-mlo. (Exact Maryland Financial Institutions Article SAFE-Act sections and the state seller-financer de-minimis threshold flagged in needs_verification.)
  • State consumer-protection overlay: Title 10, Subtitle 1 itself is the overlay — one of the older and more protective land-contract statutes in the country — reinforced by the Maryland Consumer Protection Act (Md. Code, Commercial Law Title 13) for deceptive practices. (CPA application to a Title 10 violation flagged in needs_verification.)
  • CFPB enforcement notes: Contract-for-deed abuses (e.g., Harbour Portfolio) drove the 2016+ CFPB/state-AG scrutiny nationally; Maryland’s foreclose-only, equity-protecting scheme is structurally hostile to the predatory forfeiture model those actions targeted.

5. Title, Recording & Wraps → see garn-st-germain-due-on-sale

  • Memorandum / recording: Maryland requires recording of the full land installment contract within 15 days (RP § 10-102), not merely a memorandum, and § 10-104 gives the recorded contract priority over later claims/liens. RP §§ 10-102, 10-104.
  • Garn-St. Germain due-on-sale: A land installment contract / contract for deed is an enumerated “transfer” that can trigger the lender’s due-on-sale clause — the federal regulation expressly lists “installment land sales contracts,” “land contract,” “contract for deed,” and “wraparound loans” within the conveyances reached by a due-on-sale clause. 12 C.F.R. § 191.2 (definitions of “assumed” and “sale or transfer,” formerly Part 591), Part 191, https://www.ecfr.gov/current/title-12/chapter-I/part-191; Garn-St. Germain Act, 12 U.S.C. § 1701j-3. The residential exemptions (e.g., transfer into an inter vivos trust with the borrower as beneficiary) generally do not cover a sale-on-terms to a third-party buyer, so a Maryland wrap carries acceleration risk. See garn-st-germain-due-on-sale.
  • Underlying mortgage / wraps: Title 10 does not independently prohibit a wrap, but the § 10-102 recording mandate, the § 10-104 priority rule, and the buyer’s equitable title mean a wrapping vendor who lets the underlying loan default exposes the buyer’s recorded interest; wrap risk is governed by Garn-St. Germain acceleration plus ordinary lien-priority law. (Maryland-specific wrap disclosure duty flagged in needs_verification.)
  • Deed delivery: Legal title is delivered at payoff/conversion — either at full performance or earlier via the § 10-105 40%-equity deed-for-purchase-money-mortgage conversion, which “supersede[s] entirely the land installment contract.” RP § 10-105.
  • Marketable title at payoff: The vendor must convey marketable legal title on completion; the recorded contract and § 10-104 priority protect the buyer’s interim interest.
  • Title insurance: Generally available on the underlying title; buyers are well advised to obtain an owner’s policy at conversion/payoff. (Insurer practice flagged in needs_verification.)
  • Seller death/bankruptcy effect: The vendor’s estate/trustee takes subject to the buyer’s recorded equitable interest (§§ 10-102, 10-104); the buyer’s foreclosure- protected equity is not defeated by the vendor’s insolvency. (Seller-bankruptcy treatment flagged in needs_verification.)

6. Tax Treatment

  • IRC § 453 installment reporting: A Maryland land installment contract is an installment sale; the seller reports gain ratably as principal is received, subject to the dealer exception (IRC § 453(b)(2), (l)). See irc-453-installment-sale.
  • Property tax: Buyer pays in practice (contract-governed; taxes are an itemized § 10-103 cost and a § 10-107 accounting item). The equitable owner-occupant bears the ad valorem tax in the ordinary course.
  • Homestead / Homeowners’ Property Tax Credit for equitable owner: Maryland’s Homestead Property Tax Credit (assessment-increase cap) and the Homeowners’ Property Tax Credit turn on owner-occupancy of a principal residence; a contract-for-deed purchaser in possession is generally the occupant-owner for these purposes. (Exact Tax-Property Article eligibility text for an equitable/contract owner not retrieved this run — flagged in needs_verification.)
  • Transfer / recordation tax: Maryland imposes state transfer tax, county transfer tax (varies by county), and recordation tax on instruments conveying real property. Because the land installment contract is recorded within 15 days (§ 10-102), the timing and incidence of transfer/recordation tax on the contract versus the eventual deed is a live issue. (Exact Tax-Property Article sections and whether the recorded land installment contract triggers transfer/recordation tax at contract or only at deed — flagged in needs_verification.)

7. Bankruptcy & Death / Divorce

  • Buyer bankruptcy: Because Maryland treats the land installment contract as a security instrument with the buyer holding equitable title (long-v-burson-2008), the buyer’s interest is most naturally a secured-debt position the buyer can cure/pay through a Chapter 13 plan rather than an executory contract subject to § 365 assumption/rejection — but national treatment splits. See forfeiture-vs-foreclosure. (Maryland/4th-Circuit bankruptcy characterization flagged in needs_verification.)
  • Seller bankruptcy: Buyer’s recorded equitable interest and § 10-104 priority generally survive; the trustee takes subject to the recorded contract. (Direct authority flagged in needs_verification.)
  • Assignability by buyer: The buyer’s equitable interest is assignable (the interest in long-v-burson-2008 had itself been assigned to the purchaser-side party); anti-assignment clauses are common and their enforceability is contract-dependent. (Enforceability authority flagged in needs_verification.)
  • Survivorship / divorce: The equitable interest is marital/non-marital property characterized like other realty and passes by the buyer’s estate plan or equitable- distribution rules.

8. Case Law (real, verified)

CaseYearTopicHolding (plain English)Source
long-v-burson-20082008remedy regime / forfeiture vs. foreclosureA land installment contract is a security instrument; equitable title passes to the buyer; the vendor may recover the property only by foreclosure — forfeiture and self-help repossession are unavailable, and the buyer keeps any surplus.https://caselaw.findlaw.com/md-court-of-special-appeals/1294731.html
  • Long v. Burson, 182 Md. App. 1, 957 A.2d 173 (Md. Ct. Spec. App. 2008). Good law. The controlling holding (“only may do so by a foreclosure action”; “equitable title immediately passed to the buyer”; the seller holds “bare legal title … solely as a lien”) is confirmed verbatim against the published opinion as reproduced in public legal databases (FindLaw md-court-of-special-appeals/1294731; corroborated by Justia/Cornell indexing). (FindLaw blocked automated retrieval this run with HTTP 403; holding language and citation independently re-confirmed via search of the published opinion text.)

9. Edge Cases (state-specific notes)

  • garn-st-germain-due-on-sale — A Maryland land installment contract / wrap is an enumerated transfer that can trigger the underlying lender’s due-on-sale clause (12 C.F.R. Part 191); residential Garn-St. Germain exemptions do not shelter a sale to a third-party buyer.
  • Foreclosure-only, no equity cliff — unlike Texas’s 40%/48-payment forfeiture bar, Maryland bars forfeiture from the first default; there is no threshold to track. (long-v-burson-2008.)
  • 15-day void/cancel traps — missing the § 10-102 delivery or recording deadline lets the buyer void/cancel and recover all payments; this is the operator’s most common foot-gun.
  • 40%-equity deed conversion — at 40% paid the buyer can unilaterally demand a deed + purchase-money mortgage, superseding the contract (§ 10-105).
  • Eviction unavailable — a defaulting buyer is an equitable owner, not a tenant (long-v-burson-2008); the summary landlord-tenant process does not apply.

10. Operations

  • Where records live: Land records in the Circuit Court clerk’s office for each county (and Baltimore City); the vendor must record the contract there within 15 days (§§ 10-102, 10-104).
  • Public access: mgaleg.maryland.gov (statute text); Maryland Land Records (mdlandrec.net) for recorded instruments; mdcourts.gov for opinions and the Maryland Rules; Maryland Judiciary Case Search for foreclosure dockets.
  • Who may draft (UPL): Drafting a land installment contract and the conversion deed/ purchase-money mortgage is the practice of law; title companies and attorneys typically prepare them. Completing blanks on a standardized form is generally permitted; drafting tailored terms risks UPL.
  • Costs/timelines: Nominal recording fees plus transfer/recordation tax (see § 6); the controlling clocks are the 15-day delivery and 15-day recording deadlines (§ 10-102) and the 30-day-after-January-1 annual statement (§ 10-107). Foreclosure timelines follow Md. Rule Title 14, Chapter 200.
  • Key agencies: Circuit Court clerks (recording/foreclosure); Office of the Commissioner of Financial Regulation (OCFR) (mortgage-originator licensing); Maryland Attorney General — Consumer Protection Division.
  • Useful forms: County land-installment-contract recording forms; Md. Rule 14-205 foreclosure pleadings; § 10-105 deed + purchase-money-mortgage conversion package.

11. Meta

Disclaimer. This page is legal information, not legal advice, and may be out of date. Contract-for-deed statutes are frequently amended and remedies turn on facts. Consult a licensed attorney in this jurisdiction before drafting, enforcing, or signing an installment land contract.

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