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Ohio

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Ohio — Contract for Deed / 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.

Ohio is one of the strongest statutory contract-for-deed jurisdictions in the country. The instrument is the land installment contract, governed end-to-end by Ohio Revised Code (ORC) Chapter 5313 — a dedicated consumer-protection chapter that prescribes the contract’s required contents, a 20-day recording duty, periodic statements, a graduated default/cure procedure, and — critically — a bright-line equity rule that forces the seller to foreclose like a mortgage (rather than forfeit) once the buyer has paid 5 years or 20% of the price. Ohio’s regime is therefore a hybrid: short-tenure, low-equity defaults can be cleared by statutory forfeiture and a fast eviction-style restitution action; everything past the threshold must go through judicial foreclosure and sale.

0. Identity & Terminology

  • In-state name(s): “Land installment contract” is the statutory term (ORC 5313.01(A)). Commonly also called a land contract or contract for deed. Defined as an executory agreement under which the vendor agrees to convey title and the vendee pays the price in installments while the vendor retains title as security. Option contracts are expressly excluded. — ORC 5313.01
  • Scope note: Chapter 5313 applies to “property” defined as Ohio real property improved by a dwelling (ORC 5313.01(B)). Vacant land and most commercial parcels fall outside Chapter 5313’s protections and are governed by common-law contract/forfeiture principles. — ORC 5313.01
  • Recognition: Statutory and common law.
  • Statutory home: Title 53 (Real Property), ORC Ch. 5313 §§ 5313.01–5313.10 — codes.ohio.gov/ohio-revised-code/chapter-5313
  • Remedy regime: hybrid — statutory forfeiture + eviction-style restitution for contracts in effect < 5 years and < 20% paid (ORC 5313.08); mandatory judicial foreclosure and sale once the buyer reaches 5 years OR 20% of price (ORC 5313.07). See forfeiture-vs-foreclosure.

1. Formation & Mandatory Disclosures

  • Statute of frauds: Writing required. A land installment contract is an executory agreement to convey real property and must satisfy Ohio’s statute of frauds (ORC 1335.05); Chapter 5313 separately requires execution in duplicate with a copy to each party (ORC 5313.02(A)).
  • Mandatory disclosures / required contents (present): ORC 5313.02(A) prescribes the contract’s mandatory contents, including: full names and addresses of the parties; date signed; legal description; contract price; separate service charges; down payment; principal balance owed; amount and due date of each installment; the interest rate on the unpaid balance and the method of computation; a statement of any encumbrances against the property; the vendor’s obligation to deliver a general warranty deed on completion; the vendor’s duty to furnish title evidence per local custom; the vendee’s right to cure the vendor’s mortgage defaults and take contract credit; the recording covenant; allocation of taxes/assessments; and a statement of any pending public-agency orders against the property.
    • Mortgage cap (anti-overencumbrance): “No vendor shall place a mortgage on the property in an amount greater than the balance due on the contract without the consent of the vendee” — ORC 5313.02(B).
    • Form prescribed: No single state form is mandated, but the contents are mandatory and the document must conform to deed/mortgage execution formalities; a metes-and-bounds description must be approved by the county engineer on the contract (ORC 5313.02(D)).
    • Penalty for omission: Chapter 5313 contains no per-day fine. Enforcement runs through ORC 5313.04: on the vendor’s failure to comply with Chapter 5313, the vendee may sue in municipal, county, or common pleas court and the court “shall grant appropriate relief.” See needs_verification for the precise measure of damages. — ORC 5313.02, ORC 5313.04
  • Recording requirement (present, with deadline): The vendor must record the contract and deliver a copy to the county auditor within 20 days after both parties sign — ORC 5313.02(C). This is one of the few CFD recording rules in the country with a hard statutory deadline. — ORC 5313.02
  • Periodic accounting statement (present): The vendor must furnish the vendee, at least once a year or on demand (but no more than twice a year), a statement showing the amount credited to principal and interest and the balance due. A land contract passbook issued by the vendor or a financial institution satisfies the duty. — ORC 5313.03
  • Prepayment: Chapter 5313 does not bar prepayment and prescribes no statutory prepayment penalty; prepayment terms are contract-governed. (No primary prohibition located — see needs_verification.)
  • Usury / interest cap: Ohio’s general cap is 8% per annum (ORC 1343.01(A)). ORC 1343.01(B) authorizes a higher contract rate for, among other things, a loan “secured by a mortgage, deed of trust, or land installment contract on real estate” — expressly extending the higher exemption tier to land installment contracts — and the catch-all rate for an unexempted real-estate land installment contract is 8% in excess of the federal-reserve fourth-district 90-day commercial- paper discount rate at execution. Most owner-financed CFDs qualify for the statutory exemption. — ORC 1343.01

2. Buyer’s Equitable Interest

  • Equitable title passes; equitable conversion recognized. Under an Ohio land installment contract, the purchaser becomes the equitable owner the moment the contract is executed, holding the incidents of ownership while the vendor retains legal title in trust as security. — wood-v-donohue-1999 (Wood v. Donohue, 136 Ohio App.3d 336, 736 N.E.2d 556 (1st Dist. 1999)); ORC 5313.01(A). See equitable-conversion.
  • Recordable: Yes — indeed recording the contract is mandatory for the vendor within 20 days (ORC 5313.02(C)); the recorded contract gives the vendee’s interest public-record priority.
  • Insurable: The vendee’s equitable interest is insurable; Ohio title companies issue land-contract vendee policies/endorsements (see §5).
  • Risk of loss: On the buyer (equitable owner) absent contrary contract terms — Wood v. Donohue held the equitable owner “bears all losses” while also enjoying all benefits that accrue (there, a class-action settlement attributable to the property). — wood-v-donohue-1999
  • Improvements and waste: As equitable owner in possession the vendee enjoys use and improvements; the vendor’s restitution remedy on forfeiture is statutorily limited and can include an offset for deterioration or destruction caused by the vendee’s use (ORC 5313.10).

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

  • Primary remedy: Election dictated by equity built. Two statutory tracks: (a) forfeiture + restitution (ORC 5313.05–5313.08) for contracts in effect < 5 years and < 20% paid; (b) mandatory judicial foreclosure and sale (ORC 5313.07) once the buyer crosses 5 years OR 20% of the purchase price.
  • Forfeiture available? Yes, but only below the threshold. Forfeiture may be enforced only after 30 days from the date of default (ORC 5313.05), and the vendee may cure within that 30 days by paying all amounts then due plus any contract fees. — ORC 5313.05
  • Substantial-equity bar (statutory, bright-line): Exists. “If the vendee… has paid… for a period of five years or more from the date of the first payment or has paid toward the purchase price a total sum equal to or in excess of twenty per cent thereof, the vendor may recover possession only by use of a proceeding for foreclosure and judicial sale” — ORC 5313.07. Ohio codifies by statute the substantial-equity principle that skendzel-v-marshall-1973 reached by equity. — ORC 5313.07
  • Statutory cancellation / notice procedure (below threshold):
    • Step 1 — 30-day default window: No forfeiture until 30 days after default; vendee may cure by paying arrears + fees (ORC 5313.05).
    • Step 2 — written notice of forfeiture: After the 30 days, the vendor serves a written notice that reasonably identifies the contract and property, specifies the unperformed terms, and states the contract will be forfeited unless the vendee performs within 10 days of completed service and vacates. — ORC 5313.06
    • Cure period: 10 days running from completed service of the 5313.06 notice.
    • Service methods: personal delivery to the vendee; leaving the notice at the vendee’s usual place of residence; leaving it at the property; or registered or certified mail to the last known address. — ORC 5313.06
    • Step 3 — forfeiture action: If still in default after the 5313.05 and 5313.06 periods and the contract is < 5 years, the vendor brings an action for forfeiture and restitution under Chapter 1923 (forcible entry & detainer / eviction) — ORC 5313.08. — ORC 5313.06, ORC 5313.08
  • Judicial foreclosure required when: the buyer has paid ≥ 5 years or ≥ 20% of price — foreclosure and judicial sale under ORC 5313.07 (procedure per ORC 2323.07); the vendor takes sale proceeds up to the unpaid contract balance, with any surplus to the vendee. — ORC 5313.07
  • Acceleration enforceable? Conditional — the statute does not prescribe acceleration; contract acceleration clauses are read against Chapter 5313’s mandatory cure windows and the threshold rule, which cannot be waived to the vendee’s detriment. (See needs_verification.)
  • Restitution offset on forfeiture (required): On a completed forfeiture the vendor’s recovery is capped by ORC 5313.10: the vendor may recover only “the difference between the amount paid by the vendee on the contract and the fair rental value of the property plus an amount for the deterioration or destruction” caused by the vendee. Forfeited payments above fair rental value are not kept by the vendor — no windfall. — ORC 5313.10, howard-v-temple-2007
  • Seller’s other remedies: Chapter 5313 does not prevent a quiet-title action to establish the validity of a claim, an action for unpaid installments, or cancellation of the parties’ interests under ORC 5301.331 — ORC 5313.07. But terminating the contract by forfeiture (5313.08) or foreclosure (5313.07) is the exclusive remedy and bars further action on the contract (ORC 5313.10).
  • Buyer grace / redemption: The 30-day default cure (5313.05) and the 10-day post-notice cure (5313.06) are the statutory grace rights; in foreclosure, the buyer redeems via the equity of redemption up to confirmation of judicial sale.

▸ For Sellers / Operators — This is the deal-defining module. Ohio’s threshold is the single fact to know cold: the day the buyer hits 5 years of payments OR 20% of the price, forfeiture is off the table and you must foreclose and sell judicially (ORC 5313.07). Below that line, run the procedure exactly: wait the full 30 days after default (5313.05), then serve a 5313.06 notice (certified mail is the safe service method) giving 10 days to cure and vacate, then file the 5313.08 forfeiture/restitution action under Chapter 1923. Do not draft for a deficiency: ORC 5313.10 caps your recovery at fair-rental-value-shortfall plus damage and a deficiency judgment is barred — howard-v-temple-2007. Compliance up front (record within 20 days, §1, and furnish the periodic statement, §1) is what keeps the contract enforceable and keeps you out of a 5313.04 claim.

▸ For Buyers — You are the equitable owner from signing (§2, wood-v-donohue-1999). Your cure rights (30 days + 10 days) and, above all, the 5-year/20% bar forcing foreclosure (§3) are the protections that matter most on default — once you cross that line you cannot simply be forfeited out, and any judicial-sale surplus over the contract balance is yours.

3b. Remedies — Advanced

  • Election of remedies: Applies. Choosing forfeiture-and-restitution (5313.08) or foreclosure (5313.07) is an exclusive remedy that bars further action on the contract — ORC 5313.10; howard-v-temple-2007.
  • Deficiency after forfeiture/foreclosure: Not permitted. Howard v. Temple holds that a vendor electing forfeiture is limited to the 5313.10 measure and may not obtain a deficiency judgment for the gap between the contract price and resale value; the court described Chapter 5313 as a consumer-protection law meant to prevent a windfall. — howard-v-temple-2007; ORC 5313.10
  • Anti-forfeiture / equity relief: Ohio supplies the protection by statute (the 5313.07 threshold + 5313.10 cap) rather than requiring case-by-case equitable relief; the statutory scheme is the controlling source.
  • Ejectment vs. eviction path: Below the threshold, the defaulting buyer is removed through Chapter 1923 forcible-entry-and-detainer (eviction-style) restitution under ORC 5313.08 — fast, in municipal/county court. Above the threshold, the buyer is treated as an equitable owner and removed only through foreclosure and judicial sale (5313.07) in common pleas court.
  • Quiet title after cancellation: A 5313.08 judgment or 5313.07 foreclosure operates to cancel the contract as of a court-specified date; the clerk transmits an authenticated copy to the county recorder, recorded under ORC 5301.331 as the instrument of cancellation (ORC 5313.09). A separate quiet-title action is permitted but not required (ORC 5313.07). — ORC 5313.09
  • Forfeited payments treatment: Not a pure liquidated-damages forfeiture — ORC 5313.10 recharacterizes the recovery as a fair-rental-value/deterioration measure, returning to the vendee any payments exceeding that measure (no penalty windfall).
  • Intervening seller-lien risk to buyer: ORC 5313.02(B) bars the vendor from mortgaging the property above the contract balance without the vendee’s consent; the vendee may cure the vendor’s mortgage default and take contract credit (5313.02(A)). A pre-existing or wrap mortgage can still threaten the buyer’s title — see §5.

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

  • Dodd-Frank exposure: A land installment contract on a dwelling is residential mortgage credit for federal purposes, so the dodd-frank-seller-financing seller-financer exclusions apply: the ≤ 3-property / 12-month (with ATR conditions) and the ≤ 1-property (natural-person, no-balloon, fixed/qualifying-ARM) safe harbors determine whether the seller must comply with ATR/loan-originator rules. Ohio adds no contrary state exemption that overrides the federal floor. — see dodd-frank-seller-financing, safe-act-mlo
  • SAFE Act / MLO licensing: Ohio implements the federal SAFE Act through the Ohio Residential Mortgage Lending Act (RMLA), ORC Chapter 1322, administered by the Ohio Department of Commerce, Division of Financial Institutions (Superintendent of Financial Institutions). A seller financing the sale of their own residence/property is generally not “in the business” of loan origination, but a repeat operator financing multiple dwellings can cross into RMLA registration / MLO licensing. Confirm the current 1322.01 definitions and exemption letter criteria each deal. — ORC 1322.01, ORC Ch. 1322; see safe-act-mlo
  • CFPB enforcement notes: Ohio land contracts have drawn scrutiny in the national predatory-CFD wave (Harbour Portfolio-type operators marketed heavily in Ohio cities); Chapter 5313’s mandatory recording, statements, and the 20%/5-year foreclosure floor are the state-law guardrails. Federal UDAAP/ATR exposure layers on top for repeat sellers.
  • State consumer-protection overlay: Chapter 5313 is itself the consumer-protection statute (so characterized in howard-v-temple-2007); the Ohio Consumer Sales Practices Act (ORC Ch. 1345) may also reach a seller acting as a “supplier” in consumer real-estate transactions (fact-specific — see needs_verification).

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

  • Memorandum vs. full recording: Ohio is unusual — the full contract must be recorded by the vendor within 20 days (ORC 5313.02(C)), not merely a memorandum. The contract must meet deed/mortgage execution formalities (ORC 5313.02(D)). — ORC 5313.02
  • Garn-St. Germain due-on-sale: A land installment contract transferring possession/ equitable ownership is a “sale or transfer” that can trigger a due-on-sale clause in an underlying mortgage; the federal garn-st-germain-due-on-sale residential exemptions (e.g., transfers into an inter vivos trust where the borrower remains a beneficiary) are narrow and generally do not shelter a true CFD sale to a third-party buyer. Operators wrapping an existing loan must assume the lender may call it. — see garn-st-germain-due-on-sale
  • Underlying-mortgage / wrap: Permitted, but constrained by ORC 5313.02(B) (no vendor mortgage above the contract balance without vendee consent) and 5313.02(A)(13) (vendee’s right to cure vendor mortgage defaults for credit). A wrap over a due-on-sale loan carries acceleration risk (above) and must be disclosed via the encumbrance statement (5313.02(A)(10)). Disclosure required: yes (encumbrance statement).
  • Deed delivery mechanism: Title is retained by the vendor as security; the vendor must deliver a general warranty deed on completion/payoff (ORC 5313.02(A)(11)). Escrow of the deed is permitted but not statutorily required.
  • Marketable title at payoff: The vendor must furnish title evidence per local custom (5313.02(A)(12)) and convey by general warranty deed; marketability is a contract/warranty matter at payoff.
  • Title insurance: Available to the vendee — Ohio title agencies issue land-contract vendee coverage; the recorded contract supports insurability of the equitable interest.
  • Seller’s title-defect / death / bankruptcy effect: Because the vendor holds legal title as security, vendor liens, death, or bankruptcy can cloud delivery; the recorded contract and the vendee’s equitable ownership (Wood v. Donohue) protect the buyer’s priority, and the buyer may compel conveyance / cure vendor defaults (5313.02(A)(13)).

6. Tax Treatment

  • IRC §453 installment reporting: Available for an Ohio land installment contract sale of non-dealer real property; the seller reports gain as principal is received (dealer property is excluded from §453). — see irc-453-installment-sale; 26 U.S.C. § 453
  • Property-tax responsibility: Contract-governed; ORC 5313.02(A)(15) requires the contract to allocate taxes/assessments, and by default the vendee (equitable owner in possession) pays unless otherwise agreed. The vendor records with the county auditor (5313.02(C)), which is how the contract enters the tax-duplicate chain. — ORC 5313.02
  • Homestead / owner-occupancy benefits: Ohio’s owner-occupancy and homestead reductions (ORC 323.151 et seq.) turn on ownership/occupancy; an equitable owner under a recorded land contract in possession is generally treated as the owner-occupant for these reductions (verify current county practice — see needs_verification). — ORC 323.152
  • Transfer / conveyance-fee tax: Ohio’s real-property conveyance fee (ORC 319.54(G); ORC 322) is keyed to the recording of a deed conveying title; recording the land installment contract itself is treated under the auditor/recorder process at contract recording, with the conveyance fee due when the warranty deed is later recorded at payoff (verify county auditor treatment — see needs_verification). — ORC 319.54, ORC Ch. 322
  • Mortgage registration tax: Ohio imposes no mortgage registration/recording tax of the Minnesota/New York type; only recording fees and the conveyance fee on deeds apply.

7. Bankruptcy & Death / Divorce

  • Buyer bankruptcy treatment: Circuit split / fact-dependent. A land installment contract may be characterized either as an executory contract (assumable/rejectable under 11 U.S.C. § 365) or, because Ohio treats the buyer as equitable owner with the vendor holding title as security (5313.01; Wood v. Donohue), as a secured-debt / lien arrangement giving the debtor- buyer rights to cure and pay through a Chapter 13 plan. Outcome turns on the equity built and how the bankruptcy court reads the security-retention structure (see needs_verification for a controlling Sixth Circuit holding). — 11 U.S.C. § 365; wood-v-donohue-1999
  • Seller bankruptcy effect: If the vendor (legal-title holder) files, the recorded contract and the vendee’s equitable ownership protect the buyer’s interest; the trustee takes subject to the recorded contract, and the buyer may seek to compel conveyance on payoff.
  • Assignability by buyer: The vendee’s equitable interest is generally assignable; anti-assignment clauses are common and enforceable per their terms (no Chapter 5313 prohibition; contract-governed — see needs_verification).
  • Survivorship on death: The vendee’s equitable interest is real property that passes by will/intestacy (or by survivorship if titled jointly); the vendor’s legal title passes to the vendor’s estate subject to the duty to convey on payoff.
  • Divorce treatment: The vendee’s equitable interest is marital/separate property divisible in an Ohio divorce under ORC 3105.171 like other real-property interests (fact-specific). — ORC 3105.171

8. Case Law (real, verified)

CaseYearTopicHolding (plain English)Source
howard-v-temple-20072007remedies / deficiencyVendor electing forfeiture under ORC 5313.08 is limited to the ORC 5313.10 measure (fair-rental shortfall + deterioration) and cannot get a deficiency judgment; Chapter 5313 is a consumer-protection law preventing a vendor windfall. 172 Ohio App.3d 21, 2007-Ohio-3074, 872 N.E.2d 1260 (1st Dist.).findlaw
wood-v-donohue-19991999equitable interestUnder an Ohio land installment contract the purchaser is the equitable owner the moment the contract is executed, bearing all losses and entitled to all benefits accruing to the property. 136 Ohio App.3d 336, 736 N.E.2d 556 (1st Dist.).courtlistener

9. Edge Cases (state-specific notes)

  • wrap-around-mortgage — Permitted, but ORC 5313.02(B) caps vendor mortgaging above the contract balance without vendee consent; encumbrance disclosure required (5313.02(A)(10)).
  • garn-st-germain-due-on-sale — A CFD transfer can trigger a due-on-sale clause on an underlying loan; federal residential exemptions are narrow for true third-party sales.
  • Dwelling-only scope: Chapter 5313 protections apply only to property improved by a dwelling (5313.01(B)); vacant-land and commercial land contracts fall outside the chapter and are governed by common-law forfeiture — a frequent litigation trap.
  • Recording-deadline default: A vendor who blows the 20-day recording duty (5313.02(C)) exposes itself to a 5313.04 enforcement action and risks a buyer/third-party priority fight.
  • Threshold-day awareness: The 5-year/20% line (5313.07) is the operator’s calendar event — crossing it converts every later default from a fast eviction into a full judicial foreclosure.

10. Operations

  • Where records live: County recorder (recorded contract) and county auditor (copy delivered per 5313.02(C); tax duplicate). Forfeiture/foreclosure judgments and the ORC 5301.331 cancellation instrument are recorded with the county recorder (5313.09).
  • Public-access portals: County recorder and auditor online search portals (e.g., Franklin, Cuyahoga, Hamilton, Montgomery county recorder/auditor sites); Ohio Laws / ORC for statutes.
  • Who may draft (UPL notes): Filling standardized blanks may be done by the parties or a licensed real-estate agent, but drafting/customizing a land installment contract is the practice of law in Ohio; non-attorney preparation for others risks UPL. Use an Ohio attorney for non-standard terms. (See needs_verification for a controlling UPL authority.)
  • Typical costs / timelines: Recording fees + conveyance fee on the eventual deed. Below-threshold forfeiture (5313.05 30 days + 5313.06 10 days + Chapter 1923 eviction docket) typically resolves in weeks; above-threshold foreclosure and judicial sale (5313.07/2323.07) runs months like any Ohio mortgage foreclosure.
  • Key agencies: County recorders & auditors; municipal/county courts (forfeiture) and courts of common pleas (foreclosure); Ohio Dept. of Commerce, Division of Financial Institutions (RMLA/SAFE).
  • Useful forms: ORC 5313.06 notice of forfeiture; ORC 5301.331 instrument of cancellation; general warranty deed at payoff (5313.02(A)(11)).

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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