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Contract for deed who pays property tax?
Dated: October 26 2023
Views: 731
Brian Zimpel
RE/MAX Professionals | MN Contract for Deed Specialist
Who Pays Property Taxes in a Contract for Deed?
A Contract for Deed (also known as a land contract or installment sale agreement) is a real estate transaction in which the seller retains legal title to the property until the buyer fulfills their payment obligations. One of the most common questions in these arrangements is: Who is responsible for the property taxes?
1. Buyer Responsibility
In most Minnesota agreements, the buyer is responsible for property taxes. This mimics traditional homeownership, where the buyer pays the local tax authority directly or through a contract-established escrow account.
2. Seller Responsibility
While less common, the seller may negotiate to continue paying taxes until the contract is satisfied. This is usually reflected in a higher monthly payment from the buyer to cover the cost.
3. Shared Responsibility
Parties can agree to split the costs. For example, the buyer might pay a specific portion while the seller covers the remainder until the final deed transfer occurs.
Protecting Your Interests
It is essential to clearly outline the responsibility for property tax payments within the written contract. The document should specify:
- Which party is legally responsible for the bill.
- How and when the payments are made.
- Specific consequences for non-payment or late fees.
Consulting with a real estate professional or attorney is strongly advised to ensure your contract complies with all Minnesota laws and regulations.
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Brian Zimpel
Meet Brian Zimpel – Your Trusted Minnesota Realtor Hi, I’m Brian Zimpel, a top-rated realtor with REMAX Professionals, helping buyers and sellers throughout Minnesota and the Twin Cities. Whether....
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