Under an installment land contract, the seller retains which type of title until completion of payments?

Under an installment land contract, the seller retains which type of title until completion of payments?

• A. Legal
• B. Equitable
• C. Certificate
• D. Leasehold

Answer: (A)

In an installment land contract, the seller keeps the legal title to the property until all payments are made. The buyer takes possession and holds equitable title, giving them the right to benefit from the property and to pursue ownership under the contract. The seller’s retention of the legal title serves as security for performance—if the buyer defaults, the seller can enforce the contract and reclaim the property. Once every payment is completed, the seller transfers the deed, and full ownership passes to the buyer. This setup is different from a mortgage, where the lender holds a lien rather than the title.

In an installment land contract, the seller keeps the legal title to the property until all payments are made. The buyer takes possession and holds equitable title, giving them the right to benefit from the property and to pursue ownership under the contract. The seller’s retention of the legal title serves as security for performance—if the buyer defaults, the seller can enforce the contract and reclaim the property. Once every payment is completed, the seller transfers the deed, and full ownership passes to the buyer. This setup is different from a mortgage, where the lender holds a lien rather than the title.