Ohio's land installment contract chapter, Revised Code 5313, only applies to real property "improved by virtue of a dwelling having been erected" on it. Sell a bare parcel on a land contract and the chapter's best-known rules, the 30-day grace period, the 10-day forfeiture notice and the 5-year or 20% rule that forces a foreclosure sale, do not apply by statute. Put a house on the land, or sell land that already has one, and they do.
This is general information, not legal advice. A real estate attorney in your state can confirm how it applies to you.
For the basics of seller financing, read how a land contract works in general.
Does Ohio's land contract law cover vacant land?
No, based on the definitions. Section 5313.01(A) defines a land installment contract as an executory agreement, not fully performed within a year, under which the vendor agrees to convey title and the vendee pays in installments while the vendor keeps title as security. Option contracts are carved out. Then 5313.01(B): "Property" means real property "improved by virtue of a dwelling having been erected on the real property."
Every protection in the chapter is written around that defined term. Anyone quoting the 5-year rule for "land contracts in Ohio" without this definition is describing improved property, and a seller of raw acreage who reads it that way gets the wrong timeline.
I did not find an Ohio statute that gives a seller of unimproved land a separate default procedure. What controls instead is the contract you sign and Ohio's general law, and that is exactly where an Ohio attorney earns the fee before you sign, not after the buyer misses a payment.
What does Ohio require when the chapter does apply?
If a house or cabin sits on the parcel, 5313.02(A) lists what the contract must contain. The ones that trip sellers:
- Full names and current mailing addresses, the date each party signed, and a legal description.
- The price, any separate service charges, the down payment, the principal balance, each installment, and the interest rate with the method for computing it.
- A statement of any encumbrances, and any pending order of a public agency against the property.
- A promise to deliver a general warranty deed on completion, or another available deed if you cannot give that one.
- A provision that the vendee can pay your mortgage and get credit, if you default on your own loan.
- A provision that you will record the contract, and that the vendee pays taxes and assessments from the contract date unless agreed otherwise.
The contract is signed in duplicate, a copy to each side. Under 5313.02(C) you must record within 20 days after both sign and deliver a copy to the county auditor. If the description is metes and bounds, the county engineer reviews it and notes approval on the contract (5313.02(D)). Section 5313.03 requires a yearly statement showing principal and interest credited and the balance, and no more than two a year on request. And 5313.02(B) bars a mortgage on the property for more than the balance due on the contract without written disclosure.
Do you have to record an Ohio land contract on vacant land?
Recording is the safe move whatever the chapter says. Section 5301.25(A) covers land contracts generally and says an unrecorded one is "fraudulent insofar as" it relates to a later bona fide purchaser with no knowledge of it. A buyer who skips recording risks losing out to a later purchaser who never heard of the deal.
When the contract is paid off or falls apart, section 5301.331 lets the parties cancel, partially release or assign a recorded land contract by writing on the original or the record margin and signing, or by a separate instrument. That is how a buyer who pays for part of a parcel can get a partial release without a new deed.
What happens if the buyer defaults on a dwelling contract?
This is the track the famous rule belongs to, and it runs on dates, not on how you feel about the buyer.
- Thirty days. Forfeiture can be enforced only after 30 days from the default, and the buyer can cure by paying everything currently due in that window (5313.05).
- Written notice. Then you serve a notice identifying the contract and property, listing what is unmet, and saying the contract stands forfeited unless it is cured within 10 days of completed service. Service is by handing it over, leaving it at the home or the property, or registered or certified mail (5313.06).
- The fork. If the buyer has paid for five years or more from the first payment, or has paid 20% or more of the price, you may recover possession only through foreclosure and a judicial sale. You are entitled to sale proceeds up to the unpaid balance (5313.07). If less than five years have passed (and under 20% paid), you may bring a forfeiture and restitution action under chapter 1923 (5313.08).
- The judgment. A judgment for you cancels the contract on a date the court sets and is recorded as an instrument of cancellation (5313.09).
Election matters: section 5313.10 makes termination by 5313.07 or 5313.08 your exclusive remedy, which bars a further suit on the contract except for any shortfall between what the buyer paid and the fair rental value plus damage to the property.
What does the Ohio conveyance fee cost on a land contract?
The county auditor charges a real property transfer fee of $1 or 10 cents for each $100 of value, whichever is greater (ORC 319.54(G)(3)). The grantor pays it, along with any county transfer tax a board of commissioners has levied under chapter 322 (ORC 319.202). On a $60,000 sale at the statutory 10 cents per $100 that is $60, plus any local tax.
Section 319.202 has a land contract wrinkle: if you convey to a third party and the contract has been of record at least twelve months, "value" is the unpaid balance on the contract, and the statement has to show what the buyer already paid. For a deed to the contract buyer at payoff, ask the county auditor how they want the price stated. Our Ohio quitclaim deed guide covers the no-money transfer case.
How are the payments taxed, and who pays property tax?
By contract, but where 5313 applies the statute names the buyer: 5313.02(A)(15) requires a clause making the vendee responsible for taxes, assessments and charges from the contract date unless the parties agree otherwise. Whoever is named on the contract, keep the right to pay the tax yourself and add it to the balance if the buyer does not.
Federal income tax is its own subject; the land contract calculator splits each payment, and how the IRS treats the payments covers reporting.
Is a land contract worth it on vacant land in Ohio?
For the seller, a land contract trades a quick closing for years of risk and a default process that, on bare land, rests on your contract language rather than a statute built for it. If the parcel is paid for and you want out, you can sell land in Ohio for cash and close in 7 to 21 days, with no notice to draft and no clock to watch. The cash route is laid out at sell the land for cash.
FAQs
Does Ohio's land installment contract law apply to vacant land?
Not by its own definition. ORC 5313.01(B) limits the chapter to real property improved with a dwelling, so the 30-day and 10-day steps and the 5-year or 20% foreclosure rule are written for improved property.
How long does a seller have to wait to forfeit an Ohio land contract?
On a dwelling contract, 30 days after default, then a notice giving 10 days to cure (5313.05 and 5313.06). If the buyer has paid five years or 20%, you need a foreclosure sale instead.
Must an Ohio land contract be recorded?
For a dwelling contract, within 20 days of both signatures (5313.02(C)). For any land contract, recording protects the buyer against a later purchaser (5301.25).
Who pays property taxes on an Ohio land contract?
By default the buyer on a dwelling contract (5313.02(A)(15)), and by whatever the contract says on vacant land.