What if the Seller Has a Mortgage Greater Than the Land Contract Value?

Is there a remedy if a Seller has a mortgage on a property that is greater than the value of the Land Contract that a Buyer holds on that property?

Ohio Revised Code 5313.02 (16) (B) states that a vendor/seller cannot “hold a mortgage on property sold by a land installment contract in an amount greater than the balance due under the contract, except a mortgage that covers real property in addition to the property that is the subject of the contract where the vendor has made written disclosure to the vendee of the amount of the mortgage and the release price, if any, attributable to the property in question. 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.”

Section 5313.04 then provides, “Upon the failure of any vendor to comply with Chapter 5313. of the Revised Code, the vendee may enforce such provisions in a municipal court, county court, or court of common pleas. Upon the determination of the court that the vendor has failed to comply with these provisions, the court shall grant appropriate relief.”

There is no standardized legal form that can declare a Land Contract null and void because of this mortgage-to-value issue. The remedy lies in the filing of an action in court to have the Land Contract terminated or declared null and void.

As such, if you need legal advice or assistance in determining whether you can or should seek to declare the land contract null and void (which could be a complicated legal action), you may wish to speak to a qualified local attorney.