Why Your Contract for Deed Needs Limits
It started like any other real estate deal.
Saul wanted to move on from his old property—a fixer-upper that still had potential. A buyer, Ben, came along, eager to purchase through a contract for deed, promising regular payments in exchange for eventual full ownership. It all seemed like a win-win.
Until the renovations began.
When a “Dream Remodel” Becomes a Nightmare
The buyer —known legally as the vendee—had big plans. He started tearing out walls, gutting bathrooms, and pulling up floors. Halfway through the “remodel,” however, Ben’s money ran out. Work stopped.
What was left behind?
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Exposed wiring
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Torn-out plumbing
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Structural damage
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Building code violations
To make matters worse, Ben stopped making payments—and eventually walked away entirely.
Now the seller, Saul—still the legal owner under a contract for deed—was left holding a property worth far less than before Ben’s “improvements” began.
The Hidden Risk in Poorly Written Contracts for Deed
This kind of situation happens more often than you’d think.
In Minnesota and other states, a contract for deed allows a buyer to take possession of property and make payments directly to the seller, without a traditional mortgage lender involved.
But here’s the catch: unless your contract specifically limits how the vendee can use or alter the property, they may legally start renovations—or even lease it out—without your consent.
A vague or incomplete contract can leave sellers with little recourse when:
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The buyer starts a remodel they can’t finish
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Permits are never pulled (creating code violations)
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Damage occurs during construction
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The buyer defaults before completion
Protect Yourself From Contract-for-Deed Disasters
To avoid becoming the next real estate “horror story,” a seller’s contract for deed should include clear, enforceable terms such as:
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Property use restrictions – Define what changes, if any, the buyer can make.
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Maintenance and repair obligations – Specify who is responsible for upkeep and code compliance.
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Remodeling approval requirements – Require written consent before any construction begins.
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Inspection rights – Allow the seller to inspect periodically to ensure the property isn’t being damaged.
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Default consequences – Make clear what happens if payments stop or work is abandoned.
