Oregon Land Sales Contract

Use of a Land Sale Contract in Oregon
1. Structure of the Contract
• Buyer (Purchaser): Takes equitable title immediately, gets possession, and agrees to pay the purchase price in installments.
• Seller: Retains legal title until the contract is fully paid.
This is different from a mortgage or trust deed, where title passes to the buyer at closing and the lender only has a lien.

2. The Forfeiture Remedy
Under Oregon law, if the buyer defaults, the seller may elect forfeiture instead of judicial foreclosure. Forfeiture means:
• The contract is canceled;
• The buyer’s interest is terminated;
• The underlying debt is extinguished (the seller can’t sue for deficiency);
• The seller keeps all prior payments (as liquidated damages);
• The buyer loses possession and improvements revert to the seller.
This is a nonjudicial process, It’s defined in ORS 93.905 and governed by ORS 93.905–93.945. Seller may also choose judicial foreclosure, similar to foreclosing a mortgage.

3. Statutory Safeguards for Buyers
• ORS 93.910: Seller cannot enforce forfeiture unless a statutory notice of default is served.
• ORS 93.915: Buyer gets a right to cure (usually 60–120 days depending on how much of the price is already paid). Cure requires paying arrears, costs, and small capped attorney’s fees.
• ORS 93.930: If not cured, seller records an affidavit of forfeiture, which legally ends the buyer’s rights.
• ORS 93.935 & 93.940: Subordinate lienholders must also get notice and have the right to cure to protect their interests.

4. Why Use a Land Sale Contract in Oregon?
• For sellers:
o Keeps legal title until fully paid.
o Faster and less expensive than judicial foreclosure (if default occurs).
o Retains all buyer’s payments if forfeiture happens.

• For buyers:
o Can purchase property without a bank loan.
o Gain equitable ownership and possession upfront.
o Sometimes lower upfront cost compared to conventional financing.