Delaware Code Title 25 Sec. 314 – Contract requirements for the sale of real estate involving seller …
(a) Every contract for the sale of improved or unimproved real estate under which the seller or sellers agree to provide any financing for the purchaser or purchasers shall include as an integral part of the contract a complete amortization schedule for all payments to be made under such financing agreement. Such amortization schedule shall:
(1) Include a per payment breakdown of principal and interest and a per payment computation of the unpaid principal balance remaining;
(2) Include a statement that the seller or sellers and purchaser or purchasers have read and understand the amortization schedule; and
(3) Be signed by the seller or sellers and purchaser or purchasers.
Terms Used In Delaware Code Title 25 Sec. 314
- Amortization: Paying off a loan by regular installments.
- Contract: A legal written agreement that becomes binding when signed.
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- State: means the State of Delaware; and when applied to different parts of the United States, it includes the District of Columbia and the several territories and possessions of the United States. See Delaware Code Title 1 Sec. 302
(b) Every contract for the sale of improved or unimproved real estate under which the seller or sellers agree to provide any financing for the purchaser or purchasers shall clearly state the principal amount of seller financing, exclusive of interest, which comprises the purchase price thereunder, and the amount of any interest to accrue under said seller financing shall not be included in the purchase price stated thereunder.
(c) No contract for the sale of consumer purpose property under which the seller or sellers agree to provide any financing for the purchaser or purchasers, unless specifically permitted by preempting Federal law or regulation, shall remain executory for a period exceeding 6 months. The parties may renew the executory contract, by written agreement, for a period not exceeding more than an additional 6 months. The time between execution and final settlement of such a contract shall be no longer than those combined time periods. For purposes of this subsection “final settlement” shall mean a transaction wherein the seller conveys or sellers convey a deed to the residential real estate to the buyers in return for payment amounting to the purchase price, which may include a mortgage in the amount of any financing extended by the seller or sellers. For purposes of this subsection “consumer purpose property” shall mean 1-to-4-family residential real property used primarily for personal, family or household purposes, and shall not include any other property, including multi-unit residential property such as an apartment building, office property, commercial property or industrial property.
(d) Notwithstanding the provisions of subsection (c) of this section, the parties may agree, under the contract of sale to not engage in a final settlement until fulfillment of a condition of paying the last installment of the purchase price under a conditional sale, provided that the conditional sales agreement includes provisions indicating:
(1) The periodic rental value of the real estate, which is not to exceed 75% of the original periodic installment amount under the conditional sales agreement;
(2) In the event of buyer or buyers default for failure to pay, the buyer or buyers have a right to redeem the property by making full payment of the remaining contract amount within 120 days of the seller or sellers providing written notice of the default;
(3) If, after default, the buyer or buyers fail to redeem the property by full payment within 120 days, the contract converts by law to a landlord/tenant agreement, wherein rent shall be the rental value established in paragraph (d)(1) of this section above and which shall apply retroactive to the date of default;
(4) In the event of the agreement being converted to a landlord/tenant agreement after default, any amount paid by the buyer or buyers as a down payment on the conditional sales agreement shall be deemed a security deposit, with any amount exceeding that allowed by § 5514 of this title first being credited towards arrears in rent and any remainder excess paid to the tenant.
(e) Failure to comply with the requirements of either subsection (a), (b) or (c) of this section shall make the contract voidable at the option of either party to the contract prior to settlement.
(f) Failure to comply with the requirements of subsection (d) of this section shall make the contract voidable by the buyer or buyers under the conditional sales agreement at any time prior to the payment of the last installment under the agreement, unless in default for failure to pay under the agreement, under which circumstance the agreement shall be voidable by either party until such time as the conditional sales agreement is converted to a landlord/tenant agreement.
(g) In the event of a dissolution of an agreement under conditions stated in subsection (d) or (f) of this section, the Justice of the Peace Court shall have concurrent jurisdiction with the Court of Chancery to hear and adjudicate cases brought to enforce the rights of parties in the property, including, but not limited to, an action for an accounting.
68 Del. Laws, c. 227, § ?1; 76 Del. Laws, c. 311, §§ ?1-3; 78 Del. Laws, c. 128, §§ ?1, 2;