What is a Real Estate Contract Forfeiture Action?
A real estate contract is an alternative method to buy sell real estate. The purchaser of the land promises in a written contract to pay a specified price for the land over time. The seller, sometimes referred to as the “vendor,” promises to convey title to the property to the purchaser when all payments under the contract are complete. The real estate contract is a form of seller financing that allows the seller to retain title as security for the purchaser’s payment of the purchase price. If a purchaser has imperfect credit or requires special payment arrangements, a real estate contract may provide a viable alternative option for a purchaser to acquire the property.
The Real Estate Contract is the Seller’s security instrument and generally contains a “forfeiture” provision. If a purchaser defaults on the contract, the forfeiture provision allows the seller to terminate the purchaser’s rights under the contract and retain all payments made to date under the contract as damages. The Washington Real Estate Contract Forfeiture Act, RCW Chapter 61.30 (hereafter “RECFA”), provides a statutory procedure that must be followed in order to forfeit a purchaser’s interest in the contract and reclaim the property.
A seller is required to substantially comply with all procedural steps in the RECFA, including providing notices and recording documents within a specified timeframes. See, e.g., Schultz v. Werelius, 60 Wn. App. 450, 803 P.2d 1334(Div. II 1991). Failure to substantially comply with the procedures under the RECFA could result in the buyer obtaining a court order to set aside or invalidate the forfeiture. Id. As a forfeiture action takes approximately four months to complete, a court order setting aside a forfeiture action can be a very costly setback for the seller.
If you have questions regarding a real estate contract or forfeiture action, a Spokane real estate attorney can help. The attorneys at Wolff, Hislop & Crockett are experienced at real estate practitioners who can assist you with the purchase and sale of real estate, closings, and actions to reclaim real property. Contact us today for a consultation.