II 

118TH CONGRESS 

2D SESSION S. 3720 

To amend the Consumer Credit Protection Act to provide for additional 

requirements for land installment contract transactions. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 1, 2024 

Ms. SMITH (for herself and Ms. LUMMIS) introduced the following bill; which 

was read twice and referred to the Committee on Banking, Housing, and 

Urban Affairs 

A BILL 

To amend the Consumer Credit Protection Act to provide 

for additional requirements for land installment contract 

transactions. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Preserving Pathways 

5 to Homeownership Act of 2024’’. 

6 SEC. 2. LAND INSTALLMENT CONTRACTS. 

7 The Consumer Credit Protection Act (15 U.S.C. 

8 1601 et seq.) is amended by adding at the end the fol9 lowing: 


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1 ‘‘TITLE X—LAND INSTALLMENT 

2 CONTRACTS 

3 ‘‘§ 1001. Findings and purposes 

4 ‘‘(a) FINDINGS.—Congress finds the following: 

5 ‘‘(1) Land installment contracts, when used to 

6 purchase a home, are a form of consumer credit 

7 transaction under the Truth in Lending Act (15 

8 U.S.C. 1601 et seq.) in that the contracts create a 

9 debt, which is the purchase price, and defer the pay10 ment of the debt. 

11 ‘‘(2) The lack of recordation of land installment 

12 contracts in real estate records subjects buyers to 

13 the risk of other creditors superseding their interest 

14 in the land despite the extensive investment of the 

15 buyer in the home. 

16 ‘‘(3) The frequency of use of land installment 

17 contracts varies by region. States differ in treatment 

18 of how the contracts are recorded and the use of for19 feiture and foreclosure to terminate the contracts. 

20 Buyers, therefore, are afforded different protections 

21 because of the location of the property they pur22 chase, making this an issue that Congress must ad23 dress. 

24 ‘‘(4) Land installment contracts involve inter25 state commerce because credit is often extended 


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1 across State lines by the sellers or to the sellers to 

2 finance the acquisition of the home in order to offer 

3 it for sale through a land installment contract. Buy4 ers entering into land installment contracts are fre5 quently solicited over the phone, through the mails, 

6 through internet advertisements, and through other 

7 electronic communications. Buyers use interstate 

8 commerce to enter into the transaction, to make 

9 payments on the transaction, and to obtain parts 

10 and services required to make repairs to the home 

11 as contemplated by the transaction. 

12 ‘‘(b) PURPOSES.—The purposes of this title are— 

13 ‘‘(1) to ensure basic consumer protections in 

14 land installment contract transactions to ensure that 

15 buyers have their interests in the home protected 

16 from other creditors or claimants in the real estate 

17 market; and 

18 ‘‘(2) to protect consumers against unfair for19 feitures of equity after making payments through a 

20 consumer credit transaction. 

21 ‘‘§ 1002. Definitions 

22 ‘‘In this title: 

23 ‘‘(1) COVERED LAND INSTALLMENT CONTRACT

24 TRANSACTION.—The term ‘covered land installment 

25 contract transaction’ means a sale of residential real 


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1 property involving a land installment contract, if the 

2 residential real property has not been the principal 

3 place of residence of the seller during the preceding 

4 2 years. 

5 ‘‘(2) LAND INSTALLMENT CONTRACT.—The 

6 term ‘land installment contract’ means an agreement 

7 under which— 

8 ‘‘(A) a seller agrees to sell an interest in 

9 real property to a purchaser; 

10 ‘‘(B) the purchaser agrees to pay the pur11 chase price in installments; and 

12 ‘‘(C) the seller retains title to the real 

13 property as security for the obligation of the 

14 purchaser under the agreement. 

15 ‘‘(3) SELLER.—The term ‘seller’ means— 

16 ‘‘(A) an individual or entity selling an in17 terest in residential real property; 

18 ‘‘(B) any party related to the seller, as de19 fined by section 267(b) of the Internal Revenue 

20 Code of 1986; and 

21 ‘‘(C) any assignee or transferee of a seller 

22 not described in subparagraph (B). 


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1 ‘‘§ 1003. Governance of land installment contract 

2 transactions 

3 ‘‘(a) IN GENERAL.—The States shall, not later than 

4 2 years after the date of enactment of this title, enhance 

5 consumer protection for covered land installment contract 

6 transactions by enacting the requirements described in 

7 subsections (b) and (c). 

8 ‘‘(b) RECORDATION.— 

9 ‘‘(1) IN GENERAL.—The seller in a covered land 

10 installment contract transaction shall record the ex11 ecutory contract with the office where deeds are re12 corded not later than 5 days after the date on which 

13 the contract is executed. 

14 ‘‘(2) STATES.— 

15 ‘‘(A) IN GENERAL.—The States shall, by 

16 law (including regulations) deter noncompliance 

17 with the recordation requirement by— 

18 ‘‘(i) prohibiting the seller from com19 pelling performance of the land installment 

20 contract or exercising remedies pursuant to 

21 the contract if the contract is not recorded 

22 in accordance with paragraph (1); 

23 ‘‘(ii) providing the buyer the right to 

24 rescind the land installment contract and 

25 receive a refund for any payments made to 


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1 the seller in connection with the land in2 stallment contract transaction; 

3 ‘‘(iii) providing that any violation of 

4 the requirements imposed in compliance 

5 with this paragraph shall give rise to liabil6 ity in the same manner and by the same 

7 means as under paragraphs (1) and (2) of 

8 section 140(a) of the Truth in Lending Act 

9 (15 U.S.C. 1640(a)); and 

10 ‘‘(iv) providing authority to enforce 

11 compliance with the recordation require12 ment to an appropriate enforcement body. 

13 ‘‘(B) ADDITIONAL PENALTIES FOR NON14 COMPLIANCE.—Nothing in subparagraph (A) 

15 shall prevent a State from imposing additional 

16 penalties for noncompliance if the penalties are 

17 greater than the potential harm a purchaser 

18 may suffer, or the gain a seller may realize, as 

19 a result of the failure of the seller to record a 

20 contract in accordance with paragraph (1). 

21 ‘‘(c) PROTECTION OF PURCHASER’S EQUITY.—If a 

22 purchaser defaults, the seller may liquidate the interest 

23 of the purchaser in the property pursuant to the residen24 tial mortgage foreclosure law of the State, including all 

25 notice and curative requirements therein. The seller may 


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1 not enforce the remedy of rescission or forfeiture and no 

2 such remedy within a land installment contract shall be 

3 binding on the purchaser. 

4 ‘‘(d) REGULATIONS.—If the Director of the Bureau 

5 of Consumer Financial Protection determines that a State 

6 does not have the requirements described in subsections 

7 (b) and (c) in effect by law (including regulations) on the 

8 date that is 2 years after the date of enactment of this 

9 title, the Director shall adopt rules applicable to that State 

10 that achieve the purposes of subsection (a) that are con11 sistent with the standards adopted in the States that have 

12 the requirements of subsections (b) and (c) in effect. The 

13 Director may extend the deadline under this subsection 

14 for not more than 1 year if a State has shown a good 

15 faith effort towards implementation. The Director may 

16 promulgate regulations to monitor State compliance with 

17 this section. 

18 ‘‘(e) APPLICABILITY.—The requirements described in 

19 subsections (b) and (c) shall only apply to covered land 

20 contract transactions entered into after such requirements 

21 are in effect by law (including regulations).’’. 

Æ 


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