Or the seller may have taken a small note in second position, subordinate to first trust deed financing. Maybe the buyer is experiencing overall financial problems. In any event, the buyer goes into default on the seller's carry-back note. This may signal a default on any first trust deed. The buyer continues to collect all rentals from the property.
Maintenance is deferred.
This default places the seller in a difficult situation. Under California law, the seller's one remedy is to foreclose on the trust deed. There is generally no right to pursue the buyer personally to compel payment. The seller will have to secure any remedy through the property. If the seller has subordinated to first trust deed financing, the situation is even more critical.