An Act To Increase Protections for Land Installment Contracts
Maine Legislature, Session 129, LD 1426
Committee: Judiciary
Sponsors: HARNETT, BELLOWS, COLLINGS, DOUDERA, EVANGELOS, KESSLER, MORALES, PEBWORTH, TALBOT ROSS, WHITE
Amends: 14 MRSA §6203-F, 33 MRSA §481, 33 MRSA §482, 33 MRSA §483

Legislative Document
No. 1426
H.P. 1039
House of Representatives, March 28, 2019
An Act To Increase Protections for Land Installment Contracts
Reference to the Committee on Judiciary suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative HARNETT of Gardiner.
Cosponsored by Senator BELLOWS of Kennebec and
Representatives: COLLINGS of Portland, DOUDERA of Camden, EVANGELOS of 
Friendship, KESSLER of South Portland, MORALES of South Portland, PEBWORTH of Blue 
Hill, TALBOT ROSS of Portland, WHITE of Waterville.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  14 MRSA §6203-F, as repealed and replaced by PL 1991, c. 707, §2, is 
repealed and the following enacted in its place:
§6203-F.  Foreclosure of residential land installment contracts
1.  Foreclosure procedure.  Notwithstanding any other provision of this chapter, if 
the purchaser of real estate under a residential land installment contract who is in 
possession or intends to take possession of the real estate is in default of any of the terms 
of that contract, the seller or the seller's heirs or assigns may foreclose the rights of the 
purchaser in the contract. For purposes of this section, "land installment contract" has the 
same meaning as in Title 33, section 481, subsection 2.
2.  Redemption period.  A judgment for foreclosure under this section must contain 
a 90-day redemption period. Within the redemption period, the purchaser or a person 
claiming under the purchaser may apply to any Justice of the Supreme Judicial Court or 
Superior Court for an extension of time to redeem, and after such notice as the court may 
order, for good cause shown, the court may extend the redemption period to a maximum 
of one year. An extension order is not binding against any person without actual notice of 
the order unless, within the 90-day period, a written notice describing the land, 
identifying the instrument under which foreclosure proceedings have been brought and 
setting forth the fact that application for extension of the redemption period has been 
made is recorded in the registry of deeds in the county in which the land is located. This 
section may not be construed to extend the life of options with an ascertainable time of 
termination.
3.  Foreclosing party as mortgagee.  A seller or other foreclosing party under this 
section is subject to the requirements imposed upon a mortgagee under sections 6101, 
6111, 6321, 6321-A, 6321-B, 6322 and 6322-A.
Sec. 2.  33 MRSA §481, sub-§2, as enacted by PL 1983, c. 368, is amended to 
read:
2.  Land installment contract.  "Land installment contract" means an agreement 
under which the vendor agrees to sell an interest in property to the purchaser and the 
purchaser agrees to pay the purchase price in 5 or more subsequent payments exclusive of 
the down payment, if any, and the vendor retains title to the property as security for the 
purchaser's obligation under the agreement.  Land installment contracts include a bond 
for deed, a contract for the sale of real estate, option contracts for the purchase of real 
property, an agreement for the occupancy of residential real estate in which the occupant 
is required to make an initial payment in excess of 4 times the periodic monthly payments 
required to occupy the premises and an agreement in which a person is induced to occupy 
a property as a primary residence by a promise or offer to grant ownership of the property 
to the person at a future date.  Land installment contracts do not include option contracts 
for the purchase of real property or purchase and sale agreements entered into with the 
good faith expectation of a separate transaction in which a 3rd party or the seller agrees to 
finance the purchase price in a single installment.
Sec. 3.  33 MRSA §482, sub-§1, ¶¶P and Q, as enacted by PL 1983, c. 368, are 
amended to read:
P.  A provision that the purchaser has the right to accelerate or prepay any installment 
payments without penalty, unless agreed to the contrary; and
Q.  A clear and conspicuous provision above the place for the signature of the 
purchaser which that acknowledges receipt by the purchaser of a copy of the land 
installment contract signed by the vendor.; and
Sec. 4.  33 MRSA §482, sub-§1, ¶R is enacted to read:
R.  A statement that the vendor has inspected the property to be conveyed and 
certifies that the property is in compliance with Title 14, sections 6021 and 6021-A.
Sec. 5.  33 MRSA §482, sub-§2, as enacted by PL 1983, c. 368, is amended to 
read:
2.  Recordation.  Within 20 days after the contract has been signed by both the 
vendor and the purchaser, the vendor shall cause a copy of the contract or a memorandum 
of the contract to be recorded at the purchaser's expense in the registry of deeds in the 
county where the property sold under the contract is located.  If a memorandum of the 
contract is recorded, it shall must be entitled "Memorandum of a Land Installment 
Contract" and shall must contain, as at a minimum, the names of the parties, the 
signatures of the parties, a description of the property and applicable time periods.  A 
person other than a vendor and purchaser may rely on the recorded materials in 
determining whether the requirements of this subsection have been met.  If a contract is 
not recorded pursuant to this subsection, the vendor may not enforce the contract.
Sec. 6.  33 MRSA §482, sub-§§4 and 5 are enacted to read:
4.  Vendor is creditor.  A vendor in a land installment contract is a creditor under 
Title 9-A, section 1-301, subsection 17.
5.  Violations.  A violation of this chapter is a violation of the Maine Unfair Trade 
Practices Act. In addition to any other rights and remedies a purchaser may have in the 
law, upon a finding that a violation of this chapter by a vendor has occurred, a court shall 
find one or both of the following:
A.  The purchaser is entitled to recover all actual damages or $1,000, whichever is 
greater; and
B.  The purchaser is entitled to recover the aggregate amount of costs, expenses and 
attorney's fees determined by the court to have reasonably been incurred on the 
purchaser's behalf in connection with the prosecution or defense of the matter.
Sec. 7.  33 MRSA §483 is enacted to read:
§483.  Prohibited acts
1.  Bad faith avoidance.  A person may not in bad faith attempt to avoid the 
application of this chapter including engaging in subterfuge or designing or structuring a 
transaction with the purpose of evading the provisions of this chapter.
2.  Survival of foreclosure.  A land installment contract may not require a purchaser 
to enter into a promissory note or any other financial instrument or obligation that 
survives the foreclosure of the purchaser's interest in the real estate.
SUMMARY
This bill expands the definition of "land installment contracts," creates foreclosure 
procedures for residential land installment contracts that include a 90-day redemption 
period and removes the right to cure of the purchaser and imposes mortgagee 
requirements on the foreclosing party.  This bill also requires the vendor of a land 
installment contract to certify that the property meets the warranty of habitability under 
state law, makes the vendor of a land installment contract a creditor under the Maine 
Consumer Credit Code and, along with other remedies, makes a violation of the 
provisions regarding land installment contracts a violation under the Maine Unfair Trade 
Practices Act.