Forfeiture
Definition and meaning of Forfeiture in real estate.
Forfeiture is the loss of property, rights, or money due to a breach of a legal obligation or a contract.
In more detail
In real estate, this typically occurs when a buyer defaults on a land contract or when a tenant violates a lease agreement. The party in default loses their interest in the property, which often reverts to the owner or lender. Unlike foreclosure, forfeiture under a contract for deed can sometimes happen quickly without a judicial sale, depending on state law. This process serves as a remedy for the non-defaulting party to reclaim control of the asset.
Key facts
| Category | Legal, Titles & Closing |
|---|---|
| Common Trigger | Contract default or lease violation |
| Legal Effect | Loss of property rights or deposit |
| Process Time | Varies by state and contract terms |
A buyer defaults on their monthly payments under a land contract, resulting in the seller reclaiming the property and keeping the accumulated payments as specified in the agreement.
Frequently asked questions
How does forfeiture differ from foreclosure?
Foreclosure is a legal process to sell property to satisfy a debt, whereas forfeiture is the loss of property rights back to the seller under a contract.
Can a buyer stop a forfeiture?
In many states, a buyer can stop a forfeiture by paying the past-due amount during a specific cure period set by state law.
Related terms
Sources & references
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