This is the last article in our series on Oklahoma Contract for Deed.  The last post focused on some of the pros and cons of using a contract for deed in a real estate transaction.  This article delves into an important question – who is responsible for paying the insurance and taxes in a contract for deed situation?

For the most part, the rights and duties of both the parties to a contract for deed are outlined in the instrument itself.  The seller is not obligated to deliver a marketable title to the buyer until the final payment has been made and the loan paid off.  But the question remains – who pays for the expenses such as taxes and insurance during the term of the loan?

Who pays for the taxes and assessments in a contract for deed in Oklahoma?

In a contract for deed arrangement in Oklahoma, the responsibility for paying taxes and assessments typically belongs to the buyer during the contract term.  Despite not obtaining legal title until the final payment, buyers are generally responsible for these expenses.  While some contracts may stipulate that the seller covers taxes and assessments initially, reimbursement by the buyer is often part of such agreements.

Who pays for the homeowner’s insurance in a contract for deed in Oklahoma?

Similar arrangements apply to fire, hazard, or windstorm insurance policies on the property.  Typically, the buyer assumes the responsibility for purchasing these policies.  If the contract requires the seller to procure such policies, then the buyer may need to reimburse the seller for the cost incurred.

The buyer is also solely responsible for obtaining a personal property insurance policy to protect their belongings.  This policy covers personal effects, furniture, clothing, automobiles, and other items owned by the buyer within the property, ensuring comprehensive protection of their possessions.

Who pays for the liability insurance in a contract for deed in Oklahoma?

The contract term may require the buyer to maintain a certain limit of liability insurance, with the seller listed as an additional insured.  This serves to protect both parties, in the event of an injury on the property or a liability suit filed against the buyer.  Additionally, both sides need to review the contract and explicitly state the party that is responsible for obtaining such an insurance policy.

Maintenance and Improvements

It’s usually the buyer’s responsibility to keep the premises in good condition and therefore may not commit waste or cause intentional damage to the property.  Any improvements made on the property by the buyer become part of the real estate and thus become a part of the security for the performance of the contract.

OKC Real Estate Lawyer

If you are thinking about using a contract for deed in a real estate transaction and seek legal counsel, we are here to help.  We can assist you in both types of matters: transactional and litigation.  Although hiring legal counsel is not required to execute a contract for deed, a thorough review of the document will ensure that your interests are protected.  You can contact us online or by telephone to get in touch with an OKC real estate law firm and speak to an Oklahoma real estate lawyer.