How To Profit In Land Contracts - Part 3 CONTRACT OF SALE With Power of Sale and Request for Notice of Default THIS AGREEMENT made and entered into this day of 20 among herein called VENDOR, and herein called VENDEE, and herein called TRUSTEE. The signature of Vendor and Vendee of this contract shall also constitute their signature of the REQUEST FOR NOTICE OF DEFAULT In accordance with Section 2924(b), Civil Code of California, request is hereby made by the undersigned Vendor and Vendee that (1) a copy of any Notice of Default and a copy of any Notice of Sale under Deed of Trust recorded ____________________in Book ________ Page _____, Document No. ___________, Official Records of ______________________ County, California as affecting the herein described property, executed by _______________________________________________________, as Trustor, in which ____________________________________________________ is named as beneficiary, and ____________________________________________ as Trustee, be mailed to Vendor and Vendee at address immediately below, and (2) a copy of any Notice of Default and a copy of any Notice of Sale Under Deed of Trust recorded _________________________________ in Book ____________________, Page ___________, Document No. ____________________, Official Records of ____________________ County, California as affecting the herein described property, executed by __________________________ ___________________________________________ as Trustor, in which __________________________ ____________________________________________is named as beneficiary, and ___________________ ______________________________________Trustee, be mailed to Vendor and Vendee at address below. Vendee_____________________________________ Vendor _____________________________ Address_____________________________________ Address_____________________________ _____________________________________ _____________________________ To secure the obligations of Vendee herein, Vendor and Vendee hereby grant, transfer and assign to Trustee, in trust, with power of sale, their right, title and interest in the real property situated in the County of _________________________________________, State of California, and described as follows: NOW, THEREFORE, VENDOR AND VENDEE DO HEREBY AGREE AS FOLLOWS: 1. Payment of purchase price (Loan payments included). A. Vendee shall pay to Vendor forthwith the sum of $ as a down payment, B. And Vendee promises to pay to Vendor or order at ____________________________ the sum of $ __________________________with interest thereon at the rate of ___________per annum commencing ________________________ 20___ $______________principal and interest payable ______________________________________________________________________________________ (In this section terms and conditions of the sale would be set forth, including: a. Terms of sale. b. Issuance of title insurance. c. Rights associated with possession. d. Risk of loss. e. Obligations of Vendee. f. Obligations of vendor. g. What constitutes default? h. Steps to be taken in the event of default. i. Rights and obligations of trustee, and j. Wording relating to the substitution of trustee, the binding effect and construction of the contract and the right to compensate for attorney’s fees.) 2. TITLE INSURANCE Upon recordation of this security land contract ____________________________ shall issue a joint protection policy of title insurance (lender’s-owner’s) insuring the Vendor’s and Vendee’s interest herein. 3. POSSESSION (a) Vendor grants to Vendee the possession of said real property, for the term of this agreement, or until the earlier termination of this agreement. (b) Vendor hereby reserves the right, power and authority to collect the rents, issues and profits of said real property. However, Vendor assigns to Vendee the right, prior to any default by Vendee in payment of any indebtedness secured hereby, or in performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Vendor may at any time without notice, either in person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or any part there of, in his own name, sue for or otherwise collect such rents, issues and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney’s fees, upon any indebtedness secured hereby, and in such order as Vendor may determine. The entering upon and taking possession of said property, the collection of such rents, issues and profits and the application there of, as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 4. RISK OF LOSS (a) Vendee assumes all hazards of damage to or destruction of any improvements now or hereafter placed upon said real property and of the taking of such real property or any part there of for public use, and agrees that no such damage, destruction or taking shall constitute a failure of consideration under this contract. (b) Any award of damages from any taking for public use, or from any damage to said real property or any part thereof is assigned to Vendor with the right to apply or release such monies in the same manner and effect as provided for disposition of proceeds of fire insurance. (c) Vendee does hereby indemnify Vendor and Trustee against any and all claims by third parties for personal injury or property damage, and agrees to provide public liability insurance on the premises in an amount not less than $1,000,000.00 naming Vendor as an additional insured. 5. TO PROTECT VENDOR’S SECURITY INTEREST, VENDEE AGREES: (a) To keep said property in good condition and repair, preserve thereon the buildings, complete construction begun, restore damage or destruction, and pay the cost thereof; to commit or permit no waste, no violation of laws or covenants or conditions relating to use, alterations or improvements: to cultivate, irrigate, fertilize, fumigate, prune, and do all other acts which the character and use of said property and the estate or interest in said property secured by this agreement may require to preserve this security. (b) To provide, maintain and deliver to Vendor fire insurance satisfactory to and with loss payable to Vendor. The amount collected under any fire or other insurance policy may be applied by Vendor upon any indebtedness secured hereby and in such order as Vendor may determine, or Vendor may release all or any part there of to Vendee. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (c) To appear in and defend any action or proceeding purporting to affect the security hereof, or the rights or powers of Vendor or Trustee, and to pay all costs and expenses, including cost of evidence of title and attorney’s fees in a reasonable sum, in any such action or proceedings in which Vendor or Trustee may appear. (d) To pay, at least ten days before delinquent, all taxes and assessments affecting said property, including assessments on appurtenant water stock when due, as well as all encumbrances, charges and liens, with interest, on said property or any part there of, which appear to be prior or superior hereto, except as agreed to be paid by Vendor, all costs, fees and expenses of this agreement. Should Vendee fail to make any payment, or to do any act as herein provided, then Vendor, but without any obligation hereof, may make or do the same in such manner and to such extent as Vendor may deem necessary to protect the security hereof. Vendor is authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Vendor or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. (e) To pay immediately and without demand all sums so expended by Vendor, with interest from date of expenditure, at ten percent per annum. 6. VENDOR AGREES: (a) Upon the performance in full by the Vendee, to execute and have acknowledged a Grant Deed, in recordable form, of the real property described in this agreement, vesting the fee title in Vendee, or the Vendee’s successors or assigns, subject only to the liens to be paid by the Vendee, and such other encumbrances accepted, made by or suffered by the Vendee, and to deliver such deed as directed by the Vendee, or his successors or assigns. (b) To pay Vendee any transfer tax required by law. (c) During the existence of this contract, and upon the written demand of the Vendee or his authorized agent made at any time before or within two months after the recording of a notice of default under this contract, or thirty days prior to the entry of a judgment for the enforcement of this contract, and upon the payment of $75.00 therefore, to cause to have prepared and delivered to the person demanding it, a written statement materially setting forth the information required to be supplied by a mortgagee or beneficiary by Section 2943 of the Civil Code of the State of California. (d) To keep current all payments due the underlying Deed(s) of Trust or mortgages. 7. DEFAULT AND ACCELERATION Time is of the essence in the payments agreed to be paid Vendor, and the performance of the agreements made for the protection of the Vendor’s security, and should Vendee fail to make such payment or tender such performance when due, such failure shall constitute a default. Upon the occurrence of any such default, Vendor may declare all sums secured unto Vendor by this agreement immediately due and payable. 8. ELECTION TO SELL Upon the election by Vendor to proceed by Trustee’s Sale, Vendor may elect to declare all sums immediately due and payable by delivering to the Trustee a written declaration of default and demand for sale. Vendor’s copy of this agreement; and all documents evidencing expenditures by Vendor, secured by this agreement. 9. NOTICE OF DEFAULT Vendor shall further deliver to Trustee a written Notice of Default and Election to Sell, which notice shall identify the contract by stating the names of the Vendor and Vendee, and the date of the recording, and the recording reference and shall contain a description of the real property. Such notice shall also contain a statement that a breach of the obligations secured by such agreement has occurred, and shall set forth the nature of such breach and the election by the Vendor to sell or cause such property to be sold to satisfy the obligations secured by this agreement, if the default is curable under the provisions for reinstatement set forth in this agreement, such Notice of Default shall further contain a statement substantially in the form set forth in paragraph (1) of subdivision (b) of Section 2924(c) of the Civil Code of the State of California. 10. POWER OF SALE The only power the Trustee has under this agreement is to exercise the power of sale in the event of a default by the Vendee. The Trustee shall have no power to convey Vendor’s interest to Vendee upon fulfillment of Vendee’s obligations hereunder. 11. PROCEDURE FOR SALE (a) Trustee shall cause to filed for record in the office of the Recorder of each county wherein the real property, or some part or parcel thereof, is situated an executed copy of the Notice of Default. (b) Any person desiring a copy of any notice of default and/or of any notice of sale under this Contract may, at any time subsequent to recordation of this Contract, and prior to recordation of notice of default thereunder, cause to be filed for record in the office of the recorder of any county in which any part or parcel of the real property is situated, a duly acknowledged request for a copy of such notice of default and of sale. This request shall be signed and acknowledged by the person making the request, specifying the name and address of the person to whom the notice is to be mailed, shall identify the Contract by stating the names of the parties thereto, the date of recordation thereof and the book and page where the same is recorded or the recorder’s number and shall be substantially in the form set forth in Civil Code Section 2924(b). The Vendor, Trustee or other person authorized to record the notice of default, shall, within 10 days following recordation of such notice of default, deposit, or cause to be deposited, in the United States Mail, an envelope, registered or certified and with postage prepaid, containing a copy of such notice with the recording date shown thereon, addressed to the Vendee, at the address set forth in this agreement and to each person, including Vendee, whose name and address is set forth in a duly recorded request therefor, directed to the address designated in said request. And at least 20 days before date of sale the Vendor, Trustee or other person authorized to make the sale shall deposit, or cause to be deposited, in the United States Mail, an envelope registered or certified and with postage prepaid, containing a copy oif the notice of the time and place of the sale, addressed to each person whose name and address is set forth in a request therefor recorded, within the time herein provided. (c) Whenever all or a portion of the principal sum of any obligation secured by this Contract has, prior to the maturity date fixed in such obligation, become due, or been declared due by reason of default in payment of interest or of any installment of principal, or by reason of failure of Vendee to pay, in accordance with the terms of such obligation or of such Contract, taxes, assessments, premiums for insurance or advances made by Vendor in accordance with the terms of such obligation or of such Contract, the Vendee or his successor in interest in the property or any part thereof, or any beneficiary under subordinate deed of trust, or any other person having a subordinate lien or encumbrance of record thereon, at any time within three months of the recording of the notice of default under this Contract, may pay to the Vendor or successors in interest, respectively, the entire amount then due under the terms of such Contract and Trustee’s or attorney’s fees actually incurred, (or one half of one percent of the unpaid principal sum secured whichever is greater) other than such portion of principal as would not then be due had no default occurred and thereby cure the default theretofore existing, and thereupon, all proceedings theretofore had or instituted shall be dismissed or discontinued and the obligation and Contract shall be reinstated and shall be and remain in force and effect the same as if no such acceleration had occurred. (d) Before any sale of property can be made under the power of sale contained in this Contract, notice of the sale thereof must be given by posting a written notice of the time and place of sale, and describing the property to be sold, at least 20 days before the date of sale, in one public place in the city where the property is to be sold, if the property is to be sold in a city, or, if not, then in one public place in the judicial district in which the property is to be sold, and publishing a copy thereof once a week for the same period, in some newspaper of general circulation published in the city in which the property or some part there of is situated, if any part thereof is situated in a city, if not, then in some newspaper of general circulation published in the judicial district in which the property or some part thereof is situated , or in case no newspaper of general circulation is published in the city or judicial district, as the case may be, in some newspaper of general circulation published in the county in which the property or some part thereof is situated. A copy of such notice of sale shall also be posted in some conspicuous place on the property to be sold at least 20 days before date of sale. In addition to any other description of the property, the notice shall describe the property by giving its street address, if any, or other common designation, if any; but if a legal description of the property is given, the validity of the notice shall not be affected by the fact that the street address or other common designation recited is erroneous or that the street address or other common designation is omitted. The term newspaper of general circulation is used herein is as defined in Article 1 (commencing with Section 6000) of Chapter 1, Division 7, Title 1 of the Government Code. (e) All sales of property under the power of sale contained in this Contract shall be held in the county where such property or some part thereof is situated, and shall be made at auction, to the highest bidder, between the hours of 9 in the morning and 5 in the afternoon. When the property consists of several known lots or parcels they shall be sold separately upon request of Vendee or any lien creditors with liens junior to Vendor, or when a portion of such property is claimed by a third person, and he requires it to be sold separately, such portion may be thus sold. The Vendee if present at the sale, may also direct the order in which property shall be sold, when such property consists of such several known lots or parcels which may be sold to advantage separately, and the Trustee shall follow such direction. After sufficient property has been sold to satisfy the indebtedness no more can be sold. The remainder of the property shall then be conveyed by Vendor to Vendee. If the property under the power of sale is in two or more counties, the public auction sale of all the property under the power of sale may take place in any one of the counties where the property, or a portion thereof, is located. There may be a postponement of the sale proceedings at any time prior to the completion of the sale thereof at the discretion of the Trustee, or if the Vendor instructs the Trustee to postpone the sale proceedings. The notice of each postponement shall be given by public declaration by the Trustee at the time and place last appointed for sale. Such public declaration of the postponement shall also set forth the new date, time, and place of sale, which place of sale shall be the same place as originally fixed by the Trustee for the sale. No other notice of postponement need be given. (f) (i) Each and every bid made by a bidder at a trustee’s sale under the power of sale contained in this Contract shall be deemed to be an irrevocable offer by the bidder to purchase the property being sold by the Trustee under such power of sale for the amount of the bid. Any second or subsequent bid by the same bidder or any other bidder for a higher amount shall be a cancellation of the prior bid. (ii) At the Trustee’s sale the Trustee shall have the right (1) to require every bidder to show evidence of his ability to deposit with the Trustee the full amount of his final bid in cash, or the equivalent of cash in a form satisfactory to the Trustee prior to and as a condition to the recognizing of such bid, and to conditionally accept and hold these amounts for the duration of the sale, and (2) to require the last and highest bidder to deposit, if not deposited previously, the full amount of his final bid in cash, or the equivalent of cash in the form satisfactory to the Trustee, immediately prior to the completion of the sale, the completion of the sale being so announced by the fall of the hammer or in any other customary manner. (iii) If the Trustee has not required the last and highest bidder to deposit the cash or equivalent in the manner set forth in subparagraph (ii) of subparagraph (f) above, the Trustee shall complete the sale. If the last and highest bidder then fails to deliver to the Trustee, when demanded, the amount of his final bid in cash, or the equivalent of cash in a form satisfactory to the Trustee, such bidder shall be liable to the Trustee for all damages which the Trustee may sustain by the refusal to deliver to the Trustee the amount of the final bid, including any court costs and reasonable attorney’s fees. (iv) Any postponements or discontinuance of the sale proceedings shall be a cancellation of the last bid. (g) Any person including the Vendor, Trustee and Vendee may purchase at such sale. (h) Trustee shall deliver to such purchaser its deed conveying the real property so sold but without any covenant or warranty, expressed or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. This document and accompanying materials are designed to provide authoritative information in regard to the subject matter covered in it. It is for illustration purposes only and presented with the understanding that the author and publisher are not engaged in rendering legal, accounting or other professional opinions. If legal advice or other expert assistance is required, the services of a competent professional should be sought. | 
