May have to foreclose on Contract for Deed (need guidance)

[Josh Emory]

I own 5 properties in Topeka, KS. 4 are rentals managed by a company there, and 1 is a Contract for Deed. Anyway, Buyers in the contract for deed have been their 7 years. Payments started getting late in October, and then March's payment was returned for NSF. I have sent them a "Notice of Default" with 14 days to correct. If not corrected our contract says they are to be given a 15 days to vacate the property. I know laws are state specific, but any advice would help in case I need to foreclose. The contract/sale was never recorded on the deed.

For those wanting the horror story on how I got into this Contract for Deed, here you go....

Had all 5 properties rented, 2 two people I knew personally. After about 2 years of owning had to move out of state and hired someone to manage the properties. I couldn't even tell you what my process was for screening the management, but I failed miserably. Things went alright, for close to a year. The house currently in question, the manager said he had an older couple apply, but they were on fixed income and wanted to sign a two or three year lease so they knew they wouldn't have to move or incur additional expenses. Sounded great so we agreed.

Anyways after awhile, payments from management company started coming late. We started having to chase our payments, and fairly quickly decided to fire this guy. That's when the fun started! Turns out he represented himself as the owner of the property and sold it on Contract for Deed to the couple. He had collected a $5000 deposit from them, and also was collecting more from them on a monthly basis that what we had originally been renting it for and pocketing the difference. The contract he signed with them was extremely pro seller, and I think he figured he would eventually foreclose/evict them and we would never know.

The guy was a joke, fraud charges were filed by the DA on him, but going after him for any money would have been a waste of time. I felt bad for the couple, so we signed a new Contract for Deed with them. We raised the price from their original, since we did not get the down payment, but lowered the interest rate that we were charging to something a little more reasonable. In the end this kept their payment the same, I pocketed more on a monthly basis (difference that manager had been stealing) and I have had someone make timely payments for 5 years with no repair expenses on my part. Unfortunately that seems to be coming to an end.