BOND FOR DEED
What Is a Bond For Deed? A contract to sell real property, or a Movable like a car or truck, where the purchase price is paid to the vendor in installments, and the title remains in the name of the vendor until the purchase price is paid in full.
In a recent transaction, I will use two clients, whom I will call John and Theodore. (Not their real names, by the way). So John has a Ford truck, valued at $8,000, and Theodore wants to purchase it, but does not have $8,000 lying around in his bank account. So John used a BOND FOR DEED, to sell it to Theodore.
They came to an agreement that Theodore could spend $343.33 per month, to pay John for 24 months, beginning the 1st of July, 2019, and Theodore would continue to pay John each month without fail until the last payment was made. To make it come out correctly, the final payment would have to be $343.41, since John was charging 1.5% interest on this, to finance for 24 months, or two years.
Just in case anything would happen to the truck during those 24 months, John requires an insurance policy to be carried on the truck, in his name, since the title would remain in John’s name until the truck is paid. The payments will be considered rental payments until the last payment is made, upon which John agrees to transfer the title over to Theodore using any Notary of Theodore’s choice, at Theodore’s expense.
If Theodore defaults on any payments, John will have 45 days to notify Theodore by registered or certified mail. In any event, if Theodore can not, or will not make the defaulted payments good, then John will have the right to cancel the contract by giving Theodore written notice, and Theodore would be required to peacefully return the vehicle to John.
If Theodore cancels the contract, then Theodore will need to pay John the fair rental amount due for the period of time it is used, minus any payments already made, of course.
This arrangement, or agreement works equally well for Immovable, or Real Property.
* If this situation fits with something you want to do, it may work for you as well. If you are not certain, you may need to seek the advice and/or services of one of the many excellent attorneys in Louisiana.