Is a Truth in Lending Form Required with a Land Contract?

The Truth in Lending Act (TILA) applies to Land Contracts to the same extent that it does to other home-secured loan. But that does not mean a form is always required.

Even though Land Contracts may be covered under the TILA, it does not necessarily mean that a written TIL Disclosure Form is required in all Land Contract sales — just as the same is not required in all real estate contract sales.

The Truth in Lending Act applies when four factors or conditions are met:

– a person is offering credit to a third party;

– the person extending the credit makes offers of credit more than 25 times per year or five times per year for transactions secured by real estate;

– the credit transactions include finance charges or written contracts covering more than four installment payments; and

– the person offering the credit is doing so for the borrower’s personal, family, or household purposes.

If these four factors or conditions are not met, a TIL disclosure is not required.

Standard Legal offers an easy to use Land Contract software package. But given the limited need or requirement for such disclosure form, no TIL disclosures are provided with that Land Contract software title.