Am I entitled to the equity accrued while purchasing a home on land contract for the last six years?
Answer:
Of course, it all depends on how your contract reads, but probably not.
There are typically two views of how land contracts work, and what view applies depends on the law of the state in which the property is located.
The first view is that the land contract is just that - a contract. In order for you to acquire title to the land, you must satisfy the terms and conditions of the contract. In this case, you have only partially performed, are probably in default (because you have missed monthly payments and the payment of taxes), and in any event are about to default because you will not be able to make the balloon payment. Your default will trigger the right of the seller/land owner to treminate your contract, and in any event, you will not acquire title to the land because the contract will not be fully performed.
In other states, the land sales contract is viewed essentially as a mortgage. In such states, while record title would remain vested in your seller, you would already possess the beneficial ownership interests in the land. Accordingly, courts would view your default as akin to a default under a mortgage, and this would give your seller the right to foreclose. While there theoretically may be some equity left after foreclosure, that is not likely.
So, in short, it depends on the law of the state in which you live, but I suspect that the majority of states would take the "contract" view rather than the "mortgage" view, and even if you are someplace that takes the mortgage view, you probably don't have a ton of equity in the place as you are behind on payments, taxes, etc.
Finally, not to lecture at all, but you may want to consider this from your seller's point of view. You gave your word that you would undertake a certain course of action. You have failed to do that, and the seller seems to have been very understanding (making payments for you, etc.). Now you want to say that even though you have not lived up to your express word, you want money from him, when you have no right to that money based on the contract you voluntarily signed. Just food for thought.
You must think of yourself as a renter, also. Some contracts are set in advance to allow your payments to be applied to the principle. Nothing more. The contractor is entitled to all equities.
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