One of the most common questions asked by bond for deed sellers is:
“What happens if the buyer stops making payments?”
In Louisiana, this situation is governed by specific statutory requirements, and the process is both structured and protective of all parties.
Mandatory Notice and Cure Period
If a bond for deed buyer fails to make required payments, the seller cannot immediately cancel the contract.
State law requires that the buyer be given:
- A formal notice of default
- Sent by certified mail, return receipt requested
- To the buyer’s last known address
The notice must:
- Clearly state the amount of the default
- Specify that the buyer has 45 days to cure the default
The 45-day cure period is mandated by law.
- It cannot be shortened
- It may be extended if the seller chooses
This period exists to give the buyer a fair opportunity to bring the bond for deed current.
Seller’s Options After the Cure Period
If the buyer:
- Cures the default within 45 days, the bond for deed continues as if no default occurred
- Fails or refuses to cure, the seller then has an option—not an obligation—to cancel the bond for deed
Cancellation Rather Than Foreclosure
Because legal title never leaves the seller’s name during the term of a bond for deed:
- There is no requirement for judicial foreclosure
- There is no lawsuit
- There is no sheriff’s sale
Instead, the seller may:
- Execute a Cancellation of Bond for Deed
- Execute a Cancellation of the Special Mortgage
- File those documents in the parish clerk of court’s office
To complete the cancellation, the seller must provide evidence that:
- The certified default notice was sent
- The 45-day cure period expired
Once recorded, the public records reflect that the bond for deed is no longer in effect.
If the buyer has not vacated the property, which is rare, the matter is handled as an eviction in the same manner as a tenant.
Why This Matters
This procedure is one of the major advantages of a bond for deed compared to conventional seller financing.
With a traditional mortgage or promissory note:
- The seller must file suit
- Obtain a judgment
- Proceed through foreclosure and sheriff’s sale
With a bond for deed:
- Title never left the seller
- Cancellation is administrative, not judicial
- Time, cost, and uncertainty are dramatically reduced
The Bottom Line
If a bond for deed buyer does not pay:
- The buyer is entitled to a statutory 45-day cure period
- The seller must follow strict notice requirements
- If uncured, the seller may cancel the bond for deed without foreclosure
This balances fairness to the buyer with meaningful protection for the seller and is a defining feature of Louisiana bond for deed law.
