Life happens. Even buyers with great intentions sometimes miss a land contract payment. It's not the end of the world, but how it gets handled matters.
Here's exactly how it works with us, what's reasonable to expect from any owner-financed seller, and what to do if you find yourself behind.
Day 1–10 after the missed payment
A monthly payment due, say, on the 15th, isn't actually "late" until a grace period passes. On our contracts, that grace is 10 days. So a payment due on the 15th becomes formally late on the 26th.
During those 10 days:
- Lendiom sends automatic reminders — usually email and SMS — at days 3, 7, and 9 past due.
- We don't call you yet. The reminders are doing their job.
- No late fee yet.
If you pay during this window, life goes on. The payment is recorded as on-time-within-grace and there's no permanent record of a problem.
Day 11–20: Late, but workable
Once the payment is past the grace period:
- A $35 late fee is automatically applied to your balance.
- We call you. A real phone call from one of us, not a 1-800 number. Usually a single call, friendly, asking what's going on.
- We listen. Job loss? Medical issue? Just forgot? We've heard all of it. The conversation determines what happens next.
What we're trying to figure out: Is this a one-time blip, or a longer-term issue?
If it's a blip:
- We agree on a date to catch up.
- The late fee stays applied (sorry, that's automated).
- No further action.
If it's longer-term:
- We talk options. Could you make a half payment this month? Could we extend the catch-up over 2–3 months? Could we restructure the payment temporarily?
- We almost always work it out. We've done some version of this with quite a few buyers.
Day 21–30: Officially behind
If we're past day 20 and we haven't reached you, or we've reached you but no plan is in place:
- Lendiom continues sending late notices.
- We typically send a written letter explaining the contract status and asking for response.
- A second late fee may apply if a second monthly payment becomes past due.
This is the point at which the contract is officially in a default situation, but it's still recoverable. We've worked with buyers who fell well behind and recovered fully. The key is communication.
Day 31+: Default and remedies
If we still haven't heard from you and payments are continuing to miss:
- A formal notice of default may be sent, in writing, certified mail.
- The notice will state how much is owed, the deadline to cure, and the next steps if not cured.
- The cure period (the time you have to catch up) is typically 30 days.
If the cure period passes without payment or a workout agreement:
- The contract may be terminated for cause.
- The lot reverts to us.
- Equity in payments made up to that point may be forfeited under contract terms (courts will look at fairness, but the contract terms generally control).
We have not had this happen on a lot we sold without first making genuine effort to work with the buyer. We've also not had it happen to a buyer who was honestly communicating with us.
Things we will NOT do
Some commitments we make to every buyer:
- We won't show up unannounced at your home or workplace.
- We won't call your employer.
- We won't post your information online.
- We won't sell your debt to a third party collector.
- We won't make threats. Ever.
- We won't add fees the contract doesn't authorize.
- We won't terminate without written notice and a cure period.
Some of those are basic legal requirements; some are just our standards. Either way, we mean them.
What to do if you know you're going to miss
If you know in advance — say, your hours got cut, you have an unexpected expense, you're about to switch jobs — call us before the payment is due.
A heads-up call works wonders:
- We can document the situation.
- We can adjust the payment plan temporarily.
- We can sometimes accept a partial payment to bridge.
- We can avoid the automatic late fee in some cases.
The buyers we struggle with are the ones who go silent. The buyers we've worked through hard times with are the ones who picked up the phone.
What if I just can't pay anymore?
Sometimes life changes more than a temporary fix can solve. Job loss becomes permanent, health issues become chronic, families split, plans change.
If you reach the point where the contract isn't going to work anymore, the path is simple: hand it back.
You reach out to us, we send you a cancellation agreement, you sign it, and the contract is cancelled. The lot reverts to us, you're released from further obligation, and you walk away clean — no collections, no court, no debt following you.
The payments you've made stay with us, the same way payments on a financed vehicle stay with the lender. That's exactly why we tell every buyer to choose a lot whose payment fits comfortably. There's no shame in a cancellation — life happens, plans change, situations evolve. We'd just rather you call us early so we can handle it cleanly together.
If you'd rather not walk away, one more honest option: the day the contract is paid in full, the land is yours to sell. You can read more here: Can I sell my land while I'm still paying for it?
What we tell new buyers
Two things, every time:
- Set up automatic ACH payments through Lendiom from day one. It eliminates 90% of accidental missed payments.
- Keep a small reserve. Even a month or two of payments in savings handles most short-term gaps. We have a post on budgeting for rural land purchases that talks about reserves.
The goal isn't to never have a tough month. The goal is to handle the tough month well.
Communication is the rule
If you take one thing from this post: call us. Don't go silent.
Every successful workout we've ever done started with a phone call. Every contract we've ever had to terminate started with a buyer who stopped responding.
Our number: (205) 202-9620. Text or call. Day or night.
— Providential Real Estate