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ALTHOUGH PLAINTIFF DEFAULTED ON A MATERIAL TERM OF AN INSTALLMENT LAND SALE CONTRACT, DEFENDANT WAS NOT ENTITLED TO SPECIFIC PERFORMANCE OR CANCELLATION AND RETENTION OF THE SUBSTANTIAL PAYMENTS WHICH PLAINTIFF HAD MADE, PLAINTIFF WAS ENTITLED TO CONTINUED POSSESSION (THIRD DEPT).

The Third Department, reversing Supreme Court, determined that, although plaintiff had defaulted on an installment land sale contract (re: the payment of school taxes), defendant was not entitled to specific performance and was not entitled to cancellation of the contract and retention of the installment payments:

“[T]he execution of a[n installment] contract for the purchase of real estate and the making of a part payment gives a contract vendee equitable title to the property and an equitable lien in the amount of the payment” … . The contract vendor, in turn, “holds the legal title in trust for the vendee, subject to the vendor’s equitable lien for the payment of the purchase price in accordance with the terms of the contract” … . “Accordingly, the vendee under a land sale contract has acquired an interest in the property that must be extinguished before the vendor can resume possession, notwithstanding whether a provision in the contract provides that in the event of the vendee’s uncured default . . ., the vendor has the right to declare the contract terminated and repossess the premises. A vendor may not enforce his [or her] rights by an action in ejectment, but must instead proceed to foreclose the vendee’s equitable title or bring an action at law for the purchase price” … .

Plaintiff, having made substantial payments to defendant pursuant to the installment land sale contract at issue, acquired equitable title to the property and an equitable lien in the amount of all payments made pursuant to the contract. Thus, despite plaintiff’s default under the contract, defendant cannot obtain relief under the provision of the rider that provides for cancellation of the contract and forfeiture of all monies paid by plaintiff as liquidated damages… . Accordingly, to the extent that defendant’s motion sought a declaration to that effect, it must be denied. Defendant’s remedies are, instead, limited to foreclosing plaintiff’s equitable title or bringing an action at law for the purchase price of the property, neither of which defendant has sought … . Further, because defendant could not summarily cancel the contract and resume possession, plaintiff is entitled to continued possession of the premises during such time. Cloke v Findlan, 2018 NY Slip Op 07220. Third Dept 10-25-18

REAL ESTATE (ALTHOUGH PLAINTIFF DEFAULTED ON A MATERIAL TERM OF AN INSTALLMENT LAND SALE CONTRACT, DEFENDANT WAS NOT ENTITLED TO SPECIFIC PERFORMANCE OR CANCELLATION AND RETENTION OF THE SUBSTANTIAL PAYMENTS WHICH PLAINTIFF HAD MADE, PLAINTIFF WAS ENTITLED TO CONTINUED POSSESSION (THIRD DEPT))/CONTRACT LAW (REAL ESTATE, ALTHOUGH PLAINTIFF DEFAULTED ON A MATERIAL TERM OF AN INSTALLMENT LAND SALE CONTRACT, DEFENDANT WAS NOT ENTITLED TO SPECIFIC PERFORMANCE OR CANCELLATION AND RETENTION OF THE SUBSTANTIAL PAYMENTS WHICH PLAINTIFF HAD MADE, PLAINTIFF WAS ENTITLED TO CONTINUED POSSESSION (THIRD DEPT))/DEBTOR-CREDITOR (REAL ESTATE, INSTALLMENT CONTRACT, ALTHOUGH PLAINTIFF DEFAULTED ON A MATERIAL TERM OF AN INSTALLMENT LAND SALE CONTRACT, DEFENDANT WAS NOT ENTITLED TO SPECIFIC PERFORMANCE OR CANCELLATION AND RETENTION OF THE SUBSTANTIAL PAYMENTS WHICH PLAINTIFF HAD MADE, PLAINTIFF WAS ENTITLED TO CONTINUED POSSESSION (THIRD DEPT))/INSTALLMENT LAND SALE CONTRACT  (ALTHOUGH PLAINTIFF DEFAULTED ON A MATERIAL TERM OF AN INSTALLMENT LAND SALE CONTRACT, DEFENDANT WAS NOT ENTITLED TO SPECIFIC PERFORMANCE OR CANCELLATION AND RETENTION OF THE SUBSTANTIAL PAYMENTS WHICH PLAINTIFF HAD MADE, PLAINTIFF WAS ENTITLED TO CONTINUED POSSESSION (THIRD DEPT))

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