LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 6113 NOTE PREPARED: Oct 28, 2024
BILL NUMBER: HB 1084 BILL AMENDED:
SUBJECT: Real Estate Land Contracts.
FIRST AUTHOR: Rep. Moed BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: This bill defines "principal dwelling land contract" (contract) as a land contract
for the sale of real property: (1) designed for the occupancy of one to two families; and (2) that is or will be
occupied by the buyer as the buyer's principal dwelling.
This bill provides that a buyer who has completed the buyer's obligations under the contract is entitled to the
homestead deduction regardless of whether the seller has conveyed title.
This bill provides that the seller under a contract must provide the buyer with certain information concerning
any liens that encumber the property at least 10 days before the contract is executed.
The bill sets forth disclosures that must be included in a contract. It requires all preexisting liens on the
property to be satisfied by the seller by the end of the contract term.
The bill provides that a contract must permit a buyer to pay the balance owed and receive the deed at any
time. It prohibits prepayment penalties or additional charges for an early payoff. It provides a three-day
cancellation period for both the buyer and seller. It also allows the seller and the buyer to transfer their
respective interests in the contract to other parties, subject to certain conditions. The bill requires the seller
to provide the buyer with an annual statement of account.
This bill sets forth certain rights and responsibilities of the parties upon default by either the buyer or the
seller. It sets forth acts and omissions constituting violations and establishes remedies for these violations.
The bill provides that a violation of these provisions constitutes an incurable deceptive act that is actionable
by the Attorney General under the Deceptive Consumer Sales Act. The bill authorizes the Attorney General,
in consultation with the Department of Financial Institutions (DFI), to adopt rules to implement these
provisions.
It requires that the executed contract or a memorandum of land contract be notarized.
Effective Date: Upon passage.
HB 1084 1 Explanation of State Expenditures: Rules: The Office of the Attorney General, in consultation with the
DFI, will be permitted to adopt rules to implement the provisions of this bill. This provision’s requirements
are within the agencies’ routine administrative functions and should be able to be implemented with no
additional appropriations, assuming near customary agency staffing and resource levels.
Deceptive Acts: The bill provides that a violation of the principal dwelling land contract law is a deceptive
act. Deceptive acts are actionable by either the Attorney General or the consumer. This may lead to a minor
increase in the administrative workload for the Office of Attorney General.
Explanation of State Revenues: Deceptive Acts: Violations of the bill’s provisions concerning the principal
dwelling land contract law could potentially increase the number of deceptive acts. This bill may increase
revenue to the state General Fund from civil penalties if the number of deceptive acts also increases. Under
current law, a deceptive act is punishable with a civil penalty of $500 per violation. Knowingly committing
a deceptive act is punishable with a civil penalty of $5,000 per violation. Actual increases in revenue are
indeterminable.
Court Fee Revenue: If additional civil cases occur, the state prevails, and court fees are collected, revenue
to the state General Fund will increase. The total revenue per case would range between $100 and $122. The
amount deposited will vary depending on whether the case is filed in a court of record or a municipal court.
The following linked document describes the fees and distribution of the revenue: Court fees imposed in
civil, probate, and small claims cases.
Explanation of Local Expenditures:
Explanation of Local Revenues: Court Fee Revenue: If additional cases occur, revenue will be collected
by certain local units. If the case is filed in a court of record, the county will receive $32 and qualifying
municipalities will receive a share of $3. If the case is filed in a municipal court, the county receives $20,
and the municipality will receive $37. The following linked document describes the fees and distribution of
the revenue: Court fees imposed in civil, probate, and small claims cases.
State Agencies Affected: Office of the Attorney General; Department of Financial Institutions.
Local Agencies Affected: Trial courts, city and town courts.
Information Sources: Indiana Supreme Court, Indiana Trial Court Fee Manual
Fiscal Analyst: James Johnson, 317-232-9869.
HB 1084 2