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What Is a Bond for Deed in Louisiana?
A bond for deed is Louisiana's version of owner financing: the seller keeps the title until the buyer pays it off. Here is how it works, how it differs from a mortgage, and what it means if you want to sell your payments.
If you sold property in Louisiana and agreed to let the buyer pay you over time, there's a good chance you have a bond for deed rather than a mortgage. The two arrangements look similar from the kitchen table, but they're legally different, and the difference matters if you ever want to sell those payments or if the buyer stops making them.
The short version
A bond for deed is a written contract to sell property, where the buyer takes possession and makes payments, and the seller keeps the title until the price is paid in full. Louisiana law governs these contracts specifically, and they have been common here for generations — particularly for land, rural property, and sales between people who already know each other.
Compare that with a normal owner-financed sale using a mortgage: there, the title transfers to the buyer at closing, and you hold a mortgage as security. If they stop paying, you foreclose.
Bond for deed versus mortgage, in plain terms
- Who holds the title. In a bond for deed, you keep it. With a mortgage, the buyer has it from day one.
- What happens if they stop paying. A bond for deed has its own cancellation process under Louisiana law, which generally requires written notice and a cure period. A mortgage goes through foreclosure.
- Recording. Bond for deed contracts can be recorded in the parish records, and recording protects both sides. Many never are, which causes real problems later.
- Escrow. Louisiana law requires an escrow agent in certain situations, particularly when there's an existing mortgage on the property.
Why people in Louisiana use them
Three reasons come up again and again. The buyer can't get a bank loan — maybe the property is rural, maybe the house needs work no lender will finance, maybe their credit isn't there yet. The seller wants the income and the interest rate. Or the sale is between family, or between a landlord and a long-time tenant, and nobody wanted to involve a bank.
The part that surprises people
A bond for deed is an asset. Those monthly payments have a cash value today, and that value can be sold — all of it, or part of it — to someone who wants the income stream. You don't have to wait fifteen or twenty years to see your money.
Sellers are often surprised by this, because nobody explains it at the closing table. The buyer keeps paying exactly as before; only the destination of the check changes.
What makes a bond for deed worth more
If you're thinking about selling the payments, a few things carry most of the weight:
- A recorded contract. An unrecorded bond for deed is much harder to sell, and sometimes impossible, until it's properly recorded.
- Payment history. Two or three years of on-time payments is worth far more than six months.
- A real down payment. Buyers who put their own money in are the ones who keep paying.
- Clear title. Succession problems, unresolved heirs, or old liens have to be cleaned up first.
- Taxes and insurance current. Unpaid property taxes on a bond for deed property are a problem waiting to happen.
Two mistakes worth avoiding
Not recording the contract. If it isn't in the parish records, your interest isn't protected against third parties, and it complicates everything down the road — including any sale of the payments.
Handling a default informally. Louisiana has a specific process for cancelling a bond for deed. Doing it by handshake, or by changing the locks, creates legal exposure. Talk to a Louisiana attorney before you take any action against a buyer who has stopped paying.
If you're holding one right now
You have three reasonable options. Keep collecting and enjoy the income. Sell all of the remaining payments for a lump sum. Or sell a portion — say the next five years — take cash now, and get the payment stream back afterward.
Which one is right depends on what you'd do with the money and how solid the buyer is. We're glad to put numbers on all three at no cost, and tell you honestly if we think holding is your better move.
One note: this article explains how bonds for deed generally work in Louisiana. It isn't legal advice, and every contract is different. For anything involving a default, a succession, or a title question, talk to a Louisiana attorney.
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