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Can I sell a commercial bldg w/o charging interest in KS?
I own a bldg in Osawatomie, Ks and I want to sell it, $115,000 with a simple interest of 10% ( a one time charge, not amortization). With a payback of $1,055.00 monthly for 120mo. Can I legally do it this way ??
Asked By Sharon Bickerstaff | Osawatomie, KS | 1366 views | Tips Advice | Updated 7 months ago
Answers (3)
Jason Craig
Coldwell Banker
Sharon, owner financing is possible in Kansas, but the way you structure it really matters. What you’re describing sounds more like a private note than a traditional mortgage, and those details—like charging a flat “one-time” interest versus amortized interest—can get tricky legally. In Kansas, seller-financed deals are done all the time, but they usually follow standard promissory note and mortgage/deed of trust formats to protect both sides. I’d strongly recommend sitting down with a local real estate attorney or title company to draft the paperwork so it’s enforceable and clear for everyone.
- 6 months ago
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Jason Craig
Coldwell Banker
Owner financing a commercial property is essentially a private loan, so you have a lot of flexibility, but you still need to comply with state usury laws and document the transaction properly. In Kansas there is no general interest‑rate cap on commercial loans between sophisticated parties, but there are restrictions on loans secured by a principal residence. You’ll want a written purchase agreement and a promissory note that spells out the sales price, down payment, interest rate, how payments are calculated and when they are due, plus provisions for late fees, default and prepayment. A deed of trust or mortgage should be recorded to secure your interest in the property.
Charging a one‑time 10% fee and then calculating equal monthly payments over 10 years is effectively the same as charging interest, so you should treat it as such. A title company or attorney can prepare an amortization schedule so both parties understand how much of each payment goes to principal and interest and what the balance will be if the buyer pays off early. Depending on your other business activities you may need to comply with Dodd‑Frank and SAFE Act regulations, but those typically apply to seller financing of consumer residential properties rather than commercial buildings.
In short, yes, you can structure seller financing for a commercial building, but use a real estate attorney or experienced title company to draft the documents so the note is enforceable and complies with Kansas law. They can also advise whether your proposed interest and fee structure is permissible and help you file the appropriate security instruments.
Charging a one‑time 10% fee and then calculating equal monthly payments over 10 years is effectively the same as charging interest, so you should treat it as such. A title company or attorney can prepare an amortization schedule so both parties understand how much of each payment goes to principal and interest and what the balance will be if the buyer pays off early. Depending on your other business activities you may need to comply with Dodd‑Frank and SAFE Act regulations, but those typically apply to seller financing of consumer residential properties rather than commercial buildings.
In short, yes, you can structure seller financing for a commercial building, but use a real estate attorney or experienced title company to draft the documents so the note is enforceable and complies with Kansas law. They can also advise whether your proposed interest and fee structure is permissible and help you file the appropriate security instruments.
- 4 months ago
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Karen Burkardt
Realty One Group
Yes, you can sell a commercial building in Kansas with seller financing, but you need to structure it correctly. You can choose to charge interest however you want, but it must be written into a legally binding promissory note and secured by a mortgage or deed of trust on the property. What you describe—a “one-time” simple interest charge at 10% with fixed monthly payments over 120 months—isn’t typical and could be challenged if it isn’t clearly spelled out, since most seller-financed deals use amortization or standard interest accrual. As long as both parties agree in writing, it can be done, but you must comply with Kansas usury laws (which generally allow higher interest on commercial transactions than on consumer loans) and federal disclosure requirements.
Recommendation: Have a real estate attorney draft the promissory note and mortgage documents to make sure your structure is enforceable.
Next step: Confirm with a Kansas attorney or title company that your proposed terms comply with state usury and financing laws before moving forward.
Recommendation: Have a real estate attorney draft the promissory note and mortgage documents to make sure your structure is enforceable.
Next step: Confirm with a Kansas attorney or title company that your proposed terms comply with state usury and financing laws before moving forward.
- 6 months ago
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