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COVID-19

COVID-19 Addendum to Purchase Contract is Helpful

By Christopher Combs | November 22, 2020

Question: In your recent column the buyer of an expensive Carefree home no longer wanted to close escrow on the home because the COVID-19 crisis caused a change in the buyer’s financial circumstances. The buyer wanted to cancel the transaction and forfeit the $25,000 earnest money. Under the standard Arizona Association of Realtors (“AAR”) Purchase Contract, however, the seller had the right to either accept the $25,000 earnest money, or to release the $25,000 earnest money and sue the buyer for actual damages. The seller had released the $25,000 to the buyer and filed a lawsuit against the buyer for $100,000 in damages because of the COVID-19 crisis. The home allegedly lost $100,000 in value. We have a small Chandler brokerage firm and we use the AAR COVID-19 Addendum (“COVID-19 Addendum”) in every transaction to bring awareness to both the seller and the buyer about this COVID-19 crisis. Wouldn’t the…

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open land

Mortgage Lender Generally has the Right to Either Foreclose or Sue

By Christopher Combs | November 15, 2020

Question: We bought forty acres of land in Coconino County five years ago for $200,000. We made a $20,000 cash down payment, and the seller did seller carryback financing of $180,000, plus ten percent interest, all due in five years. Although the forty acres of land in Coconino County was to be part of a large development of homes, five years later the forty acres of land is basically worthless. We have tried several times to negotiate the balloon payment of $180,000 with the seller. The seller has refused to negotiate with us, and now has filed a lawsuit against us to collect $180,000, plus interest and legal fees. We are shocked. We thought that, if we didn’t pay the $180,000 payment in five years, the seller would just foreclose on our forty acres of land. Can the seller sue us to collect $180,000, plus interest and legal fees, instead…

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