REAL ESTATE CONTRACTS ARTICLES
CC&Rs Must Be Followed Regarding Neighbor’s Pool Deck
Question: We have owned a home in Chandler for over eight years. Our neighbor recently built a large wooden pool deck next to his swimming pool only five feet from our property line. We were in Colorado for most of the summer while this pool deck was being built. Our neighbors and their guests can now stand on this pool deck and look directly into our backyard. We never had any notice from the HOA or from the neighbor about the construction of this pool deck. Although we recently planted large ficus trees on our property line, this pool deck…
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Specific Legal Description Not Required in Purchase Contract
Question: We have a small commercial brokerage firm in Phoenix. Common brokerage practice in most commercial brokerage firms is not to state a legal description in the purchase contract. Instead, the address and the parcel number are specified, and an exhibit to the purchase contract says “legal description to be inserted by title company.” The reason is that no commercial broker wants to take the risk of inserting in the purchase contract an erroneous legal description, which can be complex and more than two pages. Is a specific legal description required in the purchase contract under Arizona law? Answer: No.…
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Five-Acre Lot Cannot be Landlocked
Question: We own a home on a five-acre lot in Coconino County. A California buyer has just purchased the five-acre lot to the east of us, and plans to build a large home. The California buyer is landlocked, however, and needs access over our property to get to the main road. Do we have to give the California buyer access to the main road? If so, can we get compensation from the California buyer for this access? Answer: The California buyer cannot be landlocked. This principle of law goes back to medieval England when the King wanted to be able…
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Error in Legal Description Requires Re-Recording of Deed
Question: The plat map for our Apache Junction subdivision shows that our home is on Lot 6. In applying for a permit to build a swimming pool six years after we purchased our home, we learned that the legal description on our deed says that our home is on Lot 16. Our seller was an elderly widow, and we think that she recently passed away. Our real estate agent says “no worries,” about the Lot 16 mistake, and that all we have to do now is correct Lot 16 to Lot 6 on our deed, initial the correction, and record…
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Short-Term Rentals Not A CC&R’s-Prohibited ‘Business Activity’
Questions: We live in a nice Glendale neighborhood of 188 homes near the Cardinals stadium. At least twenty of these homes have become short-term rentals (“STRs”). Our CC&Rs require that any amendment to the CC&Rs must have the approval of 75% of the homeowners. We are not sure that we can get 75% approval of the homeowners, as many of the homeowners don’t seem to care about STRs. Our CC&Rs currently prohibit “operation of a business.” The STR homeowners in our neighborhood advertise on AirBnB/VRBO, manage the moving in and out of STRs, and collect rent from the STRs. Isn’t…
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Statute of Limitations Regarding Liability of Sellers and Brokers
Question: Your column recently discussed the liability of the seller for failure to disclose to the buyer that the City of Chandler had not approved the completion of the garage. In another column you discussed the liability of the seller and the real estate broker for failing to disclose to the buyer a leaky roof, or a high concentration of radon gas or land fissures in the neighborhood. If there is liability to the buyer in these scenarios, how long does a buyer have under the statute of limitations to file a lawsuit against the seller or the real estate…
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COVID-19 Addendum to Purchase Contract is Helpful
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…
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Mortgage Lender Generally has the Right to Either Foreclose or Sue
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…
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