ARTICLES & NEWS

REAL ESTATE CONTRACTS ARTICLES

Right to Partition As Tenant-In-Common

By Christopher Combs | June 25, 2023

Question: My boyfriend and I bought a home together in Flagstaff five years ago. We agreed that my boyfriend would be the only person on the deed and the mortgage loan because of my poor credit. I paid $10,000 of the $20,000 down payment. Similarly, in the past five years we have paid all mortgage and other home expenses 50-50. I am moving out of our home now to go back to my family in Missouri. My “loser” boyfriend says that, because I was not on the deed and had no liability for the mortgage, I was only a tenant…

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Implied Warranties for New Homes

By Christopher Combs | June 4, 2023

Question: Four years ago we bought a new home in Buckeye from a homebuilder. Last week during heavy rainfall we had a major roof leak. The next day, when we called the homebuilder’s sales representative that sold the home to us, she said that we only had a two-year warranty for our home. She then said that, similar to a two-year warranty for an automobile battery or tires, the homebuilder had no obligation four years later to do any roof repairs. Is our sales representative correct? Answer: No. Under centuries old English and American common law, a homebuilder impliedly warranted…

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Resolving Earnest Money Disputes

By Christopher Combs | May 21, 2023

Question: We signed the standard Arizona Association of Realtors purchase contract (“AAR Purchase Contract”) to buy a home in Glendale. We deposited $12,000 earnest money. The seller, however, didn’t disclose that there was a “pickleball” home next door with loud pickleball tournaments on weekends. Our broker, who is a family friend, told us of this pickleball problem after talking to one of the seller’s neighbors during our home inspection. Therefore, we cancelled the AAR Purchase Contract during the 10-day inspection period. The seller says that we have no right to cancel the AAR Purchase Contract because of a pickleball hobby.…

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Recourse for Unknown Tenants

By Christopher Combs | May 14, 2023

Question: We recently purchased an investment home in the San Tan Valley for $425,000 cash. When our real estate agent showed us the home, this home had some furniture in the living room and in two of the bedrooms. Our real estate agent said that he thought that was furniture left behind by the last owner. Two days later we signed the purchase contract to buy the home. After escrow closed, and we had the keys, we went to the home with two contractors to start the repairs to the home. To our surprise, there was a family of four…

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When Is a Mortgage ‘Due on Sale’ Clause Triggered?

By Christopher Combs | May 7, 2023

Question: Last week we went to an estate planning seminar in our Litchfield Park community center. We now have the forms to transfer our home to a Revocable Living Trust (“RLT”). Our home, however, still has a $220,000 mortgage. In reviewing this $220,000 mortgage, there is a “due on sale clause” in the mortgage that requires us to pay off this $220,000 mortgage if we transfer the title to our home. Is that “due on sale clause” enforceable if we transfer the home into our RLT? Answer: Probably not. Most mortgages (called “deeds of trusts” in Arizona) have a “due…

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Renting Space in a Shopping Center? What You Should Know

By Christopher Combs | April 30, 2023

Question: My wife is renting 1,200 square feet of space for her hair salon in a Gilbert shopping center. The lease for this 1,200 square feet is more than 45 pages long, including exhibits. We have a limited budget, and we cannot afford to have an attorney review this 45-page lease. Are there any key areas of this 45-page lease that my wife should review other than the amount of rent and the term of the lease? Answer: In my opinion your wife should focus on the language in the lease relating to the following five areas: (1) default clause,…

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Lease Renewal Allowed Even With Late Notice of Renewal

By Christopher Combs | April 2, 2023

Question: Nearly five years ago we signed a lease for a 2,500 square foot office suite in a north Scottsdale office building. The five-year lease included an option to renew the lease for another five years, with six months’ notice prior to the expiration of the five-year lease. If the five-year lease is renewed, the only modification of the five-year lease would be a consumer price index (“CPI”) increase in the monthly rent. We want to stay in our office suite for another five years, especially with only a CPI increase in the monthly rent. Therefore, eight months before our lease…

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Mediation Before Litigation Under AAR Purchase Contract

By Christopher Combs | March 13, 2023

Question: We signed the standard Arizona Association of Realtors (“AAR”) contract to purchase a home in north Phoenix and deposited $25,000 earnest money in escrow. We then received the Seller Property Disclosure Statement (“SPDS”) from the seller. On the SPDS, lines 64-68, the seller denied having any prior roof problems. We then closed the purchase of the home. One month later there was a major thunderstorm, and we had major roof leaks in both the living room and the kitchen. A roofing contractor said that we need a new roof at a cost of at least $30,000. Our broker said…

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