If you’re not an attorney, any type of contract can seem to be written in a foreign language. That’s because contracts commonly consist of a variety of different legal terms and terminologies that only experienced legal professionals can fully comprehend. When you combine this with land evaluation and parcel contracts, it can be downright mystifying.
Here’s our simple guide to why you want an Arizona attorney for land evaluation and parcel contracts.
Understanding Land Contracts
Land contracts are agreements that are binding contracts which are used to acquire and purchase new land. Land contracts can be used for transactions involving plots on acreage, homes, residential or commercial buildings and other real property.
Land contracts often involve a form of private financing by the owner – in cases where the purchasing party isn’t tendering full payment at the time of sale – and therefore can also be considered as a form of “seller financing.”
Both the seller and the buyer agree to the terms and conditions of the land contract, which outlines the payment process, the payment schedule, and the exact moment when the title will legally transfer from the seller to the buyer via a deed to convey the title and ownership.
Land contracts offer benefits to both buyers and sellers:
- The seller can often negotiate higher prices and stricter terms when privately financing the sale of the land parcel.
- In most cases, a large down payment is required that gives the seller leverage while vesting the interest of the buyer.
- Buyers benefit with low-interest, private financing options that are not based on a buyer’s personal credit history.
- Contracts are commonly arranged that allow the buyer to make private monthly payments to the seller over a predetermined period of time, as set forth in the contract.
You’ll always want an experienced Arizona land contract attorney to review any contract you’re considering for a variety of reasons.
These reasons include:
- The contract you’re signing will include important details such as the down payment, the terms and conditions, contingencies and other common contractual terms that both parties will want to review with an experienced land contract lawyer in Arizona before signing the contract.
- Generic, fill-in-the-blank contracts, which are often referred to as boilerplate contracts, are commonly used in private transactions. While they may be a cheap and convenient option, they do not fully protect either the buyer or the seller’s common interests.
- In many cases, each sale of land is specific and unique. This means you’ll want a competent parcel contract attorney in Arizona to draft the right language for each contract for your real estate transactions.
When Do Buyers Become Owners?
You might be thinking: “Well this is all great, but if I put a down payment in, sign a contract and start making regular payments… when am I actually the owner of this land?”
As you make payments, you are considered to be the holder of an “equitable title.” This means that you have monetary interest in the land and the contract, including any monies tendered for a down payment, which gives you the right to place a lien on the parcel in the amount of your equitable interest, if the seller were to try to sell the property out from underneath you.
While the title would legally stay in the seller’s name until the title is free and clear, the point when you’ve made all of the payments, you’d still have a vested interest in the property in the meantime. Once all the terms and conditions of your contract have been met, however, the deed would be transferred over to your name, and you’d become the sole owner of the property.
What Happens If You Default on Payments?
In some cases, a buyer may default by failing to make the scheduled payments, thus violating the terms and conditions of the purchase contract.
When this happens, the seller has the right to file an action in court called “land contract forfeiture.” This type of a legal action offers a remedy to the seller of the land parcel and can relinquish the equitable interests of the buyer, if the court action is approved. This can result in loss of the down payment and any payments that have been made along the way, giving the seller the ability to relist the parcel and attract future buyers.
Land and parcel contracts can be confusing, and most have terms in them that favor the seller. This is why you always want an experienced land and parcel contract attorney in Arizona to draft and or review any contract before you add your signature to it, binding you to terms that you may not understand.
Land Evaluation & Zoning Classification
The zoning classification is an important element when determining the value of any parcel and the ability for the buyer to develop it accordingly. An experienced attorney will fully evaluate the land and determine the viability of its current zoning and any wiggle room that may exist to increase zoning entitlements in the future.
Lawyers will also take a look at the history of the property and any changes or additions to zoning classifications that have occured in the past. If it is deemed possible to attain higher zoning entitlements, an Arizona zoning attorney will help you create a strategy for the future.
As part of this land evaluation process, an experienced law firm will research:
- Any conditions that affect the zoning
- Any conditions that affect the property value
- Any land use approvals, permits, approved site plans or subdivisional plats
- Any conditional use permits
- Status of the design review
- History of zoning compliance or violations
- A written overview of any existing entitlements
- Assessment of measures that can increase current entitlements
- An overview of any possible challenges that may exist along the way
The attorneys will provide the client with their written analysis of the property’s existing entitlements and the potential opportunities to increase those entitlements, as well as any challenges presented to achieve the development objective.
Contact an Arizona Attorney for Land Evaluation & Parcel Contracts
Zoning laws and land use restrictions in Arizona can be difficult to understand and may have restrictions that can easily go overlooked, leading to unnecessary cost and frustration. Having the proper legal counsel on your side from the start can help you prevent any unwanted setbacks and unforeseeable costs.
MacQueen & Gottlieb, PLC has extensive experience with zoning laws, land evaluation, land use and parcel contracts in Arizona. Our highly experienced team of Arizona real estate attorneys is prepared to help you defend your interests. Contact us today at 602-726-2229 to schedule an initial consultation or make an appointment online.