Contract for Deed (Land Contract) - Arizona

CONTRACT FOR DEED (LAND CONTRACT)

(State of Arizona)

TABLE OF CONTENTS

1. Parties
2. Recitals
3. Property and Legal Description
4. Purchase Price and Payment Terms
5. Interest, Amortization, and Balloon
6. Prepayment
7. Possession
8. Taxes, Insurance, and Maintenance
9. Title; Account Servicing Agent; Payoff Deed
10. Recording of Contract / Memorandum
11. Existing Encumbrances; Due-on-Sale / Wrap Warning
12. Risk of Loss; Casualty; Condemnation
13. Default and Remedies (Arizona — Forfeiture Schedule)
14. Assignment
15. Disclosures
16. General Provisions
17. Signatures and Acknowledgment
18. Exhibits

1. PARTIES

THIS CONTRACT FOR DEED (this "Contract") is made and entered into as of [__/__/____] (the "Effective Date") by and between:

• [SELLER LEGAL NAME], of [SELLER ADDRESS] (the "Seller", also the "Vendor"); and
• [BUYER LEGAL NAME], of [BUYER ADDRESS] (the "Buyer", also the "Purchaser" or "Vendee").

Seller and Buyer are each a "Party" and together the "Parties." As used herein, "Seller" and "Purchaser" have the meanings given in A.R.S. § 33-741.

2. RECITALS

A. Seller owns legal title to the real property described in Section 3 (the "Property").

B. Buyer desires to purchase, and Seller to sell, the Property under a contract for conveyance of real property within the meaning of A.R.S. § 33-741, whereby Seller conveys equitable title to Buyer and retains legal title as security until the full Purchase Price is paid.

C. The Parties intend that this Contract be governed by A.R.S. §§ 33-741 to 33-750.

NOW, THEREFORE, in consideration of the mutual covenants below and other valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:

3. PROPERTY AND LEGAL DESCRIPTION

3.1 Property. Seller agrees to sell and Buyer agrees to buy the real property commonly known as [STREET ADDRESS, CITY, ARIZONA, ZIP], together with all improvements, fixtures, easements, and appurtenances, more particularly described as:

3.2 Personal Property Included. [________________________________] (if none, state "None").

3.3 Condition. Except as expressly stated herein and in required disclosures, the Property is sold "AS IS, WHERE IS, WITH ALL FAULTS."

4. PURCHASE PRICE AND PAYMENT TERMS

4.1 Purchase Price. The total purchase price is $[____________] (the "Purchase Price").

4.2 Payment Schedule.

4.3 Application of Payments. Each payment applies first to accrued interest, then to principal, then to advances made by Seller (taxes, insurance, senior-loan payments, or to protect title).

4.4 Late Charge. A late charge of $[____] (or [____]% of the overdue installment) applies to any payment more than [____] days late, to the extent permitted by Arizona law.

5. INTEREST, AMORTIZATION, AND BALLOON

5.1 Interest Rate. Interest accrues on the unpaid principal at [____]% per annum.

5.2 Amortization. The balance is amortized over [____] months/years.

5.3 Balloon Payment. ☐ No balloon payment. ☐ A balloon payment of approximately $[____________] is due on [__/__/____] (the "Maturity Date"). Buyer must refinance or pay this amount in full on the Maturity Date.

6. PREPAYMENT

Buyer may prepay all or any part of the unpaid principal at any time ☐ without penalty ☐ subject to a prepayment charge of [________________].

7. POSSESSION

Buyer is entitled to possession on [__/__/____] and retains possession so long as Buyer is not in default, subject to this Contract and the existing encumbrances disclosed in Exhibit B.

8. TAXES, INSURANCE, AND MAINTENANCE

8.1 Taxes and Assessments. Buyer shall pay, before delinquency, all real property taxes and assessments accruing on or after the possession date and provide proof on request. Unpaid taxes paid by Seller may become "monies due under the contract" under A.R.S. § 33-741(3).

8.2 Insurance. Buyer shall maintain hazard insurance for not less than full replacement value, naming Seller as additional insured / loss payee as its interest may appear, and deliver evidence of coverage. Unpaid premiums advanced by Seller may become monies due under the contract per § 33-741(3).

8.3 Maintenance. Buyer shall keep the Property in good repair, commit no waste, and comply with all laws and recorded restrictions.

8.4 Seller Advances. Sums advanced by Seller to protect title become additional principal at the contract rate and are immediately due.

9. TITLE; ACCOUNT SERVICING AGENT; PAYOFF DEED

9.1 Retention of Legal Title. Seller retains legal title as security until the Purchase Price and all monies due are paid in full. Buyer holds equitable title.

9.2 Account Servicing Agent. ☐ The Parties appoint [NAME/ADDRESS] as the "account servicing agent" under A.R.S. § 33-741 to hold documents (including the payoff deed) and collect monies due. Receipt of monies by the account servicing agent does not constitute acceptance by Seller for purposes of A.R.S. § 33-742(C). ☐ No account servicing agent is appointed.

9.3 Payoff Deed. Upon payment in full of all monies due, Seller shall deliver to Buyer a "payoff deed" (A.R.S. § 33-741(4); § 33-750) conveying the remainder of Seller's title by [Special Warranty Deed], free of liens other than the Permitted Exceptions in Exhibit B and matters created or suffered by Buyer.

9.4 Marketable Title / Title Insurance. ☐ Seller shall provide an owner's title insurance commitment within [____] days. ☐ Buyer waives a commitment but may obtain a policy at Buyer's expense.

10. RECORDING OF CONTRACT / MEMORANDUM

10.1 Recording. Within [____] days after the Effective Date, the Parties shall record ☐ this Contract ☐ a Memorandum of Contract for Deed (Exhibit D) in the Office of the County Recorder of the county where the Property is located, under A.R.S. § 33-411. The instrument must be acknowledged and must comply with the recording-address requirement of A.R.S. § 33-411.01.

10.2 Effect. Recording gives constructive notice of Buyer's equitable interest and protects Buyer against subsequent purchasers and creditors of Seller.

10.3 Costs. Recording fees are paid by [Buyer / Seller].

11. EXISTING ENCUMBRANCES; DUE-ON-SALE / WRAP WARNING

11.1 Existing Loans. The Property ☐ is ☐ is not subject to an existing deed of trust / mortgage in favor of [LENDER] with an approximate balance of $[__________] (a "wrap" arrangement). Principal and interest paid by Seller on such senior liens may be "monies due under the contract" per § 33-741(3).

11.2 Garn-St. Germain Warning. Buyer and Seller acknowledge that most security instruments contain a due-on-sale clause and that, under the Garn-St. Germain Depository Institutions Act (12 U.S.C. § 1701j-3), transfer by contract for conveyance may permit the existing lender to accelerate the underlying loan. Seller remains responsible for keeping any senior loan current, and Buyer's payments do not relieve Seller of that obligation. Consult counsel and, where possible, the existing lender before closing.

12. RISK OF LOSS; CASUALTY; CONDEMNATION

12.1 Risk of Loss. From the possession date, risk of loss passes to Buyer, who shall maintain insurance under Section 8.2.

12.2 Casualty. Insurance proceeds shall be applied, at the Parties' written election, to restoration or to the unpaid balance.

12.3 Condemnation. A condemnation award shall be applied first to the unpaid balance, with the surplus (if any) to Buyer.

13. DEFAULT AND REMEDIES (ARIZONA — FORFEITURE SCHEDULE)

13.1 Events of Default. Buyer is in default if Buyer (a) fails to pay any monies due under the contract when due; (b) fails to maintain insurance or pay taxes; (c) commits waste or impairs Seller's security; or (d) breaches any other material covenant.

13.2 Statutory Grace / Cure Periods (A.R.S. § 33-742(D)). For a default in failing to pay monies due under the contract, Seller may enforce forfeiture only after expiration of the following period measured from the date the monies were due, based on the percentage of the Purchase Price paid:

The percentage paid is computed under A.R.S. § 33-742(E) using only: (1) down payments paid to Seller; (2) principal payments paid to Seller on the contract; and (3) principal payments paid to other lienholders that the contract states are part of the purchase price.

13.3 Notice of Election to Forfeit. After the applicable § 33-742(D) period expires, Seller must serve and record a notice of election to forfeit under A.R.S. § 33-743. Buyer may reinstate by paying all monies then due plus costs within the time provided by § 33-743. After the election-notice period expires, Seller may complete forfeiture by judicial process (A.R.S. § 33-744). Completion by notice (A.R.S. § 33-745) is available only if an account servicing agent was appointed and recorded and served the election notice as § 33-745(A) requires.

13.4 Time-of-the-Essence Waiver (§ 33-742(C)). A time-is-of-the-essence provision is waived only if Seller accepts monies in an amount less than the total then due. Receipt by an account servicing agent is not acceptance by Seller. Seller may reinstate strict performance by serving written notice on Buyer (and the account servicing agent) at least 20 days before the date strict payment will be required.

13.5 Acceleration Triggers Foreclosure (§ 33-742(A); § 33-748). If Seller elects to accelerate the principal balance, Seller may only foreclose the contract as a mortgage under A.R.S. § 33-748. Likewise, if Buyer is in default for a reason other than failing to pay monies due, Seller may only foreclose under § 33-748. Acceleration and forfeiture are mutually exclusive remedies for nonpayment.

13.6 Other Remedies (§ 33-749). Seller may also bring an action for damages, waste, or impairment of security, within the time limits of A.R.S. § 33-749, in addition to (and not in lieu of) the remedies above.

13.7 No Waiver. Seller's delay in exercising a remedy is not a waiver of a time-is-of-the-essence provision (§ 33-742(C)).

14. ASSIGNMENT

14.1 Buyer may not assign this Contract or its equitable interest without Seller's prior written consent, not unreasonably withheld. Any permitted assignee takes subject to this Contract.

14.2 Seller may assign its rights (including the right to receive monies due), subject to Buyer's rights hereunder.

15. DISCLOSURES

15.1 Lead-Based Paint (Covered Target Housing). Before Buyer is obligated under this Contract, Seller must complete the current federal process for covered target housing: provide the EPA lead-hazard pamphlet; disclose known lead-based paint and known lead-based-paint hazards; provide every available lead-hazard evaluation report; attach the large-type Lead Warning Statement and Buyer-signed acknowledgments to this Contract; and allow Buyer a 10-day risk-assessment or inspection opportunity unless the parties mutually agree to a different period. ☐ Federal coverage and any exemption reviewed ☐ Current warning/disclosure attachment completed ☐ Pamphlet and available reports delivered ☐ Inspection period completed, waived, or changed by mutual agreement.

15.2 Affidavit of Disclosure (A.R.S. § 33-422). If this is a sale of five or fewer parcels of land other than subdivided land in an unincorporated county area, or a subsequent sale of such a parcel, and no statutory seller exception applies, Seller shall complete the statutory affidavit of disclosure, furnish it to Buyer at least seven (7) days before transfer of the Property, and obtain Buyer's acknowledgment of receipt. Buyer may rescind the sale within five (5) days after the affidavit is furnished. Seller shall record the executed affidavit when the deed is recorded. ☐ Applicable; affidavit attached and delivery date: [________] ☐ Not applicable; basis: [________].

15.3 Property Condition. Seller shall deliver a Seller's Property Disclosure Statement (SPDS) and disclose known material defects to the extent required by Arizona law.

15.4 Other Disclosures. [Flood zone, HOA, well/septic, and any other required disclosures: ________________________________].

16. GENERAL PROVISIONS

16.1 Governing Law. This Contract is governed by the laws of the State of Arizona, including A.R.S. §§ 33-741 to 33-750.

16.2 Time of the Essence. Time is of the essence, subject to A.R.S. § 33-742 and the cure rights in Section 13.

16.3 Notices. Notices must be in writing and delivered by personal delivery, certified U.S. mail (return receipt requested), or nationally recognized overnight courier to the addresses in Section 1; statutory notices under §§ 33-742 to 33-745 must be served as those sections require.

16.4 Entire Agreement; Amendment. This Contract and its Exhibits are the entire agreement and may be amended only in a writing signed by both Parties.

16.5 Severability. If any provision is held invalid, the remainder remains in effect.

16.6 Attorney's Fees. The prevailing Party in any action arising under this Contract is entitled to reasonable attorney's fees and costs (A.R.S. § 12-341.01).

16.7 Counterparts; Electronic Signatures. This Contract may be executed in counterparts and by electronic signature, each deemed an original.

16.8 Successors. This Contract binds and benefits the Parties and their heirs, successors, and permitted assigns.

17. SIGNATURES AND ACKNOWLEDGMENT

IN WITNESS WHEREOF, the Parties have executed this Contract as of the Effective Date.

SELLER:

Signature: [________________________________] Date: [__/__/____]
Printed Name: [________________________________]

BUYER:

Signature: [________________________________] Date: [__/__/____]
Printed Name: [________________________________]

Notary Acknowledgment (for recording — A.R.S. § 33-411)

State of Arizona
County of [____________________]

On this [____] day of [____________], [____], before me, the undersigned Notary Public, personally appeared [NAME(S)], who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the foregoing instrument and acknowledged that he/she/they executed the same for the purposes therein contained.

[________________________________]
Notary Public
My commission expires: [__/__/____]

18. EXHIBITS

• Exhibit A — Legal Description of the Property
• Exhibit B — Permitted Exceptions / Existing Encumbrances
• Exhibit C — Account Servicing / Escrow Agreement (if applicable)
• Exhibit D — Memorandum of Contract for Deed (for recording)
• Exhibit E — Lead Warning and Disclosure Attachment (when federal target-housing rules apply)

EXHIBIT E — LEAD WARNING AND DISCLOSURE ATTACHMENT

Property: [________________________________________________]

LEAD WARNING STATEMENT

Every purchaser of any interest in residential real property on which a residential dwelling was built prior to 1978 is notified that such property may present exposure to lead from lead-based paint that may place young children at risk of developing lead poisoning. Lead poisoning in young children may produce permanent neurological damage, including learning disabilities, reduced intelligence quotient, behavioral problems, and impaired memory. Lead poisoning also poses a particular risk to pregnant women. The seller of any interest in residential real property is required to provide the buyer with any information on lead-based paint hazards from risk assessments or inspections in the seller's possession and notify the buyer of any known lead-based paint hazards. A risk assessment or inspection for possible lead-based paint hazards is recommended prior to purchase.

Seller disclosure: ☐ Seller knows of lead-based paint or lead-based-paint hazards: [DESCRIBE BASIS, LOCATION, AND CONDITION: ________________________________] ☐ Seller has no knowledge of lead-based paint or lead-based-paint hazards.

Records and reports provided to Buyer: [LIST EACH AVAILABLE LEAD-HAZARD RECORD OR REPORT PROVIDED: ________________________________] ☐ Seller has no such records or reports available.

Buyer acknowledgment: By signing below, Buyer acknowledges receipt of Seller's disclosure and the records or reports listed above, and receipt of the federally approved lead-hazard information pamphlet. Buyer also states that Buyer has read the Lead Warning Statement and understands its contents.

Inspection opportunity: Buyer ☐ received a 10-day opportunity to conduct a lead risk assessment or inspection before becoming obligated under this Contract; ☐ received a different period mutually agreed in writing: [____] days; or ☐ waives that opportunity.

Seller's agent certification, if an agent is involved: I informed Seller of Seller's obligations under 42 U.S.C. § 4852d and am aware of my duty to ensure compliance with the federal lead-disclosure requirements.

Agent name (repeat for each involved agent): [________________________________] Agent signature: [________________________________] Date: [__/__/____]

By signing, Seller, any involved agent, and Buyer certify the accuracy of their statements to the best of their knowledge.

Seller signature (repeat for each seller): [________________________________] Date: [__/__/____]

Buyer signature (repeat for each purchaser): [________________________________] Date: [__/__/____]

Seller and any involved agent must retain a copy of the completed attachment for at least three years from completion of the sale under 40 C.F.R. § 745.113(c)(1).

Sources and References

• A.R.S. § 33-741 — Definitions: https://law.justia.com/codes/arizona/title-33/section-33-741/
• A.R.S. § 33-742 — Forfeiture of purchaser's interest; grace-period schedule: https://www.azleg.gov/ars/33/00742.htm
• A.R.S. § 33-743 — Notice of election to forfeit; reinstatement: https://www.azleg.gov/arstitle/
• A.R.S. § 33-744 — Completion of forfeiture by judicial process: https://www.azleg.gov/ars/33/00744.htm
• A.R.S. § 33-745 — Completion of forfeiture by notice: https://www.azleg.gov/ars/33/00745.htm
• A.R.S. § 33-748 — Seller's right to foreclose the contract as a mortgage: https://az.elaws.us/ars/33-748
• A.R.S. § 33-749 — Other remedies: https://az.elaws.us/ars/33-749
• A.R.S. § 33-411 — Recording of conveyances; acknowledgment: https://law.justia.com/codes/arizona/title-33/section-33-411/
• A.R.S. § 33-422 — Affidavit of disclosure (unsubdivided land): https://law.justia.com/codes/arizona/title-33/section-33-422/
• A.R.S. § 44-1201 — Rate of interest: https://law.justia.com/codes/arizona/title-44/section-44-1201/
• Garn-St. Germain Act, 12 U.S.C. § 1701j-3: https://www.law.cornell.edu/uscode/text/12/1701j-3
• Lead-Based Paint disclosure, 42 U.S.C. § 4852d: https://www.law.cornell.edu/uscode/text/42/4852d