by Phoenix attorney Christopher A. Combs, partner with Combs Law Group, P.C.


Six years ago my mother and father bought a five-acre parcel of land near Taylor, Arizona for $40,000. They paid $10,000 down and entered into a carryback agreement with the seller to pay $10,000 per year for the next three years. My parents have mailed to the seller all three of the remaining $10,000 payments, plus interest, and have the cancelled checks to prove that they made these three remaining payments. The carryback agreement with the seller is still a recorded lien, however, and the seller cannot be located. My parents now want to sell this five-acre parcel of land, but there is this cloud on the title, even though the final payment was due and paid by my parents more than three years ago. How can my parents get clear title to this five-acre parcel of land?


At the time your parents entered into this transaction six years ago, your parents and the seller should have entered into a servicing agreement with a title company to handle the payments. At the time of this servicing agreement, the title company would have required a release document from the seller. The result would be that, after your parents made the final $10,000 payments to the title company, the title company would record the release document and your parents would have clear title. If all of the payments were mailed to the seller, however, and the seller cannot now be located, you may have to contact a real estate attorney to file a quiet title action with service by publication on the seller. Alternatively, your parents can contact a title company now to show the title company the cancelled checks, and the title company may ” insure over” the lack of a release document. In other words, your parents could sell the five-acre parcel to a buyer, and the title company would insure clear title to the buyer even without a release document. Note: If a final payment on a recorded mortgage or deed of trust was due more than ten years ago, under Arizona law the mortgage or deed of trust expires as a lien. A.R.S. § 33-714(A).

The above is for informational purposes only and is not intended as definitive legal or tax advice. You should not act upon this information without seeking independent legal counsel. If you desire legal, tax or other professional advice, please contact your attorney, tax advisor or other professional consultant. Reprinted with permission. Copyright 2006, all rights reserved.