In an "Owner Will Carry" can we be kicked out if 30 days late?

Asked by Michelle in Phoenix, Phoenix, AZ Fri Sep 13, 2013

We are in an owner will carry. If we are ever late (we are usually within the 10 day grace period), we are reminded that we do not have the same rights as a conventional mortage. The owner carrying our loan reminds us that if we are 30 days late we can be evicted. I can find nothing in the paperwork saying this. I can find a late fee after 10 days and a late fee plus interest after 30 days. I see nothing that says he can cancel the contract if we are 30 days late. I don't think we will ever be 30 days late but I just want to know if he is just feeding us bull. Could he really take the house back that easy?

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Anthony Kesm…, Agent, phoenix, AZ
Fri Sep 13, 2013
It all depends. Normally a carry back has specific language as to what happens when something occurs. Best if you consult an attorney for an opinion if you can afford one or try finding one who will work pro bono for free. Best is to keep payments on time and then you do not have a problem.
2 votes
Thank you. I can find no other language concerning default and my realtor went over everything like a mad woman with OCD. I think had he slipped something in like that she would have seen it. (He did try a few other tricks and she shot him down at every turn). If ever we are coming up on 30 days I will err on the side of caution and seek legal help though. I just needed to know if he was just being a jerk or it there really was a possibility he could do it. He bought this property for a friend who burned him, he didn't want it to begin with. What he really wants is all of his money back now. We have a 12 year mortgage. He has even offered to sell the 45k note for 30K just to have the payments over with and most of his money back in his pocket.
Flag Fri Sep 13, 2013
Mack McCoy, Agent, Seattle, WA
Fri Sep 13, 2013
Where is your attorney in this, Michelle?

I'm going to rant for a moment. As soon as you have an interest in real property, you have an Estate. When you have an Estate, you should have an attorney. (And an accountant, by the way).

I want you to know that there are people who have a business model of either providing real estate contracts (owner-will-carry) or hard money BASED ON THE IDEA that the buyer may "default" and they will seize the property back.

You need to have a safety clause in there so that "default" isn't so easy.

All the best,
2 votes
Great reply Mack. I never ceased to be amazed by agents offering legal advise. Thank you for your professionalism.
Flag Fri Sep 13, 2013
Jason Webb, Agent, Glendale, AZ
Fri Sep 13, 2013
Arizona law does define the default periods. Depends on the type of documents used, it would most likely fall under foreclosure rules or forfeiture rules. In a typical seller carry, a forfeiture most likely applies. You may forfeit your interest after 30 days if you have less then 20% of purchase price paid. Refer to A.R.S. 33-742.
2 votes
Dave Jackson, Mortgage Broker Or Lender, Phoenix, AZ
Fri Sep 13, 2013
Exactly what is written below. Everything is dictated by the document you sign. (The agreement) There is no standard or usual terms it is the terms listed in the contract. If an area is NOT addressed in the contract then there is only speculation and such would be interpreted in a court of law if it got there.

A contract or Real Estate attorney can give you opinon onwhat could happen if the dispute was taken that far.

Good luck.

Dave Jackson
Loan Officer/Real Estate Asset Planner
Financing Solutions for Arizona Real Estate since 1993
American Financial Lending, Inc.
20860 N. Tatum Blvd, Suite 160
Phoenix, AZ 85050-4277
602 277-3800 w
602 631-9788 f
602 524-2401 c
602 912-9438 h
BK # 0910057 NMLS LO ID # 284875
2 votes
Raoul Lousta…, Agent, glendale, AZ
Sun Sep 15, 2013
Hello Michelle

you can reach a real estate attorney and let him see your contract , yes their are differences between a mortgage and a owner carry but it depends what kind of contract you signed the only one that can advise you is an real estate attorney its the best investment you might do and will give you probably the peace of mind you need .

if i can be of any other kind of help please feel free to contact me via email

thanks have a great day
1 vote
Lloyd W Kaip…, Agent, Phoenix, AZ
Sat Sep 14, 2013
I am not an Atty. But it depends on what your contract is or says depending on what type it is.

Lease option? Read the contract but 30 days is possible.
Deed of trust allows for 90 day redemption.
Agreement for sale depends on amount of equity/down payment you have.

If you can't afford an Atty. read your note/contract. I also assume this is in Az. so you can Google the Az. statutes.
As everyone has told you seek legal advice is best.
1 vote
Mack McCoy, Agent, Seattle, WA
Sat Sep 14, 2013
Well, Michelle, as a real estate agent myself, I assure you that your agent does not want to be responsible for interpreting your contract. In fact, if things do go bad, your agent is going to have an excellent defense - she is not an attorney!

Let a qualified professional - an attorney - go over the contract with a fine tooth comb. Just because I can brush a dog doesn't make me a veterinarian, and just because your agent read the contract doesn't mean that they're qualified to ensure your safety.

All the best,
1 vote
Jennie Miller…, Agent, Phoenix, AZ
Fri Sep 13, 2013
You might want to ask an attorney to get the legal answer on this. Arizona is a trustee sale state and you may want to do some more investigation on this.
1 vote
Margaret L B…, Agent, phoenix, AZ
Fri Sep 13, 2013
As everyone has answered here the best person to address your issues is a Real Estate Attorney, , a copy of your contract and all addendums... Its all about how the contract is written and agreed to by all parties, but an attorney is the only one that can really assist you with this

All the Best...
1 vote
Harnek Dadia…, Agent, Glendale, AZ
Fri Sep 13, 2013
It is hard to say without having seen all the documents and knowing the details of the transactions. But if I was carrying back I would definitely have a default clause and what could be done in case of default. Remember you should always consult with lawyer(s) and or Tax professionals if uncertain about anything material or legal. Hope this helps.
1 vote
Stephanie We…, Agent, Gilbert, AZ
Fri Sep 13, 2013
Everything that governs the deal between you and the seller is in your contract and note/deed of Trust or whatever was used and would be in writing.

This is really a legal question and should be directed at your attorney or CPA.

All the best!
1 vote
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