From the advice of one of our preferred Attorneys, Mr. Chris Combs of Combs, Gottlieb & MacQueen, P.C.:
Documentation Releasing Seller Carryback
Question:
Ten years ago we purchased 40 acres of vacant land near Coolidge with
seller carryback financing. In other words, we signed a promissory note
to pay the seller monthly payments secured by a deed of trust on the 40
acres of vacant land. The final monthly payment to the seller is due
next month. When I make this final monthly payment to the seller, what
happens?
Answer:
Seller carryback financing is a mortgage from the seller, just like a
mortgage from Bank of America or any other mortgage lender. After you
make the final payment to the seller on the seller carryback financing,
your seller (or any other mortgage lender like Bank of America) is
required under Arizona law to record within thirty days a Deed of
Release and Reconveyance ("Recon Deed"). After the recording of this
Recon Deed by your seller, the seller carryback financing will be
removed as a lien against your 40 acres. If a Recon Deed has not been
recorded within thirty days after the final payment, you should give
written notice to the seller. If the seller still does not record this
Recon Deed within the next twenty days, the seller is liable to you for a
$1,000 penalty.
Note: Read the full article here.
