Colorado Contract for Deed Law


Contract for Deed – General – Colorado

Colorado Statutes

TITLE 15 PROBATE, TRUSTS, AND FIDUCIARIES
COLORADO PROBATE CODE
ARTICLE 15 Nonprobate Transfers on Death
PART 4 TRANSFER OF REAL PROPERTY EFFECTIVE ON DEATH

15-15-402. Real property — beneficiary deed.

(1) In addition to any method allowed by law to effect a transfer at death, title to an interest in real property may be transferred on the death of the owner by recording, prior to the owner’s death, a beneficiary deed signed by the owner of such interest, as grantor, designating a grantee-beneficiary of the interest. The transfer by a beneficiary deed shall be effective only upon the death of the owner. A beneficiary deed need not be supported by consideration.

(2) The joinder, signature, consent, or agreement of, or notice to, a grantee-beneficiary of a beneficiary deed prior to the death of the grantor shall not be required. Subject to the right of the grantee-beneficiary to disclaim or refuse to accept the property, the conveyance shall be effective upon the death of the owner.

(3) During the lifetime of the owner, the grantee-beneficiary shall have no right, title, or interest in or to the property, and the owner shall retain the full power and authority with respect to the property without the joinder, signature, consent, or agreement of, or notice to, the grantee-beneficiary for any purpose.

15-15-404. Form of beneficiary deed — recording.

(1) An owner may transfer an interest in real property effective on the death of the owner by executing a beneficiary deed that contains the words “conveys on death” or “transfers on death” or otherwise indicates the transfer is to be effective on the death of the owner and recording the beneficiary deed prior to the death of the owner in the office of the clerk and recorder in the county where the real property is located. A beneficiary deed may be in substantially the following form:

BENEFICIARY DEED

(§§ 15-15-401 et seq., Colorado Revised Statutes)

CAUTION: THIS DEED MUST BE RECORDED PRIOR TO THE DEATH OF THE GRANTOR IN ORDER TO BE EFFECTIVE.

___, as grantor,

(Name of grantor)

designates____________________________________ as

(Name of grantee-beneficiary)

grantee-beneficiary whose address is ___ (Note to Assessor and Treasurer: This address is for identification purposes only, all notices and tax statements should continue to be sent to grantor.)

(Optional)[or if grantee-beneficiary fails to survive grantor, grantor designates ___, as

(Name of successor grantee-beneficiary)

successor grantee-beneficiary whose address is ________________________ _____________________]

and grantor transfers, sells, and conveys on grantor’s death to the grantee-beneficiary, the following described real property located in the County of ___, State of Colorado:

(insert legal description here)

Known and numbered as _______________

THIS BENEFICIARY DEED IS REVOCABLE. IT DOES NOT TRANSFER ANY OWNERSHIP UNTIL THE DEATH OF THE GRANTOR. IT REVOKES ALL PRIOR BENEFICIARY DEEDS BY THIS GRANTOR FOR THIS REAL PROPERTY EVEN IF THIS BENEFICIARY DEED FAILS TO CONVEY ALL OF THE GRANTOR’S INTEREST IN THIS REAL PROPERTY.

WARNING: EXECUTION OF THIS BENEFICIARY DEED MAY DISQUALIFY THE GRANTOR FROM BEING DETERMINED ELIGIBLE FOR, OR FROM RECEIVING, MEDICAID UNDER TITLE 26, COLORADO REVISED STATUTES.

WARNING: EXECUTION OF THIS BENEFICIARY DEED MAY NOT AVOID PROBATE.

Executed this______________.

(Date)

_________________________________

(Grantor)

(2) Unless the owner designates otherwise in a beneficiary deed, a beneficiary deed shall not be deemed to contain any warranties of title and shall have the same force and effect as a conveyance made using a bargain and sale deed.

TITLE 38 PROPERTY – REAL AND PERSONAL REAL PROPERTY
Conveyancing and Evidence of Title
ARTICLE 35 Conveyancing and Recording
PART 1 GENERAL PROVISIONS

38-35-126. Contract for deed – escrow of tax moneys – written notice.

(1)(a) Parties entering into a contract for deed to real property shall designate the public trustee of the county wherein such real property is located to act as escrow agent for moneys paid or to be paid by the purchaser to meet the property tax obligations on such real property, including the seller’s credit at closing for the current year’s property taxes, and periodic property tax payments which the contract shall provide will be made monthly by the purchaser to the public trustee. The purchaser shall be responsible for payment to the public trustee of the escrow fee pursuant to the provisions of section 38-37-104(1)(j). Once each year during the month of April, upon notice from the county treasurer, the public trustee shall, to the extent funds are on deposit in the escrow account, transfer sufficient funds from the escrow account to the county treasurer for payment of property taxes on the real property for the prior taxable year. The public trustee shall continue as escrow agent for tax moneys collected on the real property until the deed to such real property is delivered to the purchaser and recorded. At the time of such deliverance, the public trustee shall release to the purchaser any moneys remaining in the escrow account and the receipts for all property taxes paid on the property by the public trustee. If the public trustee determines that the escrow is no longer necessary, the public trustee may terminate the escrow account. The public trustee shall notify the county treasurer of such termination and shall transfer any moneys held in escrow to the county treasurer for payment of property taxes in accordance with section 39-10-104.5, C.R.S. Any amount so transferred by the public trustee shall be subtracted from the amount of property tax payable on the real property at the time annual property taxes for the current or subsequent taxable years are due. Upon termination of the escrow account, any amount not accepted by the county treasurer upon transfer shall be returned by the public trustee to the person holding title to the real property which is the subject of the contract for deed to real property.

Editor’s note: This version of paragraph (a) is effective until July 1, 2007.

(a) Parties entering into a contract for deed to real property shall designate the public trustee of the county where the real property is located to act as escrow agent for moneys paid or to be paid by the purchaser to meet the property tax obligations on the real property, including the seller’s credit at closing for the current year’s property taxes and periodic property tax payments, which the contract shall provide will be made monthly by the purchaser to the public trustee. The purchaser shall be responsible for payment to the public trustee of the escrow fee pursuant to section 38-37-104(1)(d). Once each year during the month of April, upon notice from the county treasurer, the public trustee shall, to the extent funds are on deposit in the escrow account, transfer sufficient funds from the escrow account to the county treasurer for payment of property taxes on the real property for the prior taxable year. The public trustee shall continue as escrow agent for tax moneys collected on the real property until the deed to the real property is delivered to the purchaser and recorded. At the time of delivery, the public trustee shall release to the purchaser any moneys remaining in the escrow account and the receipts for all property taxes paid on the property by the public trustee. If the public trustee determines that the escrow is no longer necessary, the public trustee may terminate the escrow account. The public trustee shall notify the county treasurer of the termination and shall transfer any moneys held in escrow to the county treasurer for payment of property taxes in accordance with section 39-10-104.5, C.R.S. Any amount so transferred by the public trustee shall be subtracted from the amount of property tax payable on the real property at the time annual property taxes for the current or subsequent taxable years are due. Upon termination of the escrow account, any amount not accepted by the county treasurer upon transfer shall be returned by the public trustee to the person holding title to the real property that is the subject of the contract for deed to real property.

Editor’s note: This version of paragraph (a) is effective July 1, 2007.

(b) For the purposes of this section, a “contract for deed to real property” means a contract for the sale of real property which provides that the purchaser shall assume possession of the real property and the rights and responsibilities of ownership of the real property but that the deed to such real property will not be delivered to the purchaser for at least one hundred eighty days following the latest execution date on the contract for deed to real property and not until the purchaser has met certain conditions such as payment of the full contract price or a specified portion thereof. “Contract for deed to real property” includes installment land contracts.

(c) The public trustee shall deposit tax moneys received pursuant to the provisions of paragraph (a) of this subsection (1) in an escrow account opened for such purpose in one or more financial institutions which are in compliance with and qualified and defined in article 10.5 of title 11, C.R.S. Moneys from more than one transaction may be commingled in one account, to be accounted for separately. If the escrow account opened by the public trustee under the provisions of this subsection (1) bears interest, such interest shall be retained by the public trustee to defray expenses arising from the administration of such escrow account.

(d) A public trustee may designate an alternate to act as escrow agent on any contract for deed to real property in which the public trustee is designated as escrow agent pursuant to the provisions of this section; except that such alternate shall not be a party to the contract for deed to real property. Such designation shall be made by sending written notification of such designation to the parties to such contract and to the county treasurer. Such notice shall include the name and legal address of the designated alternate and the date such designated alternate shall assume the duties of escrow agent. Such designated alternate shall have all of the duties and powers of the public trustee to act as escrow agent on a contract for deed to real property as stated in this section. In the event that the public trustee designates an alternate to serve as escrow agent, the purchaser shall pay to the designated alternate the escrow fee as stated in paragraph (a) of this subsection (1).

(2) Within ninety days of executing and delivering a contract for deed to real property, the seller shall file with the county treasurer of the county wherein the real property is located a written notice of transfer by contract for deed to real property. Such notice shall not operate to convey title. Such notice shall include the name and legal address of the seller, the name and legal address of the purchaser, a legal description of the real property, the date upon which the contract for deed to real property was executed and delivered, and the date or conditions upon which the deed to the real property will be delivered to the purchaser, absent default. In addition, within ninety days of executing and delivering the contract for deed to real property, the seller shall file a real estate transfer declaration with the county assessor of the county wherein the property is located, pursuant to the provisions of section 39-14-102, C.R.S.

(3) The buyer shall have the option of voiding any contract for deed to real property which fails to designate the public trustee as escrow agent for deposit of property tax moneys or for which no written notice is filed with the county treasurer’s office or the county assessor’s office. Upon voidance of such contract, the buyer shall be entitled to the return of all payments made on the contract, with statutory interest as defined in section 5-12-102, C.R.S., and reasonable attorney fees and costs. This avoidance right shall expire on the date seven years after the latest execution date on the contract for deed to real property unless exercised prior to such date.

(4) The provisions of subsections (1) and (3) of this section shall not apply to the parties to a contract for deed to real property so long as the seller complies with the requirements of subsection (2) of this section, so long as the real property which is the subject of such contract for deed to real property is not subdivided into parcels which are smaller than one acre, and so long as the seller pays the annual property tax obligations on the real property which is the subject of such contract for deed to real property or submits a bond or an irrevocable letter of credit in the amount of the taxes due on such real property to the county treasurer, either of which shall be immediately payable to such county treasurer upon default. Payment of such property taxes or submittal of such bond or irrevocable letter of credit shall be made within thirty days of mailing of the notice of taxes due from the county treasurer and prior to seeking reimbursement from the purchaser.

(5) Repealed.

Colorado Case Law

Woods v. Montecello Dev. Co., 656 P.2d 1324 (Colo.App. 1982); While equity abhors forfeiture, this equitable maxim applies only where the buyer has substantially performed his or her duties under the contract.

Haan v. Traylor, 79 P.3d 114; Colo. Rev. Stat. § 38-35-126(1)(a) (2002) requires in part parties entering into a contract for deed to real property designate the public trustee of the county wherein such real property is located to act as escrow agent for moneys paid or to be paid by the purchaser to meet the property tax obligations.