Patty BartlettLogan County

Treasurer / Public Trustee

Contract for Deed

Escrow of Tax Moneys

Written Notice

Section 38-35-126

Contract for Deed• A Contract for sale of real

property that gives the purchaser possession of real property and rights and responsibilities of ownership

• Deed to the property will not be delivered for at least 180 days & not until the purchaser has met certain conditions set forth in the contract; i.e., payment, etc.

• Includes installment land contracts

Notice of Transfer by Contract

• Within 90 days of executing & delivering a contract for deed, seller shall file written notice of transfer by contract for deed with County Treasurer

• Such notice shall not convey title

Notice of Transfer by Contract• Notice needs to include:

• Name & legal address of seller

• Name & legal address of purchaser

• Legal description• Date of contract for deed• Date or conditions upon

which the deed will be delivered to purchaser, absent default

Notice of Transfer by Contract

• Within the 90 day period, the seller shall file a real estate transfer declaration with the Assessor pursuant to section 39-14-102, C.R.S.

Acting as Escrow Agent • Contract for Deed requires a

Tax Escrow account to meet the property tax obligation

• Parties to a Contract for Deed to real property shall designate the PT of the County where the real property is located as Escrow Agent for moneys to be paid for tax obligations, including seller’s credit at closing for current year’s taxes

Acting as Escrow Agent • Contract payments will be

made monthly by the purchaser to the Public Trustee

• Purchaser shall pay PT $75.00 escrow fee• Payable in advance, for each

taxable year or portion thereof – 38-37-104(1)(d)

Collection of Property Taxes • As soon as property tax

statements are available, a duplicate tax statement should be mailed to the purchaser

• An invoice for the $75 PT Escrow fee should also be mailed to the purchaser

Escrow DepositsPT shall deposit tax moneys in an escrow account opened for such purpose in one or more financial institutions which are in compliance with and qualified & defined in Article 10.5 of Title 11, C.R.S. • Moneys from more than 1

transaction may be combined in one account but accounted for separately

• Any interest accrued will be kept by PT for administration costs

Acting as Escrow Agent

• Treasurer shall provide notice and PT shall pay taxes from the escrow account in April of each year

• Payment must be for full amount due• No partial payments will be

accepted

Acting as Escrow Agent

• PT shall continue as escrow agent for tax moneys until deed is delivered and recorded• Upon receipt of a copy of the

recorded Deed, PT will release any moneys remaining and receipts for taxes paid to purchaser

Terminating Escrow Account• If PT determines that escrow is

no longer necessary, escrow account may be terminated

• PT shall notify the Treasurer• All money held in escrow will

transfer to Treasurer for payment of current or subsequent taxes (39-10-104.5 C.R.S.)

• Any amount not accepted will be returned to person holding title to the property

Designate Alternate Escrow Agent • A PT may designate an

alternate to act as escrow agent • i.e. a local bank or title company

that deals in escrow accounts 38-35-126 C.R.S.

• Alternate shall not be a party to the Contract for Deed

• Designation shall be made by sending written notice to all parties to contract & to County Treasurer

Designate Alternate Escrow Agent • Notice shall include name &

legal address of alternate, & date alternate shall assume escrow agent duties

• Alternate Escrow Agent shall have all of the duties and powers as stated herein

• Escrow fee is payable to the alternate escrow agent

Request to Designate Alternate• Keep records that include:

• Certificate of Mailing, Mailing List

• Contract for Deed• Public Trustee’s Designation

of Alternate• Request for Alternate

Voiding the Contract

• Buyer shall have the option of voiding any contract for deed that:• Fails to designate the Public

Trustee as escrow agent for deposit of property tax moneys

• No written notice is filed with the County Treasurer’s or Assessor’s offices

Voiding the Contract• Upon voidance of contract,

purchaser 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 7 years after latest execution date on contract unless exercised prior to such date

Payment of Taxes by SellerProvisions of subsections (1)

{designation of Public Trustee or alternate to act as Escrow Agent} & (3) {voidance of contract if no Escrow Agent is designated} of this section shall not apply to parties to a contract for deed to real property so long as seller complies with requirements of subsection (2) {within 90 days written notice to County Treasurer & Assessor} of this section, so long as:

Payment of Taxes by Seller

• (a) the real property which is the subject of contract for deed to real property is not subdivided into parcels smaller than 1 acre, and

• (b) so long as the seller pays annual property taxes on the property which is subject of the contract for deed to real property or

Payment of Taxes by Seller• (c) submits a bond or an

irrevocable letter of credit in the amount of taxes due on real property to County Treasurer, either of which is immediately payable to County Treasurer upon default

Payment of Taxes by Seller• Payment of property taxes or

submittal of bond or irrevocable letter of credit shall be made within 30 days of mailing of notice of taxes due from the County Treasurer and prior to seeking reimbursement from the purchaser