Q. I have an escrow which has cancelled due to the buyer unable to obtain new financing. I was told that the loan was denied due to a false social security number but the buyer’s agent is saying there’s some mix-up. Our seller is angry because the house was left off the market for over 30 days and would like to know if she has any recourse on suing the buyer for damages. Also, is the earnest money automatically forfeited to the seller because of this?
A. Since the accusation of a false Social Security number could be a misunderstanding at the lender, the seller will probably have to deliver a cure notice on the buyer. That way, if there is a misunderstanding, the buyer has an opportunity to resolve it. If not resolved within the 3-day cure period (described in the Arizona Association of Realtors™ Purchase Contract), the seller can elect her remedies- either take the earnest money or sue the buyer for damages. If she wants to go after the buyer for damages she should talk with an attorney before she starts any cancellation proceedings.

Q. We have a property where the husband bought the property prior to the marriage. Since it was acquired before the marriage, it can be treated as his sole and separate property, correct (i.e. she neither needs to disclaim her interest nor sign on deeds of trust/mortgages)? I found the following statute but wanted to be sure.
A. The statute you refer to is applicable. Arizona is a Community Property state and that’s where some lender becomes cautious. Some lenders are concerned that circumstances changed such that the property is no longer separate property (It’s that “transmutation” theory of changing from a separate asset to a community asset). From a title perspective we generally rely upon the statute and don’t require a disclaimer unless some dispute arises among the spouses prior to closing. Typically this would happen during divorce proceedings wherein the other spouse claims an interest- some even record a lis pendens on the property.

Q. We have a file that I am working on in Arizona. The current owners in title are both deceased (the husband was the last one to pass away.) We found his will recorded at the County Recorder’s Office. However, I am unsure of what probate information is required for the state of Arizona. I am not sure if just having the will recorded is enough to convey property. Sure would like to close this transaction.
A. Sorry to say but the mere recording of the will does not convey the property. I like to think of a “last will and testament” as an instruction manual for the personal representative and the Court on how to distribute the assets of the deceased. In your question, you note that the father was the last to die and therefore I assume he previously held title with his wife with a “rights of survivorship” clause so that at the time of his death he held 100% of the property. If that’s right, then some form of probate proceedings will be necessary to carry out the wishes found in the will. If there was no right of survivorship between them then you’ll have to also address the wife’s interest as well. Some form of probate proceedings can accomplish the transfer(s) by formal/informal probate proceedings or, if applicable, by special affidavit. They should talk with a probate attorney to get this all accomplished- especially if there are other assets to deal with.

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Copyright, John T. Lotardo. All rights reserved. John Lotardo (aka the TITLEMAN™) is Senior Vice-President and General Counsel for Stewart Title & Trust of Phoenix, Inc., and State Underwriting Counsel for Stewart Title Guaranty Company. He is a member of the National Advisory Councils for GoGetEscrow.com, GoGetLoan.com, GoGetNotary.com and GoGetRealEstate.com. For more about John, visit: www.GoGetEscrow.com/Get/Titleman or www.AskTheTitleman.com.