A little known Colorado statute requires the County Public Trustee or his designee to act as an escrow agent for property taxes in all Installment Land Contracts and also requires notification to the County Tax Assessor of a transfer via ILC…how are Colorado investors handling this? Non-compliance can result in nullification of the ILC and a return of ALL the funds paid plus interest back to the ILC buyer. Is anyone using ILC’s in Colorado and if so how are you dealing with this requirement? Thanks in advance for any replies.
Colorado Ilcs
Closed over 600 ILCs in Colorado since 1998. We comply with statute by simply filing notices with Assesor and Treasurer. Not a big deal. We name the Public Trustee as escrow agent as required by law, but we ignore it from there. In other words, we comply with the literal requirements of the statute, but in practice the underlying Loan already has an escrow. So we don’t actually pay taxes to PT. I’ve spoken to all the county PTs and they don’t want to do it anyway. I’ve dealt in court with this issue and the judge allowed the seller to claim lost rent as an offset, so the buyer doesn’t actually get a free ride if the statute is not complied with.
Land sales possible minefield
Are you aware of the Interstate Land Sales Act and its court decisions?
Best you pay for conference with some CO lawyer who’s knowledgable in this area so ignorance of the law doesn’t bite you.
Bronchik is likely too busy but he could maybe give you a referral or two.
I am familiar with that statute, but it would not apply to selling improved property on a land contract within the state of Colorado.