Legal Question in Real Estate Law in Arizona
Dear Sir:
My wife and I own a small piece of land in Yavapai County, Arizona. The property title is free and clear in me and wife's names. A contractor agreed to perform services to us in exchange for our land. We want to transfer the title of this land to a contractor in exchange for the contractor's services. The approximately value of the land is $9900. The approximately value of the contractor's services that he will be performing for us is $9900. There will be no cash exchange between us and the contractor. My questions are:
1. What is generally the process of transfering a title from me to my contractor when there is no cash exchange involved?
2. Can I prepare a simple limited warranty deed to transfer the land title to my contractor?
3. What minimum selling price can I declare in my deed to minimize my tax consequences?
Thank you for your prompt advise to these questions.
1 Answer from Attorneys
You should treat this transaction as any other sale of the property. You should have a purchase agreement, an escrow with instructions that incorporate the purchase contract requirements and you should be sure that no transfer of title occurs until you have notified the escrow holder that you are completely and without reservation, satisfied and accepting the work of the contractor as payment for the land. The escrow company can provide the deed and you should use the actual price, $9,900.
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