Understanding the Colorado Contract to Buy and Sell Land (It's Free!)

Why Use the Standard Colorado DORA Contract to Buy and Sell Land?

Utilizing the standard DORA land sale contract template offers significant advantages:

• Standardization: It is widely recognized and understood by professionals across the state, including title companies, lenders, appraisers, and attorneys, facilitating a smoother transaction process.
• Legally Vetted: Developed and approved by the Colorado Real Estate Commission, it represents a balanced approach, protecting the interests of both buyer and seller.
• Comprehensive: It addresses most essential terms required for a land transaction and includes detailed sections for Colorado-specific issues, notably water rights.
• Reduces Risk: By providing a clear, detailed roadmap for the transaction, it minimizes potential misunderstandings and disputes compared to using non-standard or poorly drafted agreements. This helps ensure a solid Colorado purchase and sale agreement.
• Efficiency: Familiarity within the industry streamlines the review and closing process.

Alternatives to the DORA Contract to Buy and Sell Land

While the DORA vacant land purchase agreement is the standard, parties occasionally consider alternatives:

• Custom contract drafted by a Colorado real estate attorney: This option can be tailored specifically to the transaction's unique needs. However, it generally involves higher upfront costs and can take more time to prepare compared to using the standard form.
• Generic online legal forms: These readily available forms might seem convenient, but they often lack critical Colorado-specific provisions, particularly regarding complex issues like water rights. They may also fail to adequately balance the interests of both buyer and seller.
• Simple or handwritten agreements: These are discouraged. They almost invariably fail to address necessary legal requirements, contingencies, deadlines, and specific property issues, leading to significant risk, ambiguity, and potential disputes down the line.

Compared to these alternatives, the Colorado DORA contract for land offers a widely recognized, comprehensive, and legally reviewed starting point that is specifically designed for Colorado land transactions, generally making it the most efficient and balanced choice for most situations.

Key Sections of the Contract to Buy and Sell Land Explained

The DORA land sale agreement is a detailed document. Understanding its key sections is vital before signing. Below is an explanation of major components.

Parties, Property Details, and Title Vesting

This initial section identifies the Buyer and Seller. Ensure names are spelled correctly and, for the Seller, match the name on the property's deed precisely. It details how the Buyer will take title (e.g., Joint Tenants, Tenants In Common), which has legal inheritance implications. The property's street address (if available) and, most importantly, the full, accurate Legal Description are included here. An incorrect legal description can invalidate the contract or cause significant title problems. This section also typically states that the contract is NOT assignable by the Buyer unless otherwise agreed upon � an important point in a private land sale contract situation.

Inclusions, Exclusions, and Conveyance Details

Clarity here prevents disputes at closing. This section defines what is included in the sale (Inclusions - typically fixtures attached to the land) and what is specifically excluded (Exclusions). It addresses how items owned by the Seller but subject to debt (Encumbered Inclusions, like owned solar panels) or items currently leased by the Seller (Leased Items, like propane tanks) are handled, including whether the Buyer will assume obligations. For any vacant land purchase agreement, be meticulous in listing anything potentially ambiguous (e.g., gates, sheds, irrigation equipment).

Water Rights, Wells, and Water/Sewer Taps

Crucial for buying land in colorado, this extensive section details water rights. It covers Deeded Water Rights, Other Rights Relating to Water, Well Rights (including permit numbers, registration status with the Colorado Division of Water Resources (DWR), and required transfer forms like the Change in Ownership form), Water Stock (shares in ditch companies), and Water/Sewer Taps being conveyed. It outlines the Seller's obligation to provide information and the Buyer's right to review these complex rights. Given the complexity, professional advice from a water attorney is often recommended when significant water rights are involved.

The Dates and Deadlines Grid: The Contract's Timeline

This table is the operational heart of the colorado contract to buy and sell. It lists critical dates and deadlines for various contractual obligations: Title review, loan application, appraisal, survey, inspection, due diligence, closing date, etc. It defines how days are counted, the effect of weekends/holidays (whether deadlines extend or not), and the Time of Day Deadline. Missing these deadlines can lead to default or the waiver of important rights (like the right to object). Meticulous tracking is essential for all parties, especially in FSBO situations.

Purchase Price, Earnest Money, and Financial Terms

This section outlines the core financial agreement: the total Purchase Price, the Earnest Money deposit (amount, form - e.g., check, wire, deadline for delivery, and who holds it - typically the Title Company), loan details (New Loan, Assumption, Seller/Private Financing options), and any Seller Concessions (credits from Seller to Buyer at closing). The Earnest Money Holder follows strict contractual (and often regulatory) rules regarding the deposit, especially if the deal terminates before closing � release usually requires written mutual instructions from Buyer and Seller.

Financing Conditions and Obligations

If the Buyer is obtaining a loan, this section details their obligations to apply for and secure financing within specified deadlines (New Loan Terms Deadline, New Loan Availability Deadline). It outlines the conditions under which a Buyer might terminate if financing is unsatisfactory or unavailable, subject to specific contract limitations.

Appraisal Provisions

This outlines the process if an appraisal is required (common for financed deals). It defines the Appraisal Deadline, Objection Deadline, and Resolution Deadline, governing the parties' rights and actions if the property appraises for less than the purchase price.

Title Insurance, Title Review, Off-Record Matters, and Surveys

This covers ensuring the Seller can convey clear title. It specifies who selects and pays for the owner's title insurance policy. It addresses the option for Owner's Extended Coverage (OEC) for broader protection. Deadlines are set for the delivery and review of the Title Commitment (or Abstract) and associated documents (Title Documents), which list exceptions (e.g., easements, covenants). The Seller must disclose known off-record title matters. The Buyer has deadlines to object to unsatisfactory title conditions. This section also details options for a New Improvement Location Certificate (ILC) or a more detailed Land Survey Plat/Boundary Survey, specifying who orders, pays, receives, certifies, and the deadlines for review and objection. A survey is highly recommended for land purchases. Reviewing these components is a key part of the colorado real estate contract process.

Disclosure, Inspection, Due Diligence, and Insurability

Sellers are typically required to provide a Seller's Property Disclosure form by a deadline, revealing known conditions. Buyers have a right to conduct Inspections of the property (physical condition, systems, access, etc.) and perform Due Diligence (reviewing documents like leases, permits, environmental reports, zoning). The contract sets strict deadlines for Buyer's Inspection Termination or Inspection Objection, and subsequent Resolution. Similar deadlines apply for reviewing Due Diligence Documents. Failure to object timely usually implies acceptance. This section also addresses the Buyer's right to verify the availability and terms of Property Insurance. Understanding these rights is fundamental to the colorado real estate purchase agreement.

Closing Details: Documents, Costs, Prorations, Possession

This section details the logistics of the closing. It specifies the type of deed the Seller will provide (e.g., General Warranty, Special Warranty - which affects the Seller's guarantees about the title). It requires payment of liens and outlines the allocation of closing costs and fees between Buyer and Seller. It covers prorations for items like taxes, HOA dues, and rent (if applicable). It addresses Association Status Letter fees, potential tax withholding (FIRPTA for foreign sellers, Colorado withholding for out-of-state sellers), and finally, the specific date and time the Buyer receives Possession.

Default Scenarios and Available Remedies

This critical section outlines what happens if either party breaches the contract. If the Buyer defaults, the Seller's remedies depend on which box is checked: Specific Performance (Seller can sue Buyer to force purchase or seek damages) or Liquidated Damages (Seller's sole remedy is typically keeping the Earnest Money). If the Seller defaults, the Buyer generally has the right to terminate and receive their Earnest Money back, sue for specific performance (forcing the sale), or sue for damages. This is a critical part of any real estate sales contract.

Mediation, Legal Fees, and General Provisions

The contract mandates attempting mediation to resolve disputes before litigation. It usually states that the prevailing party in any arbitration or litigation will be awarded reasonable costs and attorney fees. Other general clauses cover requirements for notices, the fact that the written contract constitutes the entire agreement (superseding prior discussions), survival of certain obligations after closing, and Colorado law governing the agreement.

Key Considerations When Using the Colorado Land Purchase Contract

• Accuracy and Detail: Ensure every applicable blank is filled correctly and clearly. Ambiguity leads to disputes.
• Deadline Management: Dates and deadlines are strict. Missing one can have severe consequences. Use a calendar to track them diligently.
• Disclosures: Sellers (including FSBO) have a legal duty to disclose known adverse material facts about the property. Using the standard DORA disclosure forms is highly recommended.
• Title and Survey: Don't underestimate the importance of thoroughly reviewing the title commitment and obtaining an appropriate survey for land transactions.
• Water Rights Complexity: Especially when you sell colorado land or buy it, understand that the water rights section requires careful attention and potentially expert advice.
• Role of Title Company: They act as a neutral third party to handle closing funds and documents according to the contract's instructions. They do not represent either party legally.
• Recommendation for Legal Counsel: Whether you are an agent dealing with a complex situation or an FSBO party, having a qualified Colorado real estate attorney review the completed contract before signing is prudent. They can advise on risks, suggest modifications for unique situations, and ensure your interests are protected.

The Land Sale Process After Contract Signing

Once the Contract to Buy and Sell Real Estate Land is fully signed (reaching "Mutual Execution of Contract"), the process typically involves:

1. Depositing Earnest Money with the Holder.
2. Opening the file with the Title Company.
3. Buyer conducting Inspections and Due Diligence within deadlines.
4. Buyer working with lender on Loan Approval and Appraisal (if financed).
5. Negotiating and resolving any Inspection or Title Objections in writing by the Resolution Deadlines.
6. Confirming all conditions are met or waived.
7. Preparing for Closing (final figures, insurance, utility transfers).
8. Attending Closing: Signing documents, transferring funds, and conveying title via the Deed.

Disclaimer: This article provides general information regarding the Colorado DORA Contract to Buy and Sell Real Estate Land form. It is for informational purposes only and does not constitute legal advice. Land transactions can be complex, and every situation is unique. You should consult with a qualified Colorado real estate attorney, financial advisor, or tax professional for advice tailored to your specific transaction and circumstances BEFORE signing any legally binding contract.