Legal Question in Real Estate Law in Colorado
Promisory Note
I sold a piece of property and held a 5 year note with a 1 yr balloon that is due this month. The borrower asked to continue the payments for one more year. I am agreeable to that but am not sure if a new note is advisable or an extension to the existing note is necessary. Is it advisable to have these arrangements in writing?
1 Answer from Attorneys
Re: Promissory Note
Morning,
It is not merely advisable, it is absolutely necessary. Are you saying all you have is an unsecured promissory note? Given that we are talking property, the note should have been secured through a deed of trust or a mortgage (this last option is far from ideal).
I have no idea of the value of the property and it appears this person has been paying so everything may be fine just through a promise. That said, the road to lawsuits is paved by hopes and agreements held in place by nothing other than poor written documents or oral (meaning not written) promises. I would contact an attorney to draft appropriate documents. Good luck.
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