FACTS: The buyer and seller entered into a binding contract for the vacant land. During escrow, the seller received an offer for $50,000 more than the agreed upon price in the initial contract.  The seller has now decided to unilaterally “cancel” the contract and proceed with the second buyer for more money.  The buyer refuses to cancel and intends to record the purchase contract thereby “protecting’ his position.

ISSUE: Should the buyer record his contract to “protect” his position?

ANSWER: No.

DISCUSSION:         

There are statutory penalties for improperly recording a document, including treble damage and attorneys’ fees, A.R.S § 33-420.  The buyer should therefore not record the contract, thereby providing the seller a potential claim against him.  The proper mechanism is for the buyer to file suit for specific performance.  Once the lawsuit is filed, the buyer may record a notice of lis pendens, which provides notice to all future buyers of the contract and pending litigation.