FACTS: A buyer and seller enter into an Arizona REALTORS® Residential Resale Real Estate Purchase Contract (Contract).

Two (2) weeks into the Contract, the listing agent asks the lender for an LSU. The lender declines to provide the LSU, stating the lender is too busy and is not required to provide the LSU.

ISSUE: Is the lender obligated to provide an LSU upon request?

ANSWER: Possibly

DISCUSSION;

The Lender is not a party to the Contract. However, Section 2a of the Contract states:

Pre-Qualification: An AAR Pre-Qualification Form is attached hereto and incorporated herein by reference.

Section 2e of the Contract further states:

Loan Status Update: Buyer shall deliver to Seller the LSU with at a minimum lines 1-40 completed describing the current state of the Buyer’s proposed loan within ten days after Contract acceptance and instruct lender to provide an updated LSU to Broker(s) and Seller upon request.

Lines 30-31 of the Pre-Qualification Form state:

Buyer has instructed, and Lender agrees to provide loan status updates on the AAR Loan Status Update form to Seller and Broker(s) within ten days of Contract acceptance pursuant to Section 2e of the Contract and upon request thereafter.

Therefore, if the Lender has signed line 40 of the Pre-Qualification, he/she has agreed to provide the LSU. If the Lender refuses to provide the LSU, he/she would be in breach of contract with the Buyer, inasmuch as the Pre-Qualification Form has certain terms to which the Lender has agreed to by signing line 40.