When buying, selling, or managing property, it’s important to acknowledge how real estate laws will impact your actions. This article will help you understand what real estate law is, what issues it concerns, and the role real estate lawyers play.
Understanding common real estate law terms
When dealing with real estate law, there are a number of unfamiliar terms you may hear. These are some of the most common:
- Escrow: Money deposited with a neutral third-party until it is delivered to another when an event takes place, such as the settlement of a home.
- Earnest money: A deposit made by a buyer to show he or she is serious about the sale.
- Escape clause: A clause in a property sale contract that allows both parties to renege on the deal if terms are not met. Sometimes called a termination clause.
- Contingency: A provision in a property sale contract that states something must occur before the contract is legally binding.
- Foreclosure: Proceedings that allow a lender to take ownership of a property if the mortgage holder misses numerous payments.
- Lien: A right imposed by a bank, lender, or court that allows a property to be sold if a purchaser cannot repay his or her mortgage.
- Easement: A right to cross or otherwise use someone else's land.
- Eminent domain: A right that governments have to take private property and convert it to a public space after paying compensation.
Common issues and disputes in real estate law
Within the practice of real estate law, there are 3 common types of issues that may arise.
Buyers and sellers may face a range of disputes during the purchase or sale of property. Some of the most common include:
- Disclosure issues if a buyer feels the property owner did not disclose all relevant information, such as whether a property has major defects or if a violent crime took place on the property.
- Contingency issues if conditions stated in the purchase contract are not met.
- Easement disagreement when a building or driveway encroaches on a neighbor's land. This may need to be resolved before settlement.
Issues can also arise between tenants and their property managers. Some of the most common disagreements surrounding rental properties include:
- Tenant failing to pay rent.
- Tenant failing to keep property in good condition.
- Tenant violating lease agreement, by keeping pets for example.
- Property manager failing to conduct repairs.
- Property manager encroaching on tenant's right to privacy.
Neighbors can also become involved in a real estate law case if they cannot resolve differences. They may start legal action if they have the following concerns:
- Disputes about where the land boundaries are, and whether someone is encroaching on them.
- Complaints about noise pollution.
- Concerns about trees or other structures blocking a neighbor's view.
- A neighbor that's a nuisance or harassing.
- Pets that are noisy or that trespass on a neighbor's property.
The role lawyers play in real estate law
Ideally all property concerns would be resolved by the individual parties. However, if a private agreement cannot be reached, the parties may seek the assistance of real estate lawyers. These professionals help clients through mediation and represent them in court if their cases go to trial.
In some US states, a real estate lawyer is always required to process real estate transactions.
For example, in Alabama and New York, only licensed attorneys can conduct closings. Even if you are not required to hire a real estate lawyer, it's worth considering legal reputation.
Real estate agents often have no legal education, but an experienced real estate attorney can make sure you are protected when creating and signing major real estate documents.
Whether you are buying, selling, or managing real estate, an understanding of real estate law is crucial for navigating any issues that may arise concerning your property.
Talk to an attorney for insight into your real estate issue.