Apr
03
You might think that buying or selling a home is a relatively straightforward process, but there are actually many legal issues that can arise during a real estate transaction. These issues can cause delays and additional expenses and even lead to the deal falling through.
As shown by the 2019 data from the National Association of Realtors, 5% of home sales fall through due to legal issues. To avoid becoming part of that statistic, you need to be aware of the common legal issues that can arise in real estate transactions and how to avoid them. Lucky for you, we’ve outlined the top legal issues and provided tips on how to avoid them.
Property Title Disputes
Imagine finding your dream property only to discover that there is a cloud over the property title. Property title disputes can arise due to various reasons, such as conflicting ownership claims or undisclosed liens on the property. These disputes can delay or even derail a real estate transaction, causing frustration and financial losses for all parties involved.
To avoid falling into this legal trap, conduct a thorough title search before even closing the deal. A title search helps uncover any existing issues with the property’s ownership history and allows you to address them proactively. In addition, purchasing title insurance can provide an added layer of protection against unforeseen title defects that may surface in the future.
Contractual Breaches
Contractual breaches in real estate transactions can also be a major headache for all parties involved. Imagine you’ve agreed on terms, and suddenly, one party fails to uphold their end of the deal – it’s frustrating, to say the least. Whether it’s failing to meet deadlines, not paying as agreed, or not fulfilling other obligations specified in the contract, contractual breaches can lead to disputes and legal battles. This can delay the transaction process and even result in financial losses. To avoid such issues, it’s crucial to have a clear and well-drafted contract from the get-go. Make sure all terms are explicitly laid out, including responsibilities and consequences for breaching them.
Zoning Violations
Zoning violations in real estate transactions can quickly turn a dream property into a nightmare. These issues arise when the property use does not comply with local zoning laws and regulations. It could be as simple as building an addition without obtaining the necessary permits or running a business from a residential property. Buyers should always conduct due diligence to ensure that the intended purpose or use of the property aligns with zoning regulations. Zoning restrictions vary by location, so what may be allowed in one area could be prohibited in another. To avoid zoning violations, it’s crucial to review local zoning ordinances before purchasing a property. Consulting with legal professionals or real estate agents knowledgeable about local regulations can help navigate potential pitfalls.
Undisclosed Defects
Undisclosed defects can range from structural issues like a leaky roof or faulty foundation to environmental concerns such as mold or termite infestations. These issues can cost the new homeowner a significant amount of money in repairs and renovations. Buyers should always conduct thorough inspections and due diligence before purchasing a property to uncover any potential undisclosed defects.
Working with experienced real estate agents and inspectors can help identify red flags early on in the process. That said, working with experienced professionals such as real estate attorneys and inspectors can definitely help mitigate risks and ensure a seamless transaction. Also, stay vigilant and always prioritize due diligence at every step of the process.…