A home purchase is likely to register among the most significant investments one makes during their life. The laws that govern real estate vary from state to state but are often complex and apply to multiple pertinent issues. 

Real estate law covers legal issues that arise within a transaction or during one’s ownership of real property – i.e., land (and its attached rights) and all its structures and appurtenances.

An attorney experienced with real estate transactions provides valuable legal guidance as you navigate your way through what is often considered to be a tricky process. Real estate lawyers possess the skills to ensure that your real estate transaction follows proper procedures and is done in accordance with relevant laws.  

Types of Real Estate Transactions Handled by a Real Estate Attorney

Purchases & Sales Transactions

The transfer of real estate requires several steps to complete. Unless you are an experienced investor (and current with relevant law), most of this process will be unfamiliar and fraught with risk. This is especially true for first-time homeowners. 

Finding a home to purchase is just the first step in the buying process. A lawyer experienced with real estate transactions can draft (or review) the required legally binding/enforceable contract – ensuring the terms are as favorable as possible. A qualified real estate attorney provides the necessary guidance to manage a real estate transaction’s many moving parts. These include –

  • Negotiating the terms and contingencies relevant to the deal. 
  • Preparing and reviewing appropriate documentation. 
  • Guidance while obtaining a mortgage loan. 
  • Earnest money deposits/escrow issues.
  • Types of Warranties.
  • Title Searches & the Coordination of Title Insurance
  • Representing you at closing and reviewing all closing disclosures.
  • Negotiating the date of possession or delivery. 
  • Handling potential Chain of Title or boundary disputes.
  • Plus, countless potential nuances in each transaction. 

It is essential to note that not every closing will run smoothly. The reality is that a real estate transaction can potentially fall apart even up to the last minute. An attorney representing your interests throughout and at closing can help to ensure a smooth process. 

Commercial Lease Disputes

A commercial lease is a type of legally binding contract that delineates the agreed-upon terms between a business or commercial tenant and the landlord or their representative management company. Commercial leases tend to be more complex, varied consequential terms – and significantly longer than their residential counterparts that may contain more complex and diverse terms. 

A strongly drafted commercial lease agreement can help you prevent future conflicts and, thus, potential litigation headaches and expenses. The following are a few of the commercial lease issues an attorney can assist with –

  • Financial disputes between a landlord and tenant. Nonpayment of rent due is often the primary cause.
  • Lease termination issues.
  • Representing you if the rental premises are damaged or destroyed.
  • Abandonment – a situation in which the lessee (or tenant) abandons the leased property. The tenant would still be obligated to pay the remainder of the rent due throughout and until the expiration of the lease agreement.

A Quiet Title Action

This is a type of legal proceeding that is used to discern through research and records the identity of the real property’s owner. The somewhat odd name refers to the ultimate intention of the action – which is to quiet potential objections or claims to the property’s title. 

A title that needs a quiet title action has a cloud on its title. A clouded title impacts the property’s marketability (can’t pass title cleanly) and, therefore, its value. Examples of a cloud on the title include –

  • An unresolved or disputed easement.
  • The outstanding lien which has yet to be released on record.
  • Mechanic’s liens.
  • A defect in a deed, among others. 

A clouded title refers to a claim, an unreleased lien, or anything else that may prohibit the title of the property from passing cleanly as required. A cloud typically is discovered or identified during a title search performed by a real estate attorney (usually with a trusted title company). 

  • Clouded titles that may have erroneous owners can often be resolved by a real estate lawyer using a Quitclaim deed if related parties agree. 
  • For debts that have somehow been paid, but not released on the property’s record, a petition to the court may be required if the parties do not agree. 

A title search and title insurance offer protection to any third party (for example, a lender) with an interest in the transaction. Title insurance is a requirement of any mortgage lender. Ultimately, a final title report and title commitment will be issued for review by the lawyer prior to closing. 

An experienced real estate lawyer resolves ownership issues that may be due to an encumbrance on the subject property. 

Real Estate Fraud

Real estate fraud consists of the provision of false information obtained for fraudulent purposes in a real estate transaction. According to a 2020 Federal Bureau of Investigation report (FBI), nearly 14,000 people were victimized by rental or real estate fraud in that year.  

Real estate fraud takes on many forms, which is why having legal representation and experienced guidance during a real estate transaction is so essential. 

  • Mortgage Fraud 

Mortgage fraud (also known as loan origination fraud) is considered a severe offense. At its most basic, mortgage fraud is a lie (material misstatement, omission, or misrepresentation) that influences an underwriter’s ultimate lending decision. 

Without a specific federal statute defining mortgage fraud, most states employ the FBI’s definition of mortgage fraud – which is considered a subset of Financial Institution Fraud. There are two types of mortgage fraud – for profit and for housing.  

  • Predatory Lending 

Predatory lending occurs when a lender operates unethically, with actions and decisions designed to victimize unsuspecting home buyers and borrowers. Predatory lending is a broad category of law that includes these practices –

  • Fraudulent lending policies.
  • Unfair lending tactics.
  • Deceptive underwriting lending, etc. 

Victims of predatory lenders find themselves overburdened with mortgage payment increases. These unexpected payment increases put such a financial strain on the borrowers that they have little choice but to find themselves facing foreclosure. 

  • Title Fraud

Title fraud occurs when another individual unlawfully obtains your property’s title – very often by identity theft techniques. 

For example, a fraudster could potentially obtain financing using your property as collateral. Or even worse, as the “perceived owner,” individuals may try to sell real property that they do not own – they just pretend or act like they are the rightful owner. 

  • Foreclosure Fraud 

Fraud can potentially happen at several junctures in the foreclosure process. Foreclosure and real estate laws vary by state. Some states aggressively pursue foreclosure fraud offenders, while others are more tentative to intervene. Examples of foreclosure fraud include –

  • Improper paperwork, including deeds, etc. 
  • Predatory mediators in the foreclosure process. 
  • Fraudulent evictions.
  • Document alterations or falsification.
  • Forged signatures, among others. 

A wrongful foreclosure happens when a lender begins a foreclosure proceeding even though the borrowers have met their legal obligations defined by the promissory note and mortgage.  Wrongful foreclosure is a type of civil action that can be filed contingent upon allegations of foreclosure fraud.

  •  Falsification (Forgery) of Documents 

Altering a document is an example of a white-collar crime.  Falsifying records is a serious offense that may lead to severe financial penalties, fines, and even years in prison. Examples include –

  • Providing false information.
  • Modifying or changing a document for an unlawful purpose. 
  • Forging a signature.
  • Using a company letterhead without specific authorization, to name a few. 
  • Fraudulent Disclosure or Failure to Disclose 

Most states have strict real estate disclosure laws in place to protect the public from unscrupulous real estate agents, builders, landlords, etc. However, disclosure requirements vary from state to state. 

Property disclosure laws require landlords or sellers to provide extensive material information about known defects to the property in question. Many states create their own property disclosure forms because the required information is quite extensive. These are sometimes ten+ pages.  

Disclosure requirements are quite serious in the real estate realm, with a violation considered potentially serious. Non-disclosure is a breach of the contractual obligation that requires them to deal fairly and with good faith intentions. 

In addition to the all-important residential real estate property disclosure, there are many other required disclosures in real estate. 

  • Value Fraud

Property value fraud usually happens when corrupt business people work with a dishonest appraiser to increase the value of property artificially – above its true value. This inflated value for the home is then mortgaged beyond its true value. Value fraud can also happen if a seller omits material and valuable information about the subject property and its surrounding neighborhood that would materially impact the property’s value.  

  • Rental Fraud 

Rental fraud, which is also known as rental skimming, happens when an owner absconds with the rent from tenants and pockets the income instead of using the money to properly maintain the property. 

Real Estate Litigation

If a serious dispute erupts about the property or the contract, or a real estate deal goes bad, the seller and the buyer have a lot at stake – depending on how the situation unfolds. An experienced real estate attorney is essential to avoid unnecessary liability and to reach for recovery of losses. 

Unlawful Detainer

An unlawful detainer case, which is more commonly known as eviction, involves a landlord and a tenant facing eviction.  Evictions generally happen when the tenant fails to comply with the lease’s terms. This is often due to the nonpayment of rent. 

Unlawful detainer cases can happen in the commercial and residential markets. 

Easement Disputes

An easement is simply a legal right given to one person to use another’s real property – for a specified purpose and preset amount of time. Although easements may be granted to anyone, many are for public utilities. Most easements are attached (or even recorded) to the property deed and, therefore, available through public records. There are various types of easements –

  • Easement by Prescription – an implied easement secured by adverse possession.
  • Easement by Necessity – usually the result of a legal or government action. A landlocked property will require an easement by necessity.
  • Plus, reservation, negative, public, utility, and affirmative easements, to name a few 

Partition Action 

A Partition Action is a court filing asking for the legal division of real or personal property for which two or more individuals have (or claim to have) an interest. 

The partition complaint, which is a civil complaint, is served to all named defendants. Ultimately, it may end in a court trial in which a judge renders the final determination in the property’s ownership division. 

The benefits of a partition action include the following –

  • It is probably the best option when owners cannot agree. 
  • It provides a final solution to a dispute with someone who does not wish to cooperate. 
  • It has the potential to recover some losses – i.e., down payment or mortgage payments, taxes, and even attorney’s fees. 
  • It has the potential to be sold at a higher price than if sold with non-cooperating co-owners with conflicting objectives. 

Partition Actions may be time-consuming and require time spent in the legal and court system, but with the price of real estate, there is so much at stake that the effort is well worth the eventual result.  

Did You Know?

Real estate attorneys represent the interest of those who hire them as their legal advocates. As such, at closing, the lender’s lawyer represents the interest of the lender

The Take-Away

A real estate lawyer specializes in managing and handling various real estate matters involving real transactions and ownership. Their expertise is quite beneficial for those new to real estate or those unfamiliar with the complex laws related to real estate. Qualified legal representation offers peace of mind during what can be an overwhelming process.

Considering the value of the investment, having legal representation offers valuable protection to you as a buyer, seller, tenant, owner, or builder, to name a few. Plus, should issues or conflicts arise in the future about a closing or property issue, an attorney will be ready and equipped to represent you in that matter as well.