Top 7 Issues To Lookout for When Purchasing Real Estate
When you want to purchase or sell real estate, there are a range of legal options you'll need to carefully consider before you get started. In this article, we've rounded up the top seven legal issues that can arise during real estate transactions.
7. Fiduciary Liability
When something goes wrong in a real estate transaction, one party may seek legal counsel and find out that one or the other of the parties owes a fiduciary liability. Though the National Association of Realtors requires dual agency disclosure, state laws tend to be vague, so it's better to err on the side of caution.
6. False or Misleading Advertising
Covering a wide range of topics from For Sale sign bans, affinity programs, internet advertising and similar issues, these laws must be followed by your real estate agent. If there have been misleading details in the advertising or statements made that were outright false, you may have legal options to consider.
5. Americans with Disabilities Act
The Americans with Disabilities Act requires that a broker makes reasonable accommodations to work with people who are disabled, whether as clients or employees. Offices should have ramps, curb breaks, bathroom grab bars and similar accommodations in place to improve accessibility.
4. Fair Housing Act
Though violations of the Fair Housing Act only account for 1-2% of all lawsuits, they can be tricky given that local, regional or state laws may expand the act to include sexual orientation or similar classes. Including details such as “no children” or “perfect for empty nesters” can be considered discriminatory.
3. Real Estate Settlement Procedures Act
If people who are involved in settlements, real estate or closing give or receive any kickbacks for their services, they can run afoul of this federal law, which also requires you to disclose ownership in another related service provider. However, referral fees between two real estate brokers are protected under this law.
2. Environmental Issues
Asbestos, lead and other toxins that show up on properties is one of the top reasons for litigation, though it still falls far behind our first pick, which we'll get to in a minute. Brokers are required recommend experts who have the knowledge to evaluate the risk of these types of environmental issues.
1. Misrepresentation/Failure to Disclose
Accounting for 57% and 12% of all legal cases involving real estate, misrepresentation of the facts or failure to disclose information about a property that could be detrimental to its value is our top legal issue that buyers and sellers may face. Make sure you thoroughly research the property you're purchasing.
By understanding these key real estate legality issues, you can ensure that your real estate transaction goes as smoothly as possible. If your agent isn't managing these issues properly, you may want to consider obtaining legal counsel before you proceed further or to take action on issues discovered after closing is completed.