Legal Toolkit Pennsylvania Real Estate and Housing

What to Know About Real Estate and Housing

a

A real estate attorney's

motivation is about what is best for his or her client in a transaction, not whether the client decides to buy, sell or lease a house or property. In the world of sales, there can be a tendency to downplay problems in the interest of closing the deal. By hiring a real estate attorney before you sign on with a real estate agent, and before you sign any contracts, you can know in advance how best to position and protect yourself related to negotiations about real estate agent's fees, property inspection issues, offering prices and the actual buying, selling or leasing contract.

b

Buying real estate

is often the biggest investment of a person's life. It involves many serious legal issues affecting the rights and obligations of both buyers and sellers. Not only will the parties enter into a legally binding contract, but buyers will be presented with many complicated documents at closing, including those related to the mortgage loan. While most purchases proceed smoothly, misunderstandings about obligations and rights of the parties are frequent. Having an attorney to advise you about potential legal issues, negotiate the purchase contract, and explain the many loan and closing documents can help avoid those problems and ensure that your purchase transaction goes without a hitch.

c

Tenants and landlords

have rights and responsibilities to each other. Landlords, for most properties, may not deny housing to a tenant based on discriminatory reasons like race, age, sex, national origin, religion, familial status (having children or being pregnant), and physical or mental disability. Landlords have a right to request a credit report on a prospective tenant and to deny rental based on negative aspects of that credit history but they will also be required to alert the tenant of the source of negative information and some details about the report. Tenants, with signed leases, have rights to a livable residence, protecting them against unsafe living conditions and landlords have a responsibility to repair problems quickly. Tenants who put dated repair requests politely but firmly in writing to the landlord may find repairs are accomplished more quickly. Keeping dated copies of each repair request creates a paper trail for the tenant, in the event of further repair problems or lack of response. Unsafe conditions that go ignored despite repair requests may provide tenants with certain remedies, including the right to escrow rent, arrange repairs themselves and deduct costs from their next rent check. For clarification on tenant rights in your state, speak with an attorney that specifically practices in this particular field before taking any action. See "Where to Read More" for links.

d

Home Equity Loans

should be carefully considered to be sure the rate, terms, fees, and points are appropriate and understood before signing. Home owners should not borrow more than they can comfortably pay back and should be very wary of any lenders advising them to take more than the value of their home. Shopping the loan among various lenders will allow an opportunity to see offers side-by-side before finalizing the selection. Be sure to know the length of the loan, interest rate, terms, current and future monthly payments, and insurance and/or fees that may not be included in the monthly quote. Determine whether and how the interest rate will change at any time during the loan, if there are balloon payments built in, what fees you’ll be charged at closing, and whether optional credit insurance is included.

e

Renovations and New Home Builds

present their own set of possible legal and contract issues that a real estate attorney can help to navigate in advance, if you seek legal help before documents are signed. Once contracts are signed, you will be stuck with what is on the paper, committing you to a particular property, contractor, contract details, or construction or home equity loan. If consulted in advance, a real estate attorney can advise about the best course of action and any potential pitfalls about which to be aware. Real estate attorneys can also advise you about how tolerant you should be about work performed by your contractor and sub-contractors and how best to accomplish cooperative correction of work about which you can't (or shouldn't) be tolerant.

f

Eminent Domain

refers to the legal right of a city or state over all property within its boundaries, even private property, for the betterment of the public or the comminuty. The process is also known an "condemnation" and the land taken by eminent domain must be acquired from the owner at a reasonable compensation (fair market value) and meet requirements related to the degree of public use or community improvement that will be served. Eminent domain often comes into play when a city or state acquires property to build or improve a road, park, or utility system or to redevelop a blighted neighborhood or area and the property acquired may be complete, partial, temporary, or the obtaining of an easement or right of way. An attorney who practices in eminent domain can advise, negotiate and advocate for property owners facing eminent domain efforts.

g

New Foreclosure Options

will allow up to five million homeowners to take advantage of lower interest rates by allowing them to refinance their mortgage and will assist another four million families by allowing them to modify their loan to bring monthly payments to a level they can afford. The program is essentially split into two programs - a refinance option, and a loan modification program. The refinance option is available for conforming loans that are owned or secured by Fannie May and Freddie Mac, so this will include most loans. The only loans not eligible are FHA, VA and USDA loans. Additional requirements can be found on the "Where to Read More" section. The loan modification program may be an option for those who are no longer current on their mortgage. This program also requires servicers to sign certain contracts with the Treasury Department. Additional information on the modification program can be found on the "Where to Read More" section.

h

Purchasing Property at Sheriff's Sale

can present either a wonderful opportunity or an enormous headache. When a property is listed for Sheriff's Sale it is done to collect a debt. The bidding will start at the amount that the property owner owes and then will increase with each bid. The property will then be sold to the highest bidder. If you are the winnig bidder, you will need to have 10% of the bid price. The balance is due the Friday (the week of the sale) following the sale before 10:00 am. Many times the property is riddled with debt or liens. Usually if the property owner has not paid either their mortgage or their taxes, there are other debts as well. Legally, when property is transferred from one person to another any debts or liens that the property is subject to will pass as well and be the new owner's responsibility. That being the case, it is essential that you have a thorough title and lien search done before you even begin the bidding process.