Where Real Estate & the Law Intersect
Real estate law is filled with legislation, contracts, and regulations. This intellectual and juridical realm is in stark contrast to the physicality of neighborhoods, new homes, and fixer-uppers. Buying a new property is an exciting venture, but it’s more complicated than choosing the unit with the sleekest appliances and perfect location. Mostly, working with real estate attorneys may be recommended or even legally required.
Real Estate Law
Real estate law creates the boundaries, requirements, and procedures for property transactions. Examples of property transactions that fall under real estate law include buying and selling property, financing, and leasing.
Real estate law focuses on the physical land, also called “real property,” and the resources and structures on it. Real estate can change from state to state, as it is governed by state laws. It can also be impacted by local regulations and homeowners’ association rules.
Generally, real estate law is separated into two categories: Commercial and Residential. Both involve real estate contracts and mortgages, which real estate attorneys assist with. Real estate lawyers also deal with foreclosure, eviction, and housing discrimination.
Real Estate Law and Property Transactions
In certain U.S. states, the law requires folks to retain a real estate lawyer, including the following:
- New York
- North Carolina
- West Virginia
The law in other states requires a lawyer to provide a title opinion showing that an attorney has reviewed the title examination and sees no obstacles to the transaction. States that require this include:
- North Dakota
- South Dakota
Sometimes, state laws may not dictate the requirement of a real estate lawyer, rather a mortgage lender.
Irrespective of state laws mandating the involvement of real estate lawyers, hiring an attorney is important for tricky or complex issues. When a client invests in a real estate lawyer, they’re typically saving time, money, and protecting their interests. Real estate attorneys deal with:
- Short sales
- Neighboring structure crossing property lines
- Flood and earthquake zones
- Existing legal disputes involving the property
- Zoning issues
- Environmental issues
Foreclosures and Real Estate Law
A foreclosure happens when a lender tries to recover the amount still owed on a defaulted loan by taking over and selling mortgaged property. Defaults are usually triggered when residents miss too many payments, but it can also happen if there are other stipulations in the mortgage document.
Foreclosure laws can vary by state. In general, foreclosures follow these steps:
- The borrower misses or defaults on a payment.
- The lender sends a missed payment notice.
- The borrower misses a second payment.
- The lender sends a demand letter.
- The borrower misses a third payment.
- After 90 days of missed payments, the lender sends a notice of default and hands the loan to the lender’s foreclosure department.
- The reinstatement period: The borrower usually has another 30 days to settle the debt and reinstate the loan.
- The lender will begin to foreclose if the homeowner has not settled the debt.
- Foreclosure: The lender will seize the property.
Generally, steps one through eight are considered the pre-foreclosure process. The exact timeline can vary by state, with average numbers including such lows as Wyoming = 173 days, whereas Hawaii = 3,068 days. The US average number of days is roughly 922.
Evictions and Real Estate Law
An eviction occurs when landlords legally remove tenants from the property and reclaim it.
Evictions, like foreclosures, are based on state law. A landlord might evict a tenant for several reasons:
- Failure to pay rent
- Property damage
- Violating the lease terms
- Illegal activity
- Desire to repossess the property
The eviction process varies by state, but generally follows this pattern: The tenant gives the landlord good cause to evict, such as unpaid rent. The landlord provides the tenant with an eviction notice. The landlord files an eviction lawsuit if the tenant does not resolve the issue.
Landlords own the property, and they have a right to set rules for its usage. However, they also have certain obligations, including maintaining the livability of the unit. Tenants have a right to enjoy the property in line with the lease agreement, but they also have a duty to pay rent on time and abide by the lease. A real estate attorney can represent landlords or the tenant in court cases that settle these issues.
Housing Discrimination and the Law
Housing discrimination occurs when a lender or seller treats a buyer or renter differently based on a protected aspect of identity. According to the Fair Housing Act, it is illegal to harass people due to their color, race, sex, religion, disability, and familial status.
Discrimination in the housing market is illegal. This includes refusing to rent or sell to certain individuals, refusing to negotiate, setting different terms or privileges, and falsely denying that a house is available for inspection.
Housing discrimination can also occur more subtly. One example is when realtors guide buyers or renters towards or away from specific neighborhoods based on their protected class.
Along with the federal Fair Housing Act, many state laws also protect people from housing discrimination.
Potential Clients Searching for a Real Estate Lawyer
If you’re dealing with a challenging real estate situation, a real estate lawyer can prove helpful. Scheduling an initial consultation with a real estate attorney can help you find answers to your questions and receive guidance on your potential options.
Recommendations for finding the right real estate attorney include:
1. Choose an attorney who focuses on real estate law. This may seem obvious. However, if you have never hired a lawyer, you may not realize that a very experienced criminal lawyer cannot help you with your real estate legal needs.
2. Choose an attorney in your local area. You want to work with a lawyer who understands your local laws and regulations.
3. Choose a local real estate lawyer you feel comfortable with. If you don’t click with the first attorney you speak with, call another until you find someone you can work with.