Real Estate Information - continued
Real estate transactions are governed by federal statutes, state statutes and common law established by court interpretation of those laws. Legal issues relate to acquiring, financing, developing, managing, constructing, leasing and selling commercial and residential properties. Buying and selling real estate is more complicated than buying or selling expensive goods, such as a car. With real estate, many different people have an interest in the same property, tax consequences are more complicated, and possession is not necessarily indicative of ownership. An experienced real estate attorney can help you sort through all the difficult decisions and negotiations involved in real estate transactions.
State and local rules vary widely from jurisdiction to jurisdiction. The state and federal laws encompass everything from ownership of land and buildings to related issues such as financing, leasing, construction, taxes, environmental rules, and a multitude of other issues. A competent and experienced real estate attorney can protect a party’s interest in both routine and complex transactions and disputes.
Real estate terminology can be confusing, especially to a first-time home buyer. The attorneys at Mooney & Associates, Attorneys at Law, experienced in real estate law, can help the buyer or seller understand the terms and concepts involved in the transaction. The following are other terms involved in a typical real estate transaction: An appraisal is an estimate of the value of the real property made by a third party not involved in the transaction, comparing the sales price to the value of a similar property in the area. Mortgage lenders normally require an appraisal before they will make a loan to the buyer. An assessment is the charge for an improvement completed by the local government that is beneficial to adjoining property owners, such as a sidewalk or road work leading into the property. The assessment is proportional to each property owner for the cost of the improvement. A deed is the document that establishes the transfer of ownership of real estate, and includes the names of the buyer and the seller and the property’s legal description. The deed is signed by the person transferring the property. The deed may also make the buyer responsible for other claims against or conditions on the property. It is extremely important that the deed is accurate and completely executed. The deed must be in writing and follow all state laws for property transactions. A deed should be recorded in order to make the ownership change a matter of public record. A home inspection is the process in which an independent home inspector gives a detailed written report to the buyer of the condition of the property that he or she is considering buying. The unbiased evaluation will allow a buyer to know what work needs to be done now and what work will possibly need to be done in the future on the property. Obtaining a home inspection and reviewing the results with an experienced real estate attorney can allow the home buyer to be in the best position to negotiate his or her purchase. A whole house inspection will uncover defects that may not be readily apparent to the buyer. Specific other inspections may be requested at the buyers expense, such as for termites, etc.
A settlement, or closing, is the meeting during which the property ownership is officially transferred from the seller to the buyer. The buyer and seller, their attorneys, real estate agents and the lender typically attend the closing. The closing involves settling any open issues, balancing and verifying the closing statement, and signing all documents necessary to complete the transaction. It is important to have an experienced real estate attorney, such as the attorneys at Mooney & Associates, Attorneys at Law, to represent your rights at the settlement. At that time, the attorney can explain all closing costs and verify that the costs are being appropriately allocated between the buyer and the seller. The closing documents include promissory notes, mortgages, deeds, security agreements, financing statements, guarantees, and loan agreements. Mooney & Associates, Attorneys at Law have the knowledge and expertise to prepare all the documents and to review and explain the legal effect of the closing documents in plain English. We will work with you at every stage of your real estate closing. If problems are discovered along the way, we take steps to help you resolve those problems so that the closing is not needlessly delayed.
As the time for closing approaches, we coordinate the scheduling of the settlement with out client, the sellers, the agent, and the lender. The contract and loan documents are reviewed, payoff information for existing loans on the property is obtained and all necessary closing documentation is prepared. At closing: the deed, loan documents and other legally required documents are signed, and all funds are obtained and disbursed. We insure that the closing process is conducted according to the terms of the contract, the lender’s instructions and all applicable laws. We can provide you with title insurance.
Contracts
Buying a home is one of a person’s largest investments during their lifetime. Residential real estate transactions are covered by numerous state and federal laws. The requirements established by state law differ significantly from one state to another. Several different contracts are involved in a typical residential real estate transaction. A listing agreement is the contract between the seller and the listing broker. It sets listing terms, the seller’s preferred sales price, and the commission rate. Most of these conditions are negotiable, including the commission. The listing agreement is critical to the seller, and he or she should review it carefully and have it reviewed by an attorney. Once a broker produces a willing and able buyer, the seller owes the broker his full commission, even if the seller decides not to sell.
The agreement to sell between the buyer and the seller of real estate must be in writing. The terms of the purchase contract are typically negotiated through a series of offers and counter-offers. Other possible contracts include property insurance, title insurance, easements, sale of personal property and others. The terms of all these contracts are negotiable and can significantly effect the buyers financial well-being and the success of the transaction. An experienced real estate lawyer can protect your rights and insure that you achieve the terms that are in your best interest.
The agreement to sell real estate between a buyer and a seller is governed by the general principles of contract law. The statute of frauds requires that real property contracts must be in writing. Title to real estate must be marketable, which means it must be free and clear of all encumbrances, liens, clouds, litigation risks, and other title defects. The buyer typically employs a title insurance company to perform a title search. The searcher examines the public records in the county in which the property is located, mapping a chain of title by examining all the recorded deeds concerning the property. The title searcher will also determine whether there are any encumbrances upon the property, such as mortgages, unpaid real estate taxes, liens for municipal improvements, unpaid federal taxes, government claims, legal judgments, foreclosures, condemnations, covenants or easements. A title insurance company will insure the buyer against losses caused by a title being invalid.
Purchase agreements usually require that the title to the property be marketable. The seller must have proof of title to the property and the proof that third parties have no undisclosed interest in the title. A buyer uses a title insurance company or an attorney to determine whether the title is marketable. In order to pass title, a deed with an accurate property description must be signed and delivered.
Mortgages
The most common method of financing real estate transactions is through a loan secured with a mortgage on the property purchased. Many mortgage loan programs exist, and the loan structure, terms and source of funding can effect the loans interest rate and the size of the monthly payments. The source of the funding can also effect the amount of the down payment and closing costs.
A mortgage involves a transfer of an interest in land as a security for the obligation. A borrower typically repays a mortgage in installments which include both interest and principal payments. If the borrower doesn’t make payments, foreclosure can result with the lender declaring that the entire mortgage debt is due immediately. Failure to pay the mortgage debt once foreclosure occurs leads to the sale of the property interest to pay for any remaining mortgage debt. The actual foreclosure process depends on state law, the terms of the mortgage and whether other liens exist on the property. Many states allow late payments to avoid foreclosure, and many lenders attempt to work out a payment plan in order to avoid a foreclosure. If a lender is threatening foreclosure, a borrower should immediately contact a competent, experienced real estate attorney, the attorneys at Mooney & Associates, to protect the borrowers interest and pursue all available resolutions to this problem.
A conventional loan usually requires a down payment of ten percent or more of the loan amount. Such loans include loans secured by government sponsored entities such as Fanny Mae (FNMA) and Freddie Mac (FHLMC) and loans that are funded by private investors for higher loan amounts, which typically carry a higher interest rate.
The federal government and other state, local and private entities have developed programs to provide mortgage loans with a lower down payment. A first-time home buyer or a buyer with a low to moderate income may be eligible for a mortgage insured by the Department of Housing and Urban Development (HUD) through the Federal Housing Administration (FHA), which insures the loans. Although a qualified buyer may be able to obtain an FHA loan with a down payment of three percent of the loan amount or less, the maximum size of the FHA is limited.
Veterans may qualify for loans guaranteed by the Veteran’s Administration (VA). VA mortgage loans offer a low or no down payment with many of the same benefits of the FHA loan. A borrower with bad credit who may not qualify for a conventional loan may consider a sub-prime loan or seller financing. Seller financing would require additional documents to be drawn up between the buyer and the seller. A borrower with a poor credit history can expect to pay a higher rate of interest for such a mortgage.
The experienced real estate attorneys of Mooney & Associates, Attorneys at Law, will give clients the guidance that they need to succeed in applying for the appropriate loan and succeeding in the complicated residential real estate transaction.
Real estate transactions and disputes involve many laws which vary greatly from state to state. If you are buying or selling real estate or are involved in a dispute regarding in interest in real estate, it is in your best interest to contact Mooney & Associates’ experienced real estate attorneys to make sure that your rights are protected.
Construction Law
Construction industry in the U.S. has seen unprecedented growth in recent years. Construction of both residential and commercial buildings has increased rapidly with the growth in industry and homes. However, rapid growth has also increased construction related disputes. If you are faced with a construction related legal issue, you need the assistance of an experienced real estate attorney.
The construction contract is the essential document which sets forth the rights and responsibilities of each party to the agreement. It is important that you read the document carefully and that you understand all of it. The legal consequences may not be obvious, so it is important that you have an attorney review it with you. While some compromise may be necessary, you need to be certain that this truly is the agreement that you want to make. If it is not, you should not sign the agreement unless the changes you want are made. You will be legally bound by this contract, and there is no defense to say that you did not read or understand it.
The contract should explain exactly what the contractor will do and how much the property owner will be expected to pay for what the contractor does. Most construction contracts are standardized forms supplied by the contractor. A typical construction contract will set out a time line for completion of the project, scheduled payments, penalties for late performance, and a method by which to resolve disputes. When reviewing the contract it is important to determine what are reasonable expectations from each party. Time limitations should be realistic, and fees and expenses charged should be acceptable to the property owner. All these things need to be acceptable to you before signing the contract. The construction contract is the entire statement of the contractor-property owner relationship. Your best protection is to be completely familiar with every aspect of the contract.
Despite both party’s best efforts to make the construction contract acceptable, disputes often arise during a construction project. Disputes can cause delays and add expense to the project. Disputes that arise at any time are costly and consume a great deal of everyone’s time and energy.
Most construction contracts describe how disputes are to be resolved. Many contracts will have parties use alternative dispute resolution mechanisms, such as arbitration or mediation, rather than take a dispute to court. If the contract requires alternate dispute resolutions, that is how disputes will be heard. If it is specified in the contract, it is not optional. On the other hand, alternative dispute resolution methods are generally faster and less expensive than traditional litigation which works to the advantage of both parties. Construction disputes can create massive legal issues including liens upon the real estate. Prior experience and knowledge of potential issues by an experienced real estate attorney may allow both parties to adequately draft the construction agreement to avoid disagreements throughout the process. Prior to signing a construction agreement, it is important to review it with an experienced real estate attorney such as the lawyers at Mooney & Associates.
Landlord/Tenant
When entering into a lease for an apartment or rental property, you need to sign documents that bind you to your decision. When you sign your name on a lease, you are entering into a contract that binds you with the other party to certain obligations and affords you certain rights. Before the contract is signed, there are laws in effect which limit the real estate rental process. There are laws that require information to be disclosed to a potential tenant about the property such as what limitations may be placed on the rental.
There are laws that govern how the agent-client relationship is set up and how much compensation an agent can receive. There are federal laws, such as The Fair Housing Act, that bind people across the country, no matter where they live. The Fair Housing Act has strict limits on the manner in which and to whom a landlord or owner may rent a property. There are many other state laws requiring obligations of both the landlord and the tenant. The landlord will be required to maintain the property in a manner that is habitable, and the tenant is required to maintain the property as they received it, or a security deposit does not need to be returned by the landlord. States have similar laws, and each state’s requirements will vary.
A lease usually binds parties to a period of time such as 6 months or a year. A lease is considered valid over that period as long as the tenant continues to pay the rent and abide by the other requirements of the lease. Leases are generally not automatically renewed at their expiration and, instead, require the parties to re-sign or re-negotiate the lease for the next term or period of time. A rental agreement may be for a short time of occupancy such as one month. The tenancy agreement is automatically renewed at the end of the period unless either the tenant or the landlord provides a written notice to the other party that it will no longer be renewed following the terms of the agreement. This type of situation is called a month-to-month rental. In addition to opting not to renew a rental agreement, a landlord may also change the terms of the agreement after providing notice to the tenant. This right is subject to certain limitations such as rent control laws and potential other laws depending on the state in which the property is located. Many times a lease is initiated for a period of time, such as a year, with a continuing form of month-to-month, allowing either party to give a certain number of days as notice to be released from the lease. If a tenant fails to pay the rent when due or consistently has loud parties resulting in property damage, a landlord may have the right to evict them and retain the security deposit. Also, a tenant may have the right to break a lease and move from a rental property if the landlord fails to make necessary repairs or to maintain the property in a habitable condition. The laws governing the rights and responsibilities of landlords and tenants are determined by the states, not the federal government. For that reason the ramifications and remedies may be very different from one location to another location across the country. In most respect, the rights of tenants have been expanded moreover than the rights of landlords because of the unequal bargaining positions of the parties.
Landlords and tenants both have various legal rights and obligations when they are involved in a real estate rental. If you have questions regarding a real estate rental transaction in which you are involved, it is in your best interest to contact an experienced real estate attorney, the lawyers at Mooney & Associates, to ensure that your rights are protected and that your interests are maintained before signing the rental agreement or lease.
Eminent Domain
Eminent domain is the power of the government to take private lands for public use. The government can determine the appropriate compensation for the owner. The general ability of the government to do this has been taken for granted throughout our history. The power is limited only by the federal constitution and by state constitutions. A real estate attorney experienced in this area of the law will be able to explain the process and your options in this procedure.
Zoning
Zoning is the process by which the local governments have the ability to regulate use of land. Zoning is initially established in order to keep competing uses from interfering with adjoining real estate or real estate in close proximity. Local zoning rules are generally set up to establish residential areas, commercial areas, agricultural areas and industrial areas. Zoning rules also establish procedures in order to request re-zoning for appropriate uses of real estate. An experienced real estate attorney, the lawyers of Mooney & Associates, will represent your best interests in order to establish a classification which meets your needs and can be approved by the zoning process.
Your Title Insurance Service
Attorney John J. Mooney, III is the authorized agent for the Commonwealth Land Title Insurance Company. Title Insurance is an insurance policy that protects an owner (or the lender) against claims for outstanding mortgages, unpaid real estate taxes, and/or liens on the property. The policy may have limits on its coverage such as excluding uses based upon zoning and governmental regulations
The premium for title insurance differs from other insurance that it is paid only one time for coverage that extends until the owner sells or transfers the real estate. Some lenders require the purchase of new title insurance each time an owner refinances the real estate. The premium for the policy is generally based upon the price of the property or the amount of loan against the property.
Although abstracting companies, which may be suggested by your broker, can issue title insurance, they do not provide the additional services such as explaining intricacies of the documents and explaining limitations on the property’s use involved in the transaction, which an attorney who is experienced and knowledgeable in real estate law will provide. The price of all title insurance is based upon conducting real estate transactions, litigating real estate disputes, and serving as a trained title insurance agent since 1987.
Inclusive rate approved by the Pennsylvania Department of Insurance and therefore by choosing Attorney John J. Mooney III to act as your agent to obtain the title insurance, you gain legal expertise at no additional cost. Attorney Mooney can also be retained to represent you in negotiating the terms and conditions of the agreement to prepare a mortgage, note or deed, and to prepare other concurrent subsequent agreements involving the real estate.