Don't buy that home without a lawyer
Updated On: Aug 16 2013 10:18:48 AM MDT
By attorney Barry Miller, Special to THELAW.TV
Purchasing a home is one of the largest investments that most individuals will ever make. After the collapse and rebound of our financial sector, coupled with low interest rates, many people are shifting their investments back to real estate.
Many homeowners are upgrading to larger homes, purchasing second (vacation) homes, refinancing their existing home, or even investing in rental properties. There are many aspects of real estate that are intricate and complicated even to the savvy investor. Hiring an attorney to represent you is one of the best and inexpensive aspects of the transaction. Just as you want an inspector to review the physical building, you should want an attorney to review the title and documents for the property.
Some will say, "Well I am getting title insurance, so that will cover me." Not all title insurance policies are the same. For example, all title policies have a section entitled "Exceptions"; some of these are standard on all title policies. Many of these exceptions can be removed, making your policy stronger. Some title companies will not remove these exceptions unless specifically requested. Other agents, such as The Closing Agent, Inc., will automatically remove the standard exception when there is a survey and other affidavits signed at closing.
Many properties have restrictive covenants from homeowners associations, condominiums, or plats. An attorney can review these documents to advise you if they will impair your plans for the property. For example, a subdivision may not allow your RV, boat or commercial vehicle to be placed on the property. Additionally, some restrictions may prohibit you from operating your home-based business on the property.
Condominiums may also have other -- more restrictive -- rules regarding pets or guests that should be reviewed prior to purchasing a property. Some condominiums allow renters and leases, while others have restrictions on the ability to rent or lease the unit. Additionally, a recent case out of South Florida allowed a condominium to prohibit renters after an amendment to the declaration of condominium, even while previous condominium owners rented the property for years and claimed they were grandfathered in. Also, capital reserves of an association, as well as the physical state of the property, should be analyzed prior to making a purchase.
Lastly, and probably most important, the contract should be reviewed to ensure that all language is explicit and clear as to the rights and duties of both the buyer and seller. If the parties are clear as to their rights and duties, the transaction will be much smoother and reduce the likelihood of conflict prior to closing.
The author, Barry Miller, practices real estate law in Orlando, Fla.