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Real Estate Law 101

Real Estate 101: The Statute of Frauds is a really old law that originated in England in 1677. It requires that certain transactions must be in writing, signed by the party to be charged, basically the person being sued. Real estate purchases are one of the transactions covered by the statute of frauds. In real estate transactions, the SOF further requires that the writing contain a description of the property, a description of the parties, the price, and any agreed to conditions of price or payment.

There are a few exceptions to this rule. Part Performance is when someone has paid all or part of the purchase price, taken possession, and/or made substantial improvements to the land. For example, if Bob made an oral contract with Sue to buy property, paid her a down payment of 25% of the agreed purchase price, and built a house on the land, then even though the SOF would invalidate the oral contract, Sue could argue that Bob’s partial performance proves the existence of the contract. In addition to Part Performance, Equitable estoppel and Promissory estoppel may be used to prove an oral contract for the sale of land. Equitable estoppel is based upon an act or a representation. Promissory estoppel is based upon a promise.

Once a contract has been signed, a purchaser becomes an equitable owner of title at the time of the execution of a binding contract. Under the common law, the risk of loss is on the buyer after signing the contract for sale. In other words, if the house burns down between the signing of the contract and the closing, the risk is on the buyer. The buyer will still have to close the deal. There are some states that have a different rule. States that have enacted the Uniform Vendor and Purchase Risk Act hold that the risk of loss is placed on the seller unless legal title or possession of the property has passed. There are a minority of states have passed this statute. So, in a majority of states, the risk of loss is on the buyer.

Real Estate Law in Today’s Economic Climate

Real estate law has a very prominent place in the United States regardless of the economy. The nature of this type of law, however, does change according to the economic climate. During upward economic swings when the industry is filled with new development deals, sales, and loan applications, real estate attorneys are needed to write up contracts for new deals, demand payment for loans, draw up agreements for development plans, and more. During difficult economic times, these attorneys focus more on foreclosures, bankruptcy, and loan refinancing.

What Real Estate Lawyers Do

The demand for attorneys experienced in this area of law is extremely high at the current time, as most United States citizens have experienced some form of financial loss. These attorneys work with a variety of different individuals who are trying to take the best route concerning the losses they are experiencing. These clients include:

Developers–many developers are stuck in high cost construction deals that were put in place before economic problems arose. They may be trying to find ways out of the contracts they are currently bound to regarding these deals.

Private investors–investors who put large amounts of money into construction deals prior to the economic collapse likely lost large sums of money and want to find out about their options.

Landlords–many tenants are now defaulting on rent and landlords want to know about their rights and options

Commercial tenants–tenants defaulting on rent also want to know if they have any legal options that may allow them to stay in the space they are currently in

Individual homeowners–many homeowners are now unable to pay mortgages and are fighting foreclosure

Real Estate law has a solid place in our society and understanding its function is important if you are working in the industry.

Legal Issues Covered by Real Estate Law

There are a number of legal issues that can be settled by lawyers who are experts in real estate law. Among these, the following are some of the most popular: Real estate purchase and sales – lawyers that are experts in this field of law can provide legal services to sellers, buyers, and brokers regarding issues related to the purchase and sale of real estate property. They can help specifically on contract negotiations related to purchases and sales of land, office building, apartment complexes, tax issues, etc.

Litigation – you can also avail services on dispute resolution including litigation, restructuring financial obligations, loan participation, recovery of secured or unsecured assets. Other issues that you can settle with your lawyer are rescission and other fraud/mistake claims.

Commercial leasing – clients who need representations for all types of commercial leasing transactions can also avail such services from a real estate lawyer or firm. Services could cover negotiation and drafting real and personal property leases and other types of leases such as office, industrial, warehouse space, leverage leases, and the like.

Title issues – when it comes to title issues, a lawyer can help you in reviewing a title commitment. He can also give legal advice about considerations you need to take into account before closing a deal. Such considerations could include legal access to public road, document evaluations/issues such as matters visible on the property but not reflected in written documents, easements affecting property, encroachments, current owner identity evaluations, leases, liens and taxes, mineral interests, restrictive covenants, etc.

Easement and license disputes – you can also be helped when it comes to easement issues, including right of way for access, water supply, electricity transmission, drainage or sewerage reticulation, etc. They can also work to settle license issues.

Broker and agent commission disputes – this is one of the most common issues that a person in the real estate ‘arena’ encounters. A lawyer that is expert in this field can help you settle issues such as owner-broker conflicts as well as broker-agents commission disputes.

‘Finding a good lawyer’

With so many real estate law firms in town, it could be difficult for you to find one that provides highly qualified lawyers that can represent you in settling legal issues. However, by employing the right criteria, you can surely find one. Taking the following considerations can help: positive reviews, the number of cases won, testimonials from previous and current clients, the length of time in service.