Real estate transactions are a highly complex matter that involves potential hazards and various legal issues. It is fraught with legal concerns and difficulties that rely on different factors, such as financing, special interests, and deed claims. Some errors can turn to legal disputes because one wrong move can hurt a large investment.
Buying and selling a property usually takes place among a buyer, seller, agent, broker, and lawyer. Among them, the lawyer assumes the most important role since they have to analyze documents to ensure that they are legitimate and free of any legal issues. That is why lawyers specialize in different property transactions. There are estate planning, real estate, and conveyancing attorneys that people wanting to buy or sell properties can consult.
Whether it is a complex or simple issue, it is important to have a legal consultant to help you navigate the entire transaction process and provide education about legal issues that may arise. In this article, we will discuss common legal issues in real estate and their negative impacts on a property transaction.
Misrepresentation and false advertising
This is likely the biggest reason plenty of brokers get sued. Because of the ever-competitive real estate industry, these people exert efforts to make a certain property dominate the real estate market. Often, they exaggerate or misstate the features of a property regardless if the act is intentional or not. This is a very dangerous approach that will cause serious legal issues.
This often happens when the homebuyer has already closed the deal, only to find out a problem that was not mentioned during the negotiation process. This issue may vary from property boundary, foundation, or environmental problem. In most cases, the seller may not be aware of an existing issue until the buyer conducted a home inspection.
False advertising is also another issue that involves the misrepresentation of a property. This real state issue involves unlicensed or misleading advertisements and inaccurate depiction of property, whether online or offline. A real estate advertisement that violates state license laws leads to legal penalties.
To protect yourself from issues involving misrepresentation liability, hire a property inspector to ensure the house is in good shape and free of any issues. It is also best to consult a lawyer to spot any inconsistencies in the agreement.
Incompetent agent
During the negotiation between a seller and buyer, they rely on lawyers, brokers, and agents to handle the transaction, legal processes, and documentation. But if one of these representatives fails to take charge of a particular arrangement, delays or issues may arise during the proceedings.
Incompetent agents may often cause issues regarding paperwork, undisclosed defects, financing complications. Problems may also arise if the document signed by the parties is lacking certain provisions. This leads to confusion, especially if the deed is completely free of interests or previous owners.
In commercial businesses, if the buyer fails to clarify easements, they may end up having problems when it comes to the right of way or illegally blocking the traffic. Another issue is when the agent may unwittingly or knowingly pressure the buyer to buy a house at a particular location or price range when the buyer wants to consider other properties. Most times, agents are very keen to land on a commission that they end up forcing a particular property on their client. Most state governments consider this approach as illegal that will put an agent’s license at risk as well as the reputation of the agency.
Technology challenges
Real estate agencies, lawyers, and brokers use various software programs to help them in their job, speed up processes, and ensure accuracy in property information and client details. But despite the high-tech features of these programs, there will be times when there’s a glitch, virus, or the agent fails to input the right listing or data. If the person cannot resolve the problem, which might give way to bigger complications, the buyer or seller will file legal action sothat they can get out of the deal.
If the broker or agency is responsible for the error, they are likely to encounter lawsuits and pay certain compensation to cover the damages. That is why employees need to receive proper training before they use a program or device to avoid mistakes in the future.
Legal issues concerning real estate are a very complex matter that requires the role of a legal consultant. If you think dealing with a legal issue is beyond your capabilities, hiring an experienced lawyer will help prevent legal complications. To prevent any legal liability, the best approach is to review and observe regulations that revolve around real estate. This way, you can ensure total transparency that will put you in a safe spot.