Investing in real estate is a core component of maintaining a sound financial portfolio. However, real estate can also have its legal challenges. If the necessary legal documents are not properly prepared, unforeseen events could result: from a third-party claiming ownership to a property you thought you owned or loss of substantial investment funds due to a bad contract or fraud.
Our law firm recently handled a real estate matter for a client, who wanted to modify her mortgage and put the property up for sale. However, during the course of her divorce, certain agreements acknowledged her sole ownership of the property, but none of the deeds in public records were ever modified to be consistent with the divorce decree. The warranty deed showed the property legally still belonging to both our client and her ex-husband, despite what the divorce papers said.
The mortgage company refused to modify her mortgage without the ex-spouse simultaneously executing the mortgage modification documents. We eventually were able to contact the ex-spouse on our client’s behalf to have him deed the property solely to our client. You can imagine what that encounter looked like. Thereafter, our client was able to proceed with the mortgage provider and offer her property up for sale without the prior encumbrances on the property.
Deeds and public records are not the only major legal issues that could arise in a real estate transaction. Our law firm litigated a case for a long-standing client, who invested over seven figures into a development project with a reputable company. Our client properly registered liens in the public record on the anticipated properties and the liens were to remain until the properties were fully developed and our client fully compensated.
The operative agreements had several gaps and contradictions. Eventually, the development company was able to swindle our client, right after our client inadvertently released the liens on the property. It was only after the contracts fell apart, that our client got our office involved. We were able to successfully litigate against the developers and obtain a seven-figure judgment on behalf of our client.
If you’re considering investing in, purchasing or selling real estate, then consider:
- Involving legal support at the onset of the transaction(s). Legal counsel should be able to negotiate and draft the operative documents, organize the closing, and facilitate escrow instructions;
- Researching the desired property, previous owners, or the parties at the negotiation table. Is the developer or escrow company a reputable company? What referrals can they provide, etc.; and
- Analyzing whether you can financially maintain the property through the ups and downs of the forever changing economy. While our office can assist with foreclosure or restructuring matters, we try to evaluate at the onset whether the transaction is a beneficial short-term asset to even had.
Bottom line: if you want to avoid unpleasant consequences which may not be able to be undone, contact legal counsel to assist with your real estate transactions. It would behoove you to seek professional help to assist with drafting agreements, the exchange of funds, registering or releasing public records, and providing the management of the property amongst other sophisticated tasks. If you are considering evaluating, acquiring or disposing of real estate, our law firm can help you achieve your goals.
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