Real Estate Law

Real estate Law

Residential Real Estate

The purchase of a home is usually the biggest purchase a person will make in their life, and it is one that most people only make once or twice. Having an experienced attorney to guide you through the sale or purchase of your home will not only protect your financial and legal interests, but it will also make the process less stressful. A real estate attorney can provide guidance and let their clients know what is normal and what is not, and help navigate the problems that inevitably come up as it is a process we are familiar with and work with daily.

Commercial Real Estate

While it is true that commercial real estate transactions share many of the same steps with residential real estate transactions, there are many differences.

Residential real estate includes single-family homes, townhouses, and condominiums. Commercial real estate includes industrial, retail, and office buildings or office condominiums, and apartment buildings.

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In residential transactions the Buyer is given the opportunity to have a general building inspection done. They can also have specific testing done for suspected deficiencies such as Radon, Lead, Septic, Mold, or any other issues found in the general inspection.
In commercial transactions there is a due diligence period. The length of this period is usually longer than in residential transactions and its length is negotiated by the parties. During the due diligence period, the Buyer can have any inspections they want but they don’t need to specify the inspections being done. At the end of the due diligence period, the Buyer then notifies the Seller if they intend to continue with the purchase or if they would like to re-negotiate the terms of the transaction.

Residential mortgages usually have a limit of an 80% Loan-to-Value (LTV) ratio, although some specific mortgages allow for a 90% LTV or even higher with FHA/VA loans. The amortization time can be as high as 30 years.
A commercial mortgage will usually cap out at a 70-75% LTV ratio with a 15-25 year amortization schedule and the interest rates will be about 1-2% higher than a residential mortgage. Oftentimes there is a balloon payment where the mortgage must be paid off or refinanced in 5 or 7 years. However, if a Buyer is a user and not an investor and is also looking to borrow money for their business, they may be eligible for an SBA loan (Small Business Administration) with a 90% LTV ratio.

An appraisal is performed by a bank to determine the current value of a property. A typical residential appraisal costs around $350-$500 and takes about a week. The cost of a commercial appraisal is anywhere from $1,000-$3,000 and can take weeks. One of the reasons for this higher cost is the result of adding and creating an income approach to value (money generated by rents) that is not included in the residential appraisal.

In commercial transactions, where the Buyer is getting a commercial mortgage, the mortgage company will often require a “Phase I” Environmental study. This study will evaluate prior uses and neighboring properties and an on-site investigation will occur to determine if there might be any environmental issues. If there are environmental issues, a ‘Phase II’ will be ordered where certain tests will be done to determine potential environmental issues and contamination. These tests cost several thousand dollars or more depending on the size and previous uses of the property.
A residential mortgage does not require any environmental studies. A Buyer can elect to have certain studies, but that is rare in a residential transaction.

When a Buyer wants to make an offer on a residential property, a residential real estate contract is drafted and signed by the Buyer and presented to the Seller. In a commercial deal, a Letter of Intent is submitted to briefly outline the terms and conditions proposed by the Buyer. Once the Buyer and Seller have come to an agreement as to the terms, an Letter of Intent for Sale or Lease reflecting those terms is created, oftentimes by an attorney. The LOI is not binding, and a specific time frame is put in the LOI outlining the time both parties have to execute an agreement.

Many times, when people are buying or selling residential property, some emotion is involved with the deal. It might be because it was their first home, where they raised their family, where they were able to take care of extended family at an important time in their lives, or it might be a place where they made many friends.
In a commercial deal, it often comes down to location and math—especially for investors. How big is the building, how many parking spaces are there, what is the average daily traffic volume at the location, what are the rental rates, what is the cap rate? There are fundamentally different questions and considerations being analyzed and vetted during commercial transactions.

Buyers

The services we provide residential buyers include:

Review the real estate contract to ensure that the terms are fair and favorable to you.
Negotiate the terms of the real estate contract with the seller.
Review the home inspection and make requests of the seller to repair or provide credits for defects not known until the inspection.
If buying in a homeowner’s association (HOA), review documentation provided by the HOA to ensure they are financially solvent, that there are no pending lawsuits or special assessments, and that the association dues are paid by the seller.

In the event you are buying and selling simultaneously, help resolve any issues that come up and help ensure that the process happens seamlessly.
Coordinate with the seller’s attorney, title company, lender, and realtors to make sure all deadlines are met and closing takes place as scheduled.
Attend the closing with the client to help explain each document to be signed and answer questions throughout the closing.
Resolve any disputes that may arise prior to or at the closing.
After closing, ensure that deeds are recorded and that the buyer receives title insurance policies.

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Sellers

The services we provide residential buyers include:

Review the real estate contract to ensure that your interests are protected.
Negotiate contract modification requests from the buyer, as well as repair or credit requests for defects found in the inspection
If selling in a homeowner’s association (HOA), order paid assessment letter, budget, bylaws, and other documentation required to be provided to the buyer.
Order the plat of survey from the land surveyor to be provided to the buyer at closing.
Run a title search on the property, order title insurance policy, and resolve any title issues before closing.

Coordinate with the buyer’s attorney, title company, lender, and realtors to make sure all deadlines are met and closing takes place as scheduled.
In the event you are buying and selling simultaneously, help resolve any issues that come up and help ensure that the process happens seamlessly.
Prepare all the documentation that is needed to facilitate the sale of your property including the deed, limited power of attorney, bill of sale, and affidavit of title.
Prepare documentation to ensure all state, county, and city property taxes are paid so the property can be legally transferred.
Resolve any disputes that may arise prior to or at the closing.
After closing, ensure that deeds are recorded and that the buyer receives title insurance policies.

1031 Exchanges

A 1031 exchange allows the owner of a property to defer payment of capital gains taxes when the equity in one or more properties is used to buy a property of equal or greater value, within certain time limits.
This allows for owner to use 100% of the equity towards purchasing a new property, as opposed to the equity, less taxes.
They allow for money that would otherwise be taxed to be invested into property, allowing the owner to buy a more valuable property and potentially earn more off that investment.

Leases

Leases do not have to be a one-type-fits-all. They are extremely customizable.
We can review your existing residential or commercial lease, ensuring that it complies with applicable state and local laws and that you are provided with the maximum protection in the event of a dispute.
We can help you negotiate your lease.

Title Transfers

A title is the document that shows you are the legal owner of a property.
Title transfers usually happen when a property is bought or sold; however, they can happen at other times. Examples of when title might be transferred is when a spouse is added or removed, when a property is gifted, when the property is transferred to a trust or LLC, or when parents transfer property to their children.