The Role Of Attorneys In Real Property Transactions
There is no difference between real and real estate property law. The two terms are usually used interchangeably to mean one and the same thing. In very simple terms, real property law deals with land and the fixtures or buildings on it. Property law can therefore be said to be a branch of real estate property law. That is not all though because like you are about to find out, there is much more into real property law than just land and buildings.
Real property law can be divided into either commercial or residential categories. To understand how the categories come in place, one has to take into account a few practical examples. Land can be owned by person A but used by person B through lease or rental agreements.
Note too that land is always bought and sold mainly because of its high value and the fact that the value always appreciates. Land can also be transferred between family members and friends though estate planning. It can also be owned by a group of individuals.
Lastly, one has to take into account the fact that state and local authorities have laws that regulate how land owners can use land. Each plot of land should at all times be used according to local zoning rules and laws with due regard to the environment. All these factors are important whether a given parcel of land can be categorized as commercial or residential.
Another important thing to note is the fact that all real property transactions usually call for a qualified property lawyer. They come in handy during negotiations and as practitioners as required by law. For instance, a company acquiring land through shares or share allotment cannot do so without a real property lawyer. The same can be said of registering a charge on land or leasing out land.
The role of an attorney
Simple real property agreements may not call for lawyers. Not so when it comes to the aforementioned real property agreements. Your attorney will assist you to do a search at the land registry where the person you intend to buy land from was registered as the proprietor of land.
The aim of the search is to find out if there are any encumbrances registered on the land. Encumbrances in simpler terms refers to ‘complaints’ or in some cases, overriding interests. Your attorney will find out if the land title has been used as collateral for a loan. He will also find out after the search if there is any other party claiming ownership of the land.
The search is important for obvious reasons. You will want a clean title. You will also want to be sure that you won’t have to deal with other parties or lending institutions later claiming that the land was charged. Such setbacks can only be avoided by undertaking proper search.
Related practice areas
Expect other legal fields to crop up as you buy or sell land. The whole process is after all, a commercial process. That means you must learn a thing or two from your attorney about the following legal areas.
Tax law – You cannot avoid tax code and other tax related issues in real estate especially if the land in question has been mortgaged. A deep understanding of the tax consequences of transaction can save you from overpaying taxes. There are other issues as well capital gains tax which is charged to the person selling or leasing out real estate property.
Landlord Tenant Law – You cannot avoid Landlord tenant law if you want to rent land. That is because the substantive law when it comes to leases whether residential or commercial is Landlord Tenant Law. The law provides for evictions and dispute resolution amongst other provisions.
Estate planning – This is important for those who wish to keep real estate within the family. The process can be long depending on the value of the real estate property in question. An attorney can come in for purposes of drafting real estate instruments (documents) or assist one to follow the required procedures where one wishes to hold property in trust for a minor.
Insurance Law – This is extremely important in real property law especially where one wants to buy land or a home in an area that is prone to high winds, forest fires or anything that can easily damage property. Your attorney will first find out if the home has been insured. This can easily affect the value of the property you intend to buy or the amount of time that will be required to seal the deal.
Point to note
Avoid trying to do everything on your own. You will notice that when it comes to real estate, the moguls always have real property lawyers by their side. They do this for several reasons. A deal can turn sour or you could realize at the last minute that you’re about to get shortchanged. However, with a real property lawyer by your side, such setbacks can always be avoided.