What Are the Most Common Property Disputes During a Purchase?
You found your dream property on Long Island. Whether it was the perfect piece of commercial real estate for your budding yoga business or the ideal home for your growing family, this is a time for a glass of champagne and congratulations. Not so fast. The process of purchasing a property on Long Island, or anywhere, really, can encounter a number of different hurdles and types of property disputes. Here are some of the most common problems that arise during the purchase property and the one piece of advice that can help you avoid them all!
#1: Failure to Disclose a Defect or Problem
For any purchaser in a real estate transaction, there is uncertainty around the history and condition of the property. Even in a small residential home or condominium, there is potential for hidden defects and problems with the property. The HVAC could be working sporadically or the basement flooding regularly. Smart buyers rely on contract clauses drafted by their real property lawyer and inspections by an expert to uncover these defects or issues, but there is also some reliance on the seller.
When a seller fails to relay a material defect on the property, the buyer feels misled or cheated. These defects could substantially alter the value of the property, turning a fail transaction into a windfall for the seller. It is not uncommon for these disputes to end up in court – often with the real estate agent for the seller also named on a complaint.
#2: Deposits and Payment of Earnest Money
It is very common on Long Island for the seller to require the payment of a deposit or earnest money at the time a real property contract is signed. It is equally common for the rest of the purchase price to be paid at closing, which could be anywhere from 10 days to six months later. What if the transaction never proceeds to closing? When a real estate transaction falls through, there are frequent property disputes over whether the deposit is kept by the seller or returned to the buyer.
How can you avoid property disputes over a deposit or earnest money? Clear language in the contract can eliminate most, if not all, of the arguments over the deposit. Your real property lawyer can help you determine what is fair and standard for your type of purchase or sale.
#3: Easements and Covenants on the Property
The title to any property, whether https://www.affordablenylawyer.com/long-island-real-estate-attorney/residential-real-estate-advice/residential or commercial, tell you the entire history of that piece of land and any improvements on the property. There will be a chronology of when the property was sold, gifted, or property lines redrawn. You can also see the history of easements and restrictive covenants that might govern or influence your use of the property. If these impositions on the property cause of an issue for a buyer’s intended use of the property, it can lead to serious property disputes.
Easements and covenants often “run with the land.” This means that even though someone else agreed to the conditions, such as a neighbor’s use of the driveway across a residential property, the new owner must honor that commitment. When this isn’t made clear during due diligence or inspection of the property, the disputes are even more contentious. A lawyer with experience reading titles can help you avoid these problems.
#4: No Conditions to Closing
Have you ever wondered why there is a gap between when you sign a contract to purchase property and closing? The weeks or days in between are intended as due diligence for the buyer. During due diligence, the buyer may want to inspect the property, run an environmental report, obtain financing, and check the property’s title. However, all of these attempts to mitigate the risk of a bad investment are ineffective if there aren’t conditions to closing in your contract.
If a buyer uncovers a major problem with the property, he or she will want concessions of the price or the ability to terminate the deal. These options must be in your contract. When a contract lacks these important conditions, there are often disputes between the buyer and seller.
What Can You Do About Property Disputes?
This brings us to the single piece of advice that can do to avoid these property disputes during a purchase – draft a strong purchase contract. You need a Long Island lawyer that has the experience with purchase contracts to know the best provisions and exceptions for your situation and the dedication to make your purchase or sale a priority. Where can you find such a lawyer? Right here at the Law Office of Samilde Perez. Contact our team to learn why you need lawyer to buy or sell property.