4 Common Real Estate Legal Issues You Need to Know About

May 01, 2018

Anyone who purchases real estate or currently owns a home or any type of land needs to be aware of some common potential problems. There are four potential problem legal areas that can arise with any real estate, whether a house, apartment, farm, or undeveloped parcel of land. Some of the following can and should be dealt with prior to purchase, but all can appear at any time after purchase as well. An owner or prospective owner needs to be aware of all four and should seek legal counsel to make sure their legal rights are protected. Sometimes one or more of these problems can arise without warning. An owner of real estate just needs to be familiar with the following four concerns. They should ask legal counsel the right questions and then rely upon legal representation to protect their legal rights. There is no substitute for good legal counsel when dealing these issues.

1. Boundary Disputes

A boundary dispute can be something as small as an argument over two feet or the ownership of bushes between two adjoining homeowners. It can also involve an acre or more when two owners of farms are involved. The way to address this issue is to have a current survey done prior to purchase of the property. If that is not done, then a new current survey will be necessary. Many boundary disputes arise due to an old survey that is proven to be less than accurate when a current survey using modern equipment is performed. A good survey will show all boundary lines and document any problems, such as the neighbor's driveway being one foot across the property line. In that case, there needs to be a resolution before closing so neighbors do not end up with an ongoing dispute.

2. Easements

An easement is a legal right to come on a parcel of real estate for a specific purpose. The most common example is the right of the power company to construct power lines. The easement of the power company is spelled out in a legal document that is filed with the appropriate government agency, such as a register of deeds. The easement goes with the property. The owner of the land in 1950 signs an easement for a power line, and all owners in the future are bound by that document. A good real estate attorney will find all easements of record when performing a title search, and then inform the owner or potential purchaser of these easements. Sometimes there are easements on record that are yet to be used but can be used at any time in the future.

3. Liens

The most common lien on real estate is a mortgage. Mortgages are generally paid in full either by the owner or when the owner sells the property. The problem arises when the lien is not cancelled on the public record. A real estate lawyer who finds such a lien will contact the owner of the lien, and assuming it is paid in full, get it cancelled. Other examples include tax liens, both for real estate taxes and income taxes. Again, they need to be marked cancelled on the public record. Of course, if they have not been paid, then they remain a lien and must be dealt with before a real estate purchase can be closed.

4. Prior Ownership Claims

The best example of this problem is an unknown heir. Suppose an owner of property dies without a will. The person had four children. Three of the children live in the same area, and decide to sell the property. The fourth child moved away thirty years ago, and has not been heard or seen since then. The three children decide to not mention the missing sibling, and sign a deed transferring the property to a new owner. Ten years later, the missing heir shows up and demands his or her one-fourth of the property. Unless you know the missing heir exists, it is hard to guard against this legal issue. The best protection is title insurance. Pay a premium and let the insurance company take the risk. When the missing heir shows up, the insurance company would negotiate any settlement and pay the claim.

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