Real Estate Closing Horror Stories

In the spirit of the Halloween season, we thought it would be fun to turn our attention to real-estate closing horror stories—for the amusement of Realtors, as well as home buyers and sellers. (They’re interesting stories, as long as they didn’t happen to you!)

Thankfully, most real estate closings occur without a glitch. Occasionally, small problems arise, but we easily work them out. Once in a blue moon, however, the deal blows up in a virtual apocalypse.

Here are some horror stories our firm has witnessed:

  • Furniture held hostage. I always advise sellers not to let buyers move anything into the home or do any work before the closing. I advised the same thing to this couple, who were the buyers, who wanted a place to store their furniture. They didn’t listen, and the seller let them take over his garage. The week before the closing, however, the buyers’ financing fell through, and they reneged on the deal. The seller was entitled to keep the deposit, but he decided to hold the furniture for ransom, too. It took months of wrangling before he let the buyers retrieve all their things.
  • No deposit was tendered. In this deal, the buyers were a lovely young couple, but they didn’t have much money. Their aunt had generously offered to pay the $5000 deposit called for in the contract. The title company never noticed that the aunt never sent the money to them. It was only at the closing table that everyone discovered the aunt had reneged. Because the couple couldn’t make up the balance, they could not close on the house, which enraged the seller. He did not have the deposit money to keep as a consequence of the breach of contract. I was brought in after all of this occurred. Ultimately, it was resolved after several drawn-out lawsuits.
  •  Dispute over medical bills. The buyer and seller agreed that the seller could stay in the property after the closing and pay rent to the new owners for several months. A little while after the closing, the seller-turned-tenant fell off a ladder while making repairs. The man had no insurance and insisted via a lawsuit that the new owners were responsible. They countersued that it was he who was liable. During the dispute, the injured man refused to move out of the house, even after the lease expired, so the new owners could not move in.
  • Walk-through surprise. This is probably the most common horror stories, as we have seen it happen more than once. The seller promised to do the substantial repairs identified in the inspection. Several times before the closing date, he told his Realtor the work had been done. But when the buyers and their real-estate agent walked through the property on the morning of the closing, not a single fix had been made. Fortunately, this situation typically doesn’t blow up the deal; instead, I, as the closing agent, escrowed enough money from the seller to cover all repairs.

Having the Law Offices of Gary M. Landau by your side during each step in a real estate deal helps insure that the process goes as smoothly as possible. For more information about your real estate contract in South Florida, call 954-979-6566 or email for a free consultation.

 

5 Reasons You Should Not Have a DIY Will

You can download just about anything online these days: movies, games, and even a do-it-yourself will.

But, just because you can do something doesn’t mean you should do it, and a DIY Will definitely falls in that latter category. Even if you think your estate is simple, there are often things you don’t consider.

As a longtime probate lawyer in South Florida, I’ve seen too many cases of people who thought they would save money by drafting their own will, only to leave behind complications, delays, and in many cases, extra expenses for their heirs. For a document so important to your family and friends, a will is one area where you should definitely hire a professional.

Here are 5 reasons a DIY will is a bad idea:

  1. Florida law constrains who can be your personal representative. A PR is the person you name to find all your assets and work with the courts to properly pass them to the rightful heirs. You may want to choose someone who cannot serve according to Florida law. Similarly, most people making a DIY will don’t think about what happens if the PR they name predeceases them or doesn’t want to serve. A professional takes all of that into account when drafting your will with you.
  2. Typos in DIY wills are more common than you think. According to an article in Forbes magazine advocating against drafting your own will, one person left “200.000” to his sister, inserting a period where there should have been a comma, which set off a battle among the family. Another neglected to change the “insert name here” space-filler in his downloaded will to an actual name, so no one knew who he meant to leave that money to. I have also seen wills that leave assets to someone listed only by first name rather than their full name, and a will where the sentence stipulating what was to happen to his prized possession was cut off the page.
  3. Some assets don’t get passed to heirs via a will. You may think you’re evening the score by leaving your bank account to your son and your property to your daughter, but if your bank account is a joint account in the name of you and your brother, that money automatically goes to your sibling, bypassing the probate altogether. Ditto for life insurance, many pensions, and CDs. To have these properly left to the people you want them to, you need to name them as beneficiaries in the documents themselves.
  4. You miss out on important legal counsel. I spend a lot of time walking clients through their various options. This is especially important for people on second (or third) marriages, parents estranged from children, or those with grown kids of varying income potential. What’s more, people often forget to name a guardian for their child (perhaps the most important element of a will if you have underage kids), leave assets to their pets (they cannot inherit under the law), or place illegal conditions on an heir’s inheritance.
  5. A will’s execution must be perfect. Courts will toss out a Florida will if it doesn’t exactly adhere to state law, such as having two witnesses who sign in each other’s presence. An improperly executed DIY will is the biggest heartbreak I see. Rather than having the estate divided according to the person’s wishes, the court invalidates the will and divvies up the assets based on the law for someone dying without a will, which is often markedly different.

Don’t let this happen to you or a loved one. These days, most attorneys charge a reasonable fee for a will, which should also be drafted with other important documents such as a living will and a healthcare proxy.

If you would like to speak with an experienced probate attorney in South Florida, contact the Law Office of Gary Landau for a FREE legal consultation at 954-979-6566 or by email. Attorney Gary Landau personally returns all calls and emails to him.

Common Probate Problems

Common Probate Problems

In the ideal world, when a loved one passes away, you’d deposit his or her valid will with the court and sail through probate—which would end with all assets quickly distributed according to the person’s wishes.

But problems sometimes creep into the process, adding unexpected issues and delays.

Here are some common monkey wrenches that can turn up during the probate process:

  • Someone challenges the will. Whether they’re cut out entirely or simply feel they’re not getting a fair deal, anyone can sue in court to invalidate the will, alleging that the person wasn’t competent when he or she signed it, or even that a newer will exists and must be found. (Fortunately, getting a judge to go along with this is a longshot.) Although this doesn’t happen, when it does, it can add a great deal of time and money to the process. Sometimes, it pays to negotiate with the person challenging the will to try to avoid a drawn-out court battle.
  • The person named as personal representative either doesn’t want to or is ineligible to serve.  Shepherding an estate through the probate process is time-consuming. Occasionally, the person named as PR decides they don’t want to do it (even though they are compensated from the proceeds of the estate). Even more frequently, especially in South Florida where people have good friends in the state where they used to live, the person named in the will as PR doesn’t fit within Florida guidelines, which says a PR can live outside of Florida only if he or she is a relative. (Read more about the responsibilities of a PR here.) In these cases, the attorney has to go to court to get someone else appointed.
  • The PR has trouble finding all the assets. Whether it’s a safety deposit box no one can locate or questions about whether all bank and stock accounts have been identified, questions can arise about whether the PR has found all of the assets. This is even more likely now that people get statements from banks and brokers emailed to them; previously, the PR could watch the mail to see what comes to the decedent.
  • Not everyone wants to sell the home. The parents leave their home to their three children equally; but only two of them want to sell. This scenario has played out in my practice more times than I can count. While the PR can sign a listing agreement and, with the judge’s okay, sell the home, this is often a tricky emotional situation. (Homestead property in Florida falls outside the probate.) In one recent case, one of the grown children was living in the home and threatened not to move out even if it were sold. These situations require careful negotiations between all parties.
  • The PR doesn’t do his or her job properly. The court calls the PR a “fiduciary,” which means the law requires him or her to carefully manage the financial assets. If other beneficiaries don’t believe the person is doing so, they may challenge the PR and make a damage claim against him or her. It is incumbent on the PR to take this responsibility seriously, and to keep other beneficiaries informed as the process goes on.

If you would like to speak with an experienced probate attorney in South Florida, contact the Law Office of Gary Landau for a FREE legal consultation at 954-979-6566 or by email. Attorney Gary Landau personally returns all calls and emails to him.

What Happens If You Were Planning to Close on a New Home When Hurricane Irma Struck?

Hurricane Irma is gone, but the effects of her wrath are still being felt all over South Florida. One group impacted are people who have an active contract to buy or sell their home.

Even if your closing date was initially a few days before Irma hit, you no doubt found that it was impossible to get homeowner’s insurance. So if you were taking a mortgage, you couldn’t close. That’s because insurance companies freeze new policies once a storm takes aim.

Now that the storm has passed, you’ll need to take certain steps to move forward with the deal.

1) Get a written extension of the contract closing date, if necessary. The standard real estate contract provides for a short delay for after things return to normal, a clause known as “force majeure.” If the delay will last for more than 30 days, either the buyer or seller can cancel the contract without incurring any financial penalties. If you’re still interested in preserving the deal but think the delay in your closing date may be significant, you’ll want your Realtor or attorney to get all sides to agree in writing to extend the date.

2) Have a new, professional inspection. You’ll need to wait for power and water to come back on before you can have the home re-inspected. It’s something that every buyer should absolutely do. Even if the original inspection took place the week before the storm, you’ll want to have it repeated, because the home is obviously at risk for being in a different condition now. (If you’re taking a mortgage, your lender will require that one is done.)

3) Determine who pays for repairs. In many contracts, the seller must return the house to the condition it in when the buyer signed the contract. But sometimes, it’s the buyer who has to pay. You’ll want your lawyer to check out the “risk of loss” section of your contract and let you know who is responsible.

4) Renegotiate if necessary. If the home has been changed by the storm, you may need to renegotiate the price of the sale. However, the house must be in habitable condition before any lender will agree to a mortgage.

5) Stay in touch with your lender. According to local media, many lenders seem to be honoring their interest-rate guarantees that technically expired when your closing date got moved. Still, you’ll want to contact your mortgage broker or lender to see specifically how the storm affected the terms of your loan.

If you would like to speak with an experienced real estate attorney, contact the Law Office of Gary Landau for a FREE legal consultation at 954-979-6566 or by email. Attorney Gary Landau personally returns all calls and emails to him.

What is a Pour-Over Will?

What is a Pour-Over Will?Wikipedia gives this definition of a pour-over will: “A pour-over will is a testamentary device wherein the writer of a will creates a trust, and decrees in the will that the property in his or her estate at the time of his or her death shall be distributed to the Trustee of the trust.”

Huh?

Put simply, a pour-over will is a type of will you need to create if you have a living trust. With a living trust, your assets are held by a trust, rather than by you, although as the named trustee you have complete control. Living trusts were all the rage some years back, and they’re still useful in some cases.

People often think that if they have a living trust they don’t need a will. But that is a big mistake you don’t want to make.

The problem with a living trust is that every single asset in your name has to be transferred into the trust when you create it. And every asset you acquire after you create the trust needs to be held in the trust’s name. But in the real world, things are often missed.

People forget to transfer every asset, so when they pass away, these assets don’t simply pass to the successor trustee the way they’re supposed to.  That’s where the pour-over will comes in.

The will provides direction to “pour over” (hence the name) into your trust any probatable asset that is in your name, outside of the trust, at the time of death. This is important because, without this will, those assets will pass to your heirs according to state law—so your long-estranged husband or child might get an asset you’d prefer goes to someone else.

Unfortunately, because it’s a will, if you do have these assets in your name, your estate will have to be probated—one of the main things people who create a living trust think they’re avoiding.

So it’s not only important to create a pour-over will, it’s important to sit down with your documents once each year and be sure you haven’t acquired any property or other assets that are not in the trust. If there are, move them now.

If you would like more information about estate planning in South Florida, contact the Law Office of Gary Landau for a FREE legal consultation at 954-979-6566 or by email. Attorney Gary Landau personally returns all calls and emails to him.