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What Are Your Options If Your Real Estate Deal Goes Sour?

Once a real estate contract is signed, everyone hopes the deal will end with a buyer getting the keys to their beautiful new home and the seller walking away with a profitable check. Occasionally, however, a deal falls apart after the contract is signed. Maybe the buyer’s financing doesn’t come through, or the appraisal comes in lower than the contract price. Or a cloud on the title pops up (indicating that the seller doesn’t have clear rights to the property) that can’t be quickly repaired. Sometimes, either the buyer or the seller simply gets cold feet and wants out.

Real Estate Options

Since a contract is a legal document binding both parties, dealing with the fallout of these situations can be challenging. This is when a lawyer familiar with real estate laws and real estate contracts in South Florida can be important to ensuring that your rights are preserved and that you get what you are legally due.

If you are the seller, and a buyer won’t (or can’t) close:

  1. Sometimes a lawyer with good negotiating skills can bring a buyer back to the deal with a combination of sticks and carrots. Sticks include the realization that they can lose their deposit or perhaps be sued for damages; carrots might include such financial inducements as having some closing costs paid for, or having the seller leave some of the upgraded fixtures they originally planned on taking.
  2. Many contracts give the buyer legitimate reasons they can back out of a deal in a specified time period, such as receiving a poor inspection report during the allotted time, or, in some cases, not getting financing. If the buyer is exercising these options, there is not a lot the seller can do except return the escrow deposit and move on to another buyer. However, if the buyer walks away for reasons beyond those the contract allows, the seller may be entitled to the money in escrow. The escrow agent usually can’t just write you a check, though. Depending on the contract, the dispute will have to be resolved either by mediation, arbitration, court, or in some instances the Florida Real Estate Commission (FREC).
  3. If the contract provides for it, the seller may be able to sue the buyer for “specific performance”—that is, to force the buyer to purchase the home. Or, contract providing, you might be able to sue for money damages, such as the difference between the contracted price and the value of the property at the time the buyer breaches. Because litigation can be time-consuming and expensive, though, the reality is it is often easier to put the home back on the market and quickly move on to finding another buyer.

If you are the buyer, and the seller won’t (or can’t) close:

  1. Work with your Realtor and your attorney to see if there is a course of action beyond a simple, on-time closing that might solve the problem. This might include getting a contract extension (to give the seller time to clear up title, say), closing the sale in escrow (where the proceeds stay with the closing agent/attorney and are not disbursed to the seller until the issues are satisfied), having the closing agent hold back a portion of the money (enough to cover the resolution of the problem), or amending the contract to satisfy the parties and enable the close.
  2. Allow the contract to collapse and, if the seller agrees, have the deposit returned to you. Although you won’t get the property, you’ll be able to quickly move on to finding another wonderful home.
  3. Sue in state court for “specific performance,” that is, to require the seller to honor the contract. Although you may win in the end, buyers must think long and hard before pursuing this route, as court cases are time-consuming and expensive. In addition to performance, a lawsuit can sometimes also ask for damages, such as moving and storage costs during the delay, rental property costs, higher interest rates you incurred if rates went up, and the like.

The possibility that problems like this may arise is one reason I strongly urge both parties in a real estate deal to retain a lawyer throughout the process. A qualified real estate attorney can try to keep a deal together if it is in danger of being killed. If the deal does collapse, the lawyer can help you decide the appropriate actions for you. For more information about real estate deals in South Florida, contact the Law Office of Gary M. Landau by email or call 954-979-6566. Attorney Gary Landau personally returns all calls to him.

 

Homestead Exemptions for 2017–What You Must Do Now

homestead excemption 2017With the end of the year rolling around, now is the time to set yourself up for a Florida homestead exemption for the next tax year.  Starting next year, this exemption gives permanent residents a deduction of  $50,000 from your home’s assessed value, as well as qualifying you for additional benefits.

If you have lived in your home for more than a year and have previously had a homestead exemption, you don’t need to do anything.

If you’ve moved in the last year, however, or are about to close on a home, you must take steps to ensure you get this deduction for the coming tax year.

First, you must close on your home no later than December 31st. Then, you must take steps to demonstrate that this is your permanent home, such as changing your address on your driver’s license.

Before March 1st, you must officially file for this exemption with the Tax Appraiser’s Office. (Find your local office at http://floridarevenue.com/dor/property/appraisers.html).

Properties granted a homestead exemption also automatically qualify for the “Save Our Homes” benefit, which limits the increase in assessed value in future years to either 3% or the Consumer Price Index change, whichever is lower, in the second consecutive year the exemption is received (unless you add an addition or do other major construction). If you had homestead and Save Our Homes with a previous home, you must buy a new one within two years if you want to transfer your old benefits to the new home.

Homeowners who want to add an adult child or other relative to their deed must be careful to do so in a way that doesn’t jeopardize their homestead. If you don’t do it right and lose your homestead, your assessed value for tax purposes will jump to the fair market value. Having an experienced real estate attorney make this change will ensure this doesn’t happen.

For a FREE consultation to discuss these and other real estate issues, contact the Law Office of Gary M. Landau by email or call 954-979-6566. Attorney Gary Landau personally returns all calls to him.

Why a Lawyer Should Review Your Real Estate Contract

Real Estate ContractIn Florida it is often customary for a Realtor to make an offer without having a lawyer review the contract. I urge buyers and sellers to write “subject to my attorney’s review within 3 business days” into such a contract, and then get it to a lawyer pronto. Too often, clients come to me with a contract that can’t be renegotiated, yet it contains provisions they don’t like or understand. Many attorneys, myself included, will waive their fee for reviewing a contract when they are hired as the closing agent on the deal.

Here’s what I look for when reviewing this important agreement:

  • Does it become a cash deal if the buyer can’t get financing? In many deals, buyers have a limited window to get out of a deal. If their financing falls through after that timetable, they are obligated to buy the property for cash (or lose their deposit). If a buyer can’t get the seller to agree to a more generous financing contingency, he should at least try to extend the time period for when he can walk.
  • What happens if a special assessment is issued before the closing? Who pays it—the buyer, the seller or some sort of split? Contracts differ on this point and can be negotiated in your favor. Paying attention to this clause can minimize the prospect for a fight should the association slap on a special assessment, which can delay the closing and, in some cases, scuttle the deal and lead to lawsuits.
  • How long is the inspection period? This is the time buyers have to get the home inspected and to void the deal if they are unhappy with the results. I have seen these range in contracts from 5 business days to 15 days or more. Since it can be tough to get a certified inspector to a property on short notice, buyers should not agree to timetables that are too tight.

For a free consultation on how the Law Offices of Gary Landau can assist you with your real estate transaction, contact us by email or call 954-979-6566. Attorney Gary Landau personally returns all calls to him.

 

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The Various Ways You Can Take Title In A Real Estate Transaction

Wondering how you might take title when you buy your new home? If you’re single or divorced, you’d obviously have sole ownership. But if you’re married or in a relationship, or have a living trust, there are several options. The exact language varies by state although the concepts are similar. In Florida, here are the most common ways your deed might read:

Taking Title In A Real Estate Transaction

Tenants in common. This is the legal entity the courts assume if the deed is otherwise silent. This means if there are two people taking ownership and one dies, that person’s half goes to his probate heirs, not directly to the other owner. If there are three owners, each actually owns a third, four owners a quarter, and the like.

Joint tenants with rights of survivorship. In the case of a death, this deed give the surviving owner the entire property. So if there’s a non-married couple with kids from prior relationships and one passes away, his or her share automatically goes to the remaining partner. As the new sole owner, that person can later choose to leave the home to anyone they wish– excluding their late partner’s children if they desire. (This is the reason couples on second marriages often choose tenants in common for their deeds together.)

Tenancy by the entireties. This can only be used for people who are legally married. Similar to joint tenants with rights of survivorship, each party owns 100%, so if one passes away the property automatically goes to the other. Unlike with JTWROS, however, if a judgment is entered in court against only one of the owners, it cannot become a lien on the property.

Trust. A trust can also take title to a property. This is typically recorded on the deed as “Jane Smith, Trustee of the Jane Smith Trust dated August 1, 2016.” This can be useful for an older person whose home is their main asset, because they can avoid probate; the successor trustee steps in as the owner upon the person’s death. This has to be done carefully, though, because I have seen people have problems selling their home in a trust because no trust was in legal effect when the property was purchased–or worse, the trust (a document drafted by a lawyer and not filed with the court) cannot be found.

If you’re looking to buy or sell a home, Contact us by email or call the Law Office of Gary Landau at 954-979-6566 for a FREE consultation. Gary Landau personally returns all calls to him.

What an Attorney Does That a Title Company Doesn’t

attorney vs title companyYou’re about to purchase a new home or sell your old one, and you wonder whether you need an attorney or can “get away” using only a title company (as your Realtor may tell you). For little to no extra cost and much peace of mind, using an attorney to handle your closing usually makes a lot more sense.

For most people, the home is the most expensive asset you own. If you were buying or selling a business for the same price, you wouldn’t think twice about hiring an attorney. In real estate transactions, it makes even more sense to bring in a lawyer because in many cases the title company’s fee may not be any lower.

What you get when you hire an attorney over a title company is someone who not only handles the paperwork for your closing, but who also looks out for your legal interests. A title problem pops up during the process? An attorney can quickly clear it up. Get into a dispute about what furniture the seller is supposed to leave behind? An attorney can interpret the contract to see what you’re entitled to, then help you enforce your rights. See charges on your closing disclosure form you wonder about? An attorney carefully evaluates all charges to make sure you are legally bound to pay them—important because people often try to slip in extra fees hoping you won’t notice.

If you are buying a house in Broward County or selling one in Palm Beach County (the customs differ), you are generally the one who chooses the title insurance provider/closing agent. If you select an attorney, you get legal representation for a price similar to a title company’s, which doesn’t come with that representation. Attorneys also tend to be more thorough; I have been involved in many deals where the title company doesn’t do a complete city lien search, for example, claiming that is outside the scope of their job. This means if the home has outstanding permits, you may not know it until after you close.

What’s more, I have saved clients hundreds or thousands of dollars because I contested charges they did not legally have to pay. So even if the other side chose the closing agent and they hired me additionally, the savings often more than paid my fee.

In the state of Florida, the convention is to present an offer in the form of a signed contract. Here again, involving an attorney makes smart business sense. For a client that plans to hire a lawyer as their closing agent, many attorneys will review the initial contract for no extra fee. To keep that contract from being binding before the lawyer sees it, be sure to write “subject to attorney’s review within three business days” into the contract you are presenting as your offer. Then get it to an attorney right away, so he or she can be sure you are well protected.

Contact the Law Office of Gary M. Landau for a free estimate the next time you find yourself buying or selling your home.

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