In Texas, it is not legally required to hire a real estate attorney in order to buy or sell property. Most other states will require the participation of an attorney. However, in Texas, we have legislation promulgated title policies, meaning that there’s not much negotiation that can happen during this process. Because of that fact, most people do not need to use attorneys in residential transactions.
However, it is always recommended to have an attorney look over any purchase or sale contract and explain it to you to ensure that you fully understand the legal realities of the contract.
What Are Some Of The Most Important Factors To Consider And Potential Issues To Look Out For When Buying Or Selling A Real Property In Texas?
I would say when selling property, the number one thing I advise sellers to do is to disclose everything about the property. Even a little crack in the wall that you think is not a big deal could eventually be construed as you hiding foundation damage. Make sure you disclose every improvement you have made and any insurance claims you’ve made. Disclose anything wrong with the property. It’s much better to have to negotiate this or even lose a sale initially than it is to be sued for a failure to disclose something afterwards. Specifically, make sure you disclose everything you need to disclose in writing, and make sure that the buyer understands everything in the disclosure and has a full view of the property and all its problems before the transaction closes.
What Are Some Common Issues That Can Hold Up The Sale Or Purchase Of Real Estate?
The first issue that can hold up the sale or purchase of real estate would be encumbrances on the title. That can be any liens, tax holds, HOA issues or even probate issues on the title. These are things that an attorney can assist you with when you receive your title commitment.
Also, always make sure that you close with a title company. Most of the problems that I see arise from people doing cash transactions without a title policy. A title company will ensure that there are no encumbrances on the title when you purchase a property, and they will advise you of issues such as encroachments onto the property, issues where the property may encroach on another, HOA problems, and anything else that can affect the title.
Should I Use A Standard Listing Agreement Contract Provided By Realtors To Buy Or Sell Property, Or Is It Better To Have My Attorney Customize An Agreement?
If you’re using a realtor and you want them to write the contract, they will be required to use the Texas Real Estate Commission (TREC) promulgated forms. These forms are fairly balanced between the buyer and the seller. A custom agreement is going to be more common for commercial properties, or in unique situations that need to be addressed.
No matter what, I would always have an attorney review the document. In many cases, they can advise you if you need an amendment or some other custom content. They can then add the custom content, whereas your realtor cannot.
Be careful of realtors who think they can write legal documents. Realtors provide a great service, and make deals happen by providing all the marketing that we attorneys cannot. However, they are limited in what they can do in specific areas, and one of those is in adding additional content to contracts. If you have any reason to believe you might need an original amendment or clause written in your contract—for instance, if you’re selling the property of a deceased person and you need to deal with probate issues, or if there are tax issues, or if the home is damaged—then I would definitely seek an attorney’s input.
What Happens At The Closing For A Property Sale, And What Will My Real Estate Attorney Do To Make This Process Go Smoothly?
Basically, a closing is where the actual transaction happens. The process usually goes something like this:
- The funds are placed in escrow by the buyer.
- The seller signs the deeds and the loan (since if there is a loan involved, then the loan needs to be signed to be funded).
In order to facilitate a smooth closing, we always recommend closing with the title company. This will ensure that the property received has no encumbrances on it, or at least none that you are not aware of.
We will also go over all the documents with you in advance, to ensure that you understand everything and that nothing catches you by a surprise at the closing table. I review the closing packet with my clients in advance to ensure that they fully understand all the documents they will be be asked to sign.
What Are Some Of The Biggest Issues That You Encounter From Both Sides Of The Table?
The biggest issues that many HOAs present is a failure to pay. Often, people do not understand that paying HOA for assessments is not optional, and is in fact required.
This misunderstanding can cause very severe problems, because failing to pay HOA assessments are one of a very small number of things that can force a foreclosure on your home. Homeowner Association/ Property Owner Association assessment payment failures are joined by taxes and purchased money mortgages as the things that can force home foreclosure.
Of course, this is not a commonly known fact, so many people prioritize other bills before they pay for HOA fees and assessments. I have had people who have had their HOA bills go to collections tell me that they didn’t think they owed anymore, because they thought they could just drop out of their HOA. They, like many other people, did not understand that when you purchase a home in a subdivision, you are subject to the rules of the HOA there, including the fines and the assessments.
I often have people get furious, saying, “They can’t tell me what to do with my house. It’s my house!”, but the fact is an HOA can tell you what to do with your house, and you signed up for it when you purchased your subdivision property.
I would therefore advise that whether you use a realtor or an attorney or both, make sure you read all of those restrictions on a potential property, and make sure that you’re comfortable with them ahead of time. Once you purchase the property, any HOA fees you agreed to in the restrictions will be legally binding.
It should be noted that when it comes to HOAs, sometimes they’re run by good people, and sometimes they’re run by bad people—just like everywhere else. Remember, these are volunteer positions. When you’re having an issue with an HOA, it can sometimes be because of a bad apple on an HOA Board who uses their power unfairly. Other times, though, it can be because you have HOA board members who simply do not understand what is in their purview, what they can and cannot do. These may be people who care deeply about their community and just do not understand that they have crossed the line from their actual abilities as an HOA into territory that others find intrusive.
As attorneys, we step in when we feel that our client is not being fairly treated by the HOA. We might step in when the rules are not being enforced in an equitable manner, or where they keep writing restrictions over and over again just to target one resident that one person on the board is unhappy with. None of these things are acceptable HOA behavior, and all of them can be fought legally.
Unfortunately, we’ve had to file numerous restraining orders against HOAs to prevent them from mistreating residents that we have represented. We’ve also had to do numerous collections and foreclosure actions against people who did not understand that HOA bills were mandatory, or who simply did not want to pay them.
Recently, changes in the law have made it so that HOAs have to take a few more steps before they can foreclose on a property. However, HOAs are still a very strong power in Texas, and people should absolutely understand what they’re in for before they purchase in a specific community.
We should also mention that HOAs sometimes do not do their jobs enough. We’ve had those disputes where one resident has an issue with their neighbor—say, that they’re partying at all hours of the night and violating noise restrictions, or parking in the street, or littering their yard with trash—and the HOA won’t intervene.
Neighbors can file suits to enforce HOA restrictions even where the HOA won’t. Sometimes, people on the HOA Board don’t want to meddle in their neighbor’s disputes. That’s where having an attorney can be helpful. We can help you come to an arrangement outside litigation to settle things.
Picture This Scenario. Neighbor A Is Concerned About Neighbor B’s Pool. Neighbor B Doesn’t Maintain The Pool. It’s Infested With Mosquitoes On An Ongoing Basis. Neighbor A Has Gone To The HOA, And The HOA Said, “It’s In His Backyard. There’s Nothing We Can Do.” What Happens Next?
What happens next in a situation like this depends on the restrictions of that particular neighborhood. Many HOAs are hands-off when it comes to backyards. In that case, I would see if an attorney could help. Depending on the case, Neighbor A might have a nuisance claim. Specifically, when people like Neighbor B don’t mow their lawns and pool areas, they become overgrown to the point that rats or snakes will move in. This may happen in Neighbor B’s yard, and those rats and snakes may then be intrusive on Neighbor A’s yard. Additionally, weed seeds blow in from Neighbor B’s unkept yard and propagate weeds in neighboring yards, preventing Person A from being able to keep their yard nice.
In that case, Neighbor A might have a nuisance claim. Everyone has a right to quiet enjoyment of their property, and if Neighbor B’s failure to maintain their property impacts Neighbor A’s right to quiet enjoyment, then Neighbor A can absolutely can take action on that.
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