If you are renovating your home with the view to selling it on, it can be easy to get caught up in the financial side of things, particularly the profit you will make, but with so many legal hoops to jump through, we often underestimate how difficult this part can be. If you are selling up and want a smooth and steady selling process, there are several legal pitfalls that we can often overlook, including the following:
Contract Breaches
Misunderstanding or failing to fulfill the terms of the purchase agreement can result in legal complications. Therefore, it’s essential to carefully review and adhere to all contractual obligations. Legal specialists like Taylor Law Group who work in real estate can always help people navigate this, which is why carefully reviewing and understanding all terms of the purchase agreement prior to signing makes a huge difference.
Common breaches of contracts include failing to close on time, violating specific clauses in the purchase agreement, and, particularly for sellers, not maintaining the property’s condition between the contract and closing. Consequences can be dire, from financial penalties to lawsuits, so be sure that you understand the contract!
Inadequate Disclosure
Most US states require sellers to disclose issues or known defects with the property, such as pest infestations, history of flooding, structural problems, and even neighborhood nuisances. Therefore, if you’ve got a troublesome neighbor or you want to sell your home because you’re sick of the high rates of crime, you have to be truthful upfront.
If you don’t disclose any of these issues, you could be on the receiving end of a lawsuit for fraud or misrepresentation, which could lead to financial damages or the sale may not even go ahead. Therefore, when you are completing all disclosure forms, being thorough and ultimately truthful is the best course of action.
Issues With Titles
Common title problems include boundary disputes, undisclosed liens, or even errors in public records. Therefore, if you have been living in this property for a while or were always planning to flip it before selling it on, you should conduct a title search to uncover any issues before you list the property.
You should consider purchasing title insurance to protect against any unforeseen title defects because if you can resolve these issues early, this will prevent any last-minute delays in closing or even cancellations.
Overlooking the Environmental Concerns
Federal law requires disclosure of any lead-based paint in homes built prior to 1978. Therefore, if you are renovating a property older than 40 years, you should think about conducting environmental testing for asbestos, radon, contaminated soil, or lead-based paint to identify and address any of these issues proactively.
By thoroughly addressing each of these areas, you can significantly reduce your legal risk and, therefore, increase the likelihood of a smooth and successful transaction. It’s not always straightforward, but if you can get started on these issues and be aware that selling up is not always as simple as it sounds, you are forewarned and forearmed.