Real Estate Law - Important! - Posted by William Bronchick

Posted by William Bronchick on June 09, 2000 at 10:28:09:

Someone posted a question on my site that I haven’t seen here and I think is very important for investors, so I will repost it her:

The question was: “What laws should I be familiar with in my state as a real estate investor?”

You are smart to be thinking of the laws. As an investor, you should be aware of the following:

  1. Landlord-Tenant rules: exactly what does it take to evict someone? How much does it cost? How long does it take? Can I serve notices myself, or do I need a process server? Are there special housing rules that apply in my city? Is there a limit to the amount of rent increases I can ask for? Is there a limit to security deposits? Do I have to give interest on a security deposit to my tenant? How long can I hold a security deposit after the tenant leaves? Is there a minimum grace period before I can charge a late fee?

Here’s a good list of state real property statutes: http://www.law.cornell.edu/topics/state_statutes.html#property

  1. Documents: what form of contract, deed, mortgage, note, lease, etc are commonly used in my area?

  2. Recording rules: where do legal documents get recorded? What are the filing fees? What format must the documents follow? Is there a transfer tax?

  3. Disclosure laws: what must be disclosed to a buyer or tenant about the property? Lead? Asbestos? Rapists in the neighborhood?

  4. What is the limit for charging interest until it becomes usury? (in most states the limit is 21%)

  5. Fair Housing: can I discriminate against certain groups? (In NYC you can’t discriminate against lawyers!)

Get yourself a local real estate law book from the bookstore or a law library. Check your state statutes under “Real Property Law” or “Real Estate.” Also, be familiar with peculiar Consumer Protection Laws that may limit other practices, such as high-pressure sales.

Also be familiar with Real Estate Licensing Laws - your practices may be treading close as an investor. Here’s a compendium of links to state real estate licensing agencies for more info: http://www.dora.state.co.us/Real-Estate/states1.htm