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:
- 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
Documents: what form of contract, deed, mortgage, note, lease, etc are commonly used in my area?
Recording rules: where do legal documents get recorded? What are the filing fees? What format must the documents follow? Is there a transfer tax?
Disclosure laws: what must be disclosed to a buyer or tenant about the property? Lead? Asbestos? Rapists in the neighborhood?
What is the limit for charging interest until it becomes usury? (in most states the limit is 21%)
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