For many people, real estate investment is a good way to potentially make a great deal of money, but it comes with many risks. In addition to the possibility that an investment may not pan out, there is also the chance of potential legal problems you should be aware of. Here are five legal issues you should beware if you are investing in real estate:
- Discrimination against tenants/buyers
- The Fair Housing Act (FHA) makes it illegal to discriminate against tenants or prospective buyers on the basis of race, sex (including sexual orientation or gender identity), religion, nationality, skin color, family status, or disability. As a landlord or seller, you have a responsibility to ensure you are compliant with the FHA and avoid discrimination. If you do not do so, you can face potential legal troubles and significant expenses dealing with any investigations or court cases that may arise.
- Misrepresentation of the state of the property
- Another important legal duty is to honestly represent the state of the property to any potential buyers. While it is a good idea to emphasize the good traits of a property to anyone looking to rent or buy, there is a fine line between promoting a property and lying about its issues. If you give the wrong impression about the state of your property to a prospective buyer, you may face legal issues.
- False or misleading advertisements
- You should also be cautious when advertising a property for sale or rent. Just like you cannot misrepresent the state of a property to someone’s face, you also cannot lie about the property in any advertisements. If you are found to have lied about the state of a property to a buyer or renter, you can face substantial legal issues and get dragged into court.
- Non-disclosure of property defects
- Another common issue is failing to disclose property defects to a potential buyer. These may include physical defects like leaky pipes or unpermitted electrical work, legal issues like inconvenient easements or covenants on the land, or environmental issues that may impact the development of the land. Fortunately, many of these problems can be addressed through adequate disclosure.
- Contract infringement
- When you sign a lease agreement or a contract of sale for your real estate property, you may think your problems are just about over. However, these contracts are legally binding, and you can face potential problems if you are accused of violating the terms of any agreement you sign. That is why you should make sure to have a lawyer look over the terms of your contracts, which can minimize your legal and financial risks.
At Liongate Homebuyers, we assist our clients with a variety of services related to buying and selling real estate, including purchasing homes for cash. We have experience handling real estate financing, especially for developers and house flippers. If you are interested in selling your home for cash, please contact us at 516-548-6553, or visit our contact page.
