Legal Liability In Real Estate Essay

When it comes to selling and buying a home, real estate legal liability has several components that involve representing the property, protecting the interest of all parties, and neglecting parts of the sales process. Sellers are more likely to be confronted with legal liabilities pertain to the home’s condition s found during the home inspection and after the sale, once the buyers take occupancy.
Legal liabilities for sellers after the home is sold and transfer of ownership is complete may exist depending on terms and conditions all parties signed as part of the purchase agreement. The language can be confusing and vague, especially when it comes to the extent of the repairs sellers are responsible for completing. Buyers may have legal liabilities according
to the agreed conditions pertaining to the acceptable of ownership for the property purchased after the sale.
The purchase agreement is the controlling document for selling and purchasing a home containing details for legal liabilities should one of the parties fail to meet the agreed terms. Within the agreement contract buyers and sellers list contingencies as part of the terms and conditions for completing the transaction. The conditions have to do with repairs to the home prior to closing, waiving home inspections, required disclosures and financially agreements such as lease back option.
If the repairs are minor, many buyers prefer to take a credit during closing and manage the repair work or replacement themselves. Sellers can also offer to pay for a home warranty as part of the sales transactions, covering issues on the home’s working appliances or systems. Either method works to protect sellers’ legal liabilities preventing the buyers from making repair demands after the home closes.
Repair Conditions
Most real estate purchase agreement includes repair contingencies and goes into effect when both parties sign the document. Generally, the seller accepts legal liabilities for completing the repairs listed in the purchase contract. There are times when a buy will waive the home repair inspection after the repair has been completed, accepting and home’s condition. This action of acceptance releases the seller from legal liability for the repairs. In the event the home seller failures to complete the repair as stated in the agreement, future legal liabilities could resurface fully enforceable for the seller.
Disclosures
In the state of California, disclosures by sellers are required to provide information about the home’s general condition, and should include any known defects along with the repairs or actions taken. Sellers are also required to share information about conditions they should have known such as lead paint being used by the previous home owner. Both situations help to prevent future legal liabilities against the seller.
Negotiations
As the seller you need to meet with your realtor to review the home inspection report’s finding before you agree to repair negotiations. If the home inspection found problems and you avoid repair, you may have legal liabilities after the sale of the home. It’s good idea to get several bids for comparisons pertaining to cost and length of time to complete the repairs.
If the repairs are minor your realtor may suggestion negotiating the cost of repairs by adjusting the sales price. If you choose this option, be sure to get a signed agreement from the buyer, they are accepting the home as is at closing, as a result of the price adjustment covering the cost of repair.
After Closing
Once the buyer moves into the home, they may find conditions after closing. It’s not unusual for the buyer to contact the seller to request the repair get done. Legal liabilities are identified in the purchase agreement and most define the differences between cosmetic, structural, building and safety codes. This is another reason for having a pre-inspection prior to selling the home; the home inspector can clarify the seller’s obligations according to the state regulations versus decorative enhancements.
If the home inspector missed a defect that’s discovered after the sale, the buyer may be limited or have no legal course of action, especially if the damage is not due to the seller’s misuse or negligence.
If the defects were identified and the buyers signed off or waived the conditions, usually sellers are protected from the as is clause.
Risks
Legal Liability is based on the fact that each party holds some responsibly to the other when agreeing to enter a contract. If one party fails to meet the agreement, it may be considered a breach of the agreement. As a seller, you may not be protected from legal liability if misrepresentations intentional or unintentional were made during the transaction. The best policy is to work with your realtor; they are experienced and offer the nest solutions for your home sale to go through a few hiccups as possible.
Keep in mind this is a business transaction and limiting the amount of legal liability is in the best interest of the seller. The best solution to avoiding legal liability is good communications with your realtor, and your buyer. Be sure everyone understands the documents begin signed and the responsibilities designated to each party in the
transactions.