Common Legal Issues That Arise During the Sale of Real Estate in Maryland
When the sale of a property goes off without a hitch, it is a relief for everyone involved. Whether you are buying or selling, a lot can go wrong in any transaction. This is particularly true with private real estate sales, such as transactions that take place between family members, friends, acquaintances, or any other individuals who have a pre-existing relationship.
Issues that may arise during the sale of real estate property may include those that fall into the realm of human error, clerical mistakes, technology issues, or intentional fraud. Knowing some of the potential issues that may come up during a sale can help you plan ahead, hire the right legal team to handle your transactions, and cover your bases.
Errors in Public Records
Discrepancies in public records can trigger all kinds of property disputes. If two people both believe they are the owner of a strip of land between two homes, a thorough survey referencing public records is supposed to give the final answer. When public records are inaccurate or incomplete, however, finding the truth often takes more time and money.
Previously Unknown Liens
Undisclosed liens can significantly delay or complicate the sale of real estate property. A property may have liens because of unpaid taxes, unpaid contractor bills, or judgments against the owners. The liens then prevent the owner from selling the property until they have paid off the debts. This can leave a buyer in the lurch if the seller does not have the money to pay off the debts and release the liens. This issue highlights the importance of running a title search to identify any liens early in the selling process so that sellers can get the liens released or the buyers can move on before investing too much time or money.
Easements
Few issues lead to as many property disputes as easements. Easements allow specific parties access to a limited part of the property for specific reasons. For example, a waterfront home may have an easement that allows the public to access the public beach. Property owners may grant easements to make it easier for neighbors to access their backyard. Environmental easements help with conservation efforts.
No matter why an easement exists, if it is undisclosed during a sale, it can lead to issues that grind the process to a halt. If an easement is disclosed, the buyer should take some time to review the terms and conditions of the easement, so they know exactly what their obligations are.
Property Disputes
Disputes with neighbors can turn any dream home into a prison. These disputes can also delay or complicate the selling process—neighbors may interfere during showings, attempt to lay claim to parts of the property, or otherwise disrupt the process. Should this happen, the prospective buyer must take swift legal action to set firm boundaries and ensure quiet enjoyment of their own property. In extreme cases, the actions of a neighbor can actually cause the loss of a sale. When this happens, the seller may be able to take legal action against them.
Non-Disclosure of Defects
Maryland property sellers are legally required to disclose known defects to potential buyers. When they fail to disclose defects or take steps to hide them, they put themselves at risk of lawsuits and other consequences. This is one reason that property inspections are an important part of any purchase. Should defects be found during an inspection, the buyer may be able to walk away or request repairs as part of their purchase. If they do walk away, those defects must then be disclosed to the next buyer. If a seller successfully hides defects from a buyer, the truth will eventually come to light—and when it does, it will likely be an expensive lesson for them.
Contract Disputes
Anyone who has ever purchased real estate knows the sheer amount of paperwork that goes into the transaction. You sign document after document, and once your signature is on that line, you are legally obligated to abide by that contract’s terms. When a contract has an error, ambiguous language, or previously undisclosed terms, it can throw a wrench into the purchase process.
In some cases, verbal agreements never make it into the contract, making it easy for the party that made the commitment not to uphold their end of the deal. This is more common with private transactions in which the buyer and the seller know each other. But unfortunately, you cannot rely on verbal handshake agreements the way you could in past eras.
These days, it is crucial to get everything in writing, even if you are doing a private sale where the arrangement seems less formal. This is why it is crucial to work with an experienced Maryland real estate attorney, so you can be protected from last-minute contract surprises that threaten your sale.
