Real Estate Investment Attorneys

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 What Is Investment Property?

Investment property refers to real estate purchased to gain monetary profit from it in the future. The owner of a piece of investment property generally does not live on the premises of the investment property. This contrasts with other types of property, such as residential property, where the owner generally resides daily.

Instead of using their investment property as their primary residence, real estate investors will take specific actions to make the property more profitable. Examples include, but may not be limited to:

  • Renting the property out to someone else in order to gain an income from the property;
  • Converting the property for specific usages, such as an office for a small business;
  • Making additions or home improvements to improve the value of the property, such as adding a story or adding a garden;
  • Restoring or renovating old property, also known as “fixer-uppers,” to then sell at a higher price; and
  • Simply selling the property at a later date, such as when the property’s market value has increased with time.

While most property owners intend to profit from their residential home if they sell it in the future, investment property is most commonly purchased with the intent of taking actions similar to those mentioned above.

Some of the most common examples of investment property include:

  • Second homes;
  • Homes purchased with the intent of renting out the rooms;
  • Condos;
  • Cabins;
  • Vacation homes;
  • Timeshares; and
  • “Destination” homes, such as homes that are located near local attractions.

There are some circumstances in which a person would invest in business or commercial property. However, these are often categorized differently than residential property, because they frequently involve different laws and may operate on a larger scale.

What Are Some Different Real Estate Investment Methods?

Some other common real estate investment properties include apartment buildings, vacation homes, and commercial store space. There are several ways to invest in real estate, specifically to profit from the property later.

Some of the methods you can use to make real estate a part of your investment portfolio include, but may not be limited to:

  • Purchasing a joint ownership position in a large building;
  • Purchasing a co-op;
  • Purchasing commercial space and then leasing the space to a business;
  • Purchasing residential property in an up-and-coming neighborhood for a low price and then sitting on the property until it becomes profitable to resell the property;
  • Flipping residential property by purchasing an undesirable home at a low price, rehabbing and renovating the home, and then reselling the home at a higher price; and
  • Purchasing an inexpensive home and renting it out to tenants.

What Are Some Common Real Estate Investment Disputes?

Real estate investments are frequently the source of legal disputes or conflicts. An example of this would be defective titles. The phrase “to have valid title” to property means that a person has the exclusive legal right to own and use that specific piece of property. In order for a title to be valid, that title must be free of defects. When the title is defective, the seller of the property may be required to “clear title,” or remedy title defects, before the seller can complete the sale of their property to a buyer.

Another common real estate investment dispute would be fraud. The crime of real estate fraud occurs when one person involved in a real estate transaction makes false representations of relevant information to another person who is involved in the transaction. Alternatively, one person may fail to disclose relevant information to the other person, and that other person then acts on the false information or omission to their financial detriment.

Fraud in real estate transactions can occur during any phase of a real estate transaction, from the mortgage application or approval phase through to the closing of a sale or purchase of a piece of real property. However, prospective renters can also be the victims of real estate fraud. The crime of real estate fraud may be punishable by time in jail or prison, and/or the imposition of a criminal fine.

Other examples include:

These types of real estate investment disputes frequently require a legal damages award to compensate the non-liable party for losses they experienced in association with the dispute. In addition to these real estate legal problems, you may encounter other kinds of lawsuits directly related to your role as an investor. This is especially true if the property is owned as part of a trust or by an investment group to which you belong.

Some real estate investments are handled through an agent-principal relationship. An example of this would be when a trustee addresses real estate investments on behalf of another person, such as in a trust fund account arrangement. Under these circumstances, the trustee may have a legal duty to invest the property wisely and prudently. If the trustee violates their legal duties and responsibilities, they could be held liable for breaching their fiduciary duty.

How Are Real Estate Investment Disputes Resolved?

If you encounter an issue with your investment property, you should first gather all necessary paperwork that could serve as evidence to support your claim. Examples of such documents include:

  • Contracts, especially sales contracts;
  • Titles and deeds;
  • Mortgage paperwork;
  • Sales advertisements;
  • Inspection reports;
  • Copies of all written communications, such as e-mails;
  • Lease documents;
  • Land use certificates;
  • Tax information;
  • Receipts or proof of payment; and
  • The names and contact information of all potential parties and witnesses.

Once you have gathered all of the relevant documentation, you should bring it to a real estate lawyer who can advise you on your best course of action. That may be simply sending a demand letter, or negotiating with the other party.

Do I Need A Lawyer For Help With Real Estate Investment Problems?

Real estate law is a considerably complicated area of law because it combines multiple different areas, such as tax, contract, and civil law. An experienced real estate lawyer in your state will be best suited to help you understand your legal rights and options according to your state’s specific real estate laws. They will also be able to represent you in court as needed should your real estate investment issue result in a lawsuit.

Additionally, your real estate attorney can negotiate with the other party on your behalf to ensure that you receive the best possible outcome. The amount of damages you receive is often dependent on the skill and experience of the lawyer handling your case. Lastly, real estate and property laws can be subject to frequent changes and updates. An attorney near you can help keep you updated when it comes to new developments in the laws of your state.

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