Thomas J. Scribner
What Issues Do Clients Typically Face in Real Estate Transactions?
(Please understand that the answers to these questions are general in nature and may not cover every individual situation.)
Perhaps the biggest issue in a real estate transaction is dealing with expectations. The parties have different expectations when they go into it, and that can be a wide range of things. For instance, you represent that you are selling nine acres. When the survey comes back, however, the actual property is eight and a half acres. There are different things that you can do to deal with that. You can file a quiet title, and see if you can get that other half-acre, or maybe the price needs to be renegotiated based on not having that half-acre.
Terms and timing are big things. Sometimes the other side tries to sneak terms in there that nobody agreed to. Timing is crucial. Sometimes the seller needs cash tomorrow, and the buyer needs financing. If the buyer expects the seller to finance them, it won’t work with a cash-out seller, or terms will have to drafted to make it acceptable to the seller. In the past recession, we saw this many times. If you, as a buyer, put something under contract you give yourself two years to do the due diligence and close. When the economy is bad, that is great, because you are contracted for nothing, and then put yourself two years out, and hope that the property comes up in value. If you put a property under contract in 2015, and the seller gave you two years to close, the property has probably increased twenty to thirty percent difference in value. Great for the buyer. Not so much for the seller.
In such a case it is not uncommon that the seller wanted out of the contract because now, two years later, his property is worth a lot more. He wants that increased value. He starts looking for parts of the contract that the buyer has not followed, and get out of the contract so they can sell it for the increased price. I have seen that several times. It is the difference in expectations, but lots of litigation comes out of those sales documents. It is at the time of preparing and signing those documents that a real estate lawyer is needed. Properly drafted sales documents can greatly lessen later litigation.
What Is a Clear Title? How Can It Affect the Sale or Purchase of Property?
A clear marketable title means that the property is what you say it is. It does not have liens or other items clouding up your title, such as easements, notices of interest, or lis pendens. A title company creates a report that shows the issues that must be resolved prior to closing. It then gives an insurance policy to the lender regarding those issues. There are several things that a title insurance policy will not cover, however. Perhaps, when you look at the property, there might be a fence that goes down the middle of the property, and you need to know if somebody else has a claim to that. Adverse possession is a very real doctrine in Utah and if, after seven years, someone has paid the taxes, and has openly used the ground as hers, she could bring a lawsuit claiming the property was hers and would have a very good chance of winning.
Boundary by Acquiescence Case or Establishing an Easement Case?
A boundary by acquiescence case is a lawsuit to determine if a fence or other boundary that is not the surveyed property line but has been used as the boundary line for so long that the court will determine it should be the boundary line. To win this case, there has to be a recognized boundary between the neighboring landowners. Typically this boundary is a fence, but it could be a row of trees, a river, or it could be something that people would recognize as a boundary for a long period. The courts have held that a long period is defined as twenty years that you “acquiesced” that boundary to be the boundary.
For easements, there are several different doctrines, but the most common one that I see is probably a prescriptive easement. In a prescriptive easement, you need the use of an easement for a long period of time, which has been deemed twenty years, and your use has to be continuous in a pattern that is not sporadic. Therefore, you cannot use the road for a month, and then come back ten years later, and use the road for a month, and have a prescriptive easement survive. For instance, in a recent case we’ve had, one issue was that the road was used to drive into a summer cabin. Were they limited to just drive a car up there in the summer, even though the road was historically used as a farm a long time ago? A much better solution to the problem would have been to get a written and recorded easement to remove such issues.
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