Property and real estate law varies from state to state. Some states even require a lawyer to oversee real estate transactions and be present at the time of closing. Although Minnesota is not one of those states that require a lawyer to purchase real estate, many people hire one anyway. Real estate law is confusing and affects everyone – homeowners, renters, and landlords. Due to the confusion surrounding real estate, it is common for property buyers to hire a real estate lawyer to help them understand exactly what’s going on, file important documents, and guide them through each step of the buying process.
What is a Real Estate Lawyer?
The definition of a real estate lawyer is a legal professional who is licensed and specializes in the legal aspects of buying and selling real estate. These lawyers work with individuals as well as corporations.
In short, a real estate lawyer is someone you can trust to represent your interests throughout a legal process that involves property.
What Does Minnesota Real Estate Law Cover?
Minnesota real estate laws and regulations include many different topics related to purchasing and selling a property, which refers to the land and everything on it, from structures to appliances and fixtures. A trustworthy real estate lawyer will be able to assist you with any combination of the following topics and guide you to make the best decision for your situation.
- Commercial Real Estate
- Residential Real Estate
- Landlords and Tenant Relationships
- Mortgages and Foreclosure Law
- Land Use and Zoning
- Real Estate Litigation
- Title Examination
- Quiet Title Actions
What Does a Minnesota Real Estate Lawyer Do?
Real estate law covers an awful lot, which means real estate lawyers do an awful lot. They document and examine real estate transactions (i.e., purchases, leases, inspections, appraisals). If something goes wrong, these lawyers support you by filing and defending lawsuits in court. Real estate lawyers also handle quiet title actions, landlord-tenant relationships, and mortgage forbearance and deferment.
The ultimate purpose of a real estate lawyer is to protect you from the unexpected and foster an easy, minimum-stress legal process. Let’s dive into the ways real estate lawyers serve their clients.
Document and Review Real Estate Transactions
Some people hire real estate lawyers for peace of mind throughout their property transactions. Lawyers are trained to zero in on problems that would ordinarily go unnoticed by a client. In this scenario, the lawyer acts as a guardian to make sure their client doesn’t fall into any traps. The client will negotiate a deal on their own, sign a contract, and simply ask the lawyer to examine any legal title or environmental issues, and any contracts or other related documents.
Quiet Title Actions
A real property title that needs to be cleared in order to establish a persons’ title to that same property is called a quiet title action lawsuit. This type of legal proceeding usually stems from a dispute between co-borrowers, co-owners, or from a party on a deed of trust that no longer exists. Quiet actions are filed for a few reasons:
- Resolve administrative errors that left liens on the property.
- Establish full ownership of the property
- Amend errors in a property title
- Solve quitclaim deed issues
The purpose of filing a quiet title is to ‘quiet’ any claims or challenges to a title.
What About Rentals? Landlord-Tenant Relationships
The 1968 Fair Housing Act outlines legal protections for homebuyers and renters. This Act establishes minimum standards for rental conditions. If any of these standards are not met, landlords must face the consequences. Regardless of the property type you’re renting, the landlord is bound by law to maintain the property so that it’s fit for living, according to the Fair Housing Act terms. Although the minute details of the Act vary from state to state, the Act ensures the following for tenants nationwide:
- Restriction on raising rent
- A right to privacy
- A right to call an inspector or emergency services
- Refunds are offered to renters that meet the income qualifications (This isn’t nationwide, but it does apply to Minnesota)
Land Use vs. Zoning
Although land use and zoning laws have defined and will continue to define the look of our surroundings, they are famously confusing. Land use doesn’t have a universal definition. One way it can be defined is land that is characterized by its potential uses and what is already there. Zoning refers to government land regulations that are codified in local zoning laws or ordinances. The sticking point here is that land use is flexible, and zoning is bound by law. Zoning laws can only be changed once a public hearing has been held to discuss the amendment and the amendment has been approved. This is where a real estate lawyer comes in. There is a ton of legal jargon surrounding zoning laws and a public hearing that has to take place. Even land use can require some legal assistance to change in some cases.
Mortgage Forbearance and Deferment
If a homeowner is struggling to make their mortgage payments, foreclosure isn’t the first option. It’s the last resort. Mortgage forbearance or mortgage deferment are the two available options to avoid foreclosure. Although forbearance and deferment are often used interchangeably, they are not the same thing. Mortgage forbearance is the first step, and deferment is the second. Not everyone will qualify for these options. To pursue either option, one of the following criteria must be met:
- Still lawfully occupy the home
- The home is your principal residence
- Monthly expenses must be a certain percentage of monthly income
- The lending bank must state an expense-to-income ratio.
Mortgage Forbearance
The first option to explore when mortgage payments can’t be made is forbearance. This simply means pausing your mortgage payments temporarily. The borrower and the lender will come to an agreement to halt or reduce payments for a certain amount of time (not longer than twelve months). The payments will have to be paid back once the period of forbearance is over. Repayments can be made in full or up to twelve installments. There may or may not be interest; it depends on the agreement.
Mortgage Deferment
The second option to follow forbearance is deferment, which means the borrower and the lender suspend loan payments for a certain period of time and increase the loan’s term. With a deferment, the borrower doesn’t have to pay back the amount owed right away. Instead, it is added to the end of the loan’s term. Again, interest may or not be a factor. It depends on the agreement.
If you’re unable to make your monthly payments, seek help from a real estate lawyer before it’s too late and foreclosure is the only choice.
Foreclosure Proceedings
Foreclosure is typically a scary and confusing process. When a homeowner defaults on their loan, the bank tries to cover the amount by forcibly taking ownership of and selling the home. Default happens when a homeowner misses a certain number of payments or fails to meet other loan requirements. If the mortgage forbearance and deferment options have been exhausted and foreclosure is the only option, call a real estate lawyer.
Some homes are foreclosed on even though foul play was involved because the owner didn’t call a lawyer. There are many reasons to fight a foreclosure, including:
- The loan servicer broke from standard procedures
- The foreclosing entity can’t prove it owns your loan
- The service made a mistake
- Military Service (Military service members receive special conditions under the Servicemembers Civil Relief Act)
- The bank engaged in dual tracking
Even if payments truly can’t be made, but you want to keep your home, a real estate lawyer can still help.
Do I Need a Real Estate Lawyer?
If you’re wondering when to hire a real estate lawyer, there are many factors at play. Depending on the situation, you may have to hire legal assistance no matter what. Basically, whether or not you need a real estate lawyer depends on what you’re trying to accomplish. If you feel confident in your ability to navigate the home buying, mortgage forbearance, mortgage deferment, or foreclosure processes, that’s up to you. Should you need to take your landlord to court, amend a zoning law, or settle a quiet title action, you will certainly need legal aid.
Oftentimes, lawyers provide clients with peace of mind, which is priceless. Any of the legal processes that have been discussed have huge, life-long implications, which is why many people find it liberating, in the end, to have hired a real estate lawyer. While we practice many areas of the law at CJB Law, we do real estate law, and we do it well. If you’re in need of legal advice on real estate or any other matter, schedule a free consultation today.