Legal complications to understand before you buy a home
Buying a home comes with so many legal complexities and hurdles, but it’s in your best interest that you get to know as many as possible to avoid any major issues along the way.
How likely is it that you’ll have to deal with a homeowners’ association? The chances are pretty darn high, and they’re getting higher all the time. They’re everywhere these days, and not paying attention to them could land you in some pretty hot water.
A homeowners’ association is an organisation that is made up of several people in the concerned area. (Basically, your neighbors.) They’re the people who concern themselves with how the neighborhood looks as a whole, as well as with the management of nearby community areas.
Why do you need to worry about a homeowner’s association? Because they’re the ones behind the covenants, conditions, and restrictions that come with many properties. These things, as the terms suggest, restrict what you can do with that property. The association’s interest in restrictions stems from the interest in the general upkeep and aesthetic of the neighborhood.
Boundaries and easement
You’d be forgiven for thinking that boundaries are the easiest thing to deal with when it comes to property. Isn’t it usually pretty clear where someone’s property begins and ends? Aren’t there, like, fences and doors and lawns and stuff that help us figure that kind of thing out? Unfortunately, it’s not always that easy.
There aren’t always clear boundaries – and even the usual delineations such as fences and gates don’t always tell the full story. As odd as it may sound, they’re not always totally accurate. For all you know, a section of your garden or lawn may actually belong to your neighbor, or even to the council. Making modifications to that area may land you in trouble due to property encroachment laws.
Easement is a property law that deals with someone having a legitimate but nonpossessory interest in a part of your property. Which means… what? Let’s say that the only means to get to your house without walking on your lawn is to use a path that crosses into your neighbor’s property. You have a non-possessory interest in the section that belongs to your neighbor – you don’t own that part, but you actually need to use it!
Transfer of ownership
Trust me, it’s nowhere near as simple as it sounds. People are always underestimating this task. They believe that it’s merely a signing of a couple of papers on the part of both the buyer and the seller. The transfer of ownership – also referred to in this business as the title transfer – is very involved.
It’s not just the signing of a couple of contracts. This process often involves a written analysis of the dealings with the deed, a detailed property description, as well as an in-depth study of the several encumbrances that can occur. These can include mortgage problems and deeds of trust. The numbers of tenants – and to what extent each tenant will own the property – will also complicate things.
The several acts that are required to get all of this done can all be bundled into one legal act known as conveyancing. Some buyers may choose to take this task on themselves; others may see what solution their agent has to offer, but it may be in your best interest to look into getting independent conveyancing done. You can compare conveyancing quotes online to get a better idea of what exactly it will involve and how much it will cost.
Potential hazards and disclosure
Does every home come with potential hazards? Well, if you want to be super literal, then yes. There isn’t really such a thing as a home that is completely free of hazards. This is why you may be compelled to purchase hazard insurance when you’re signing up for a mortgage. It’s true that not every home has particular risks of being vandalised, being set on fire, or being wrecked in a storm, but it really could happen to any home, so lenders will need you to buy this sort of insurance as a means to protect their investment.
So what exactly would a particular, unique risk intrinsic to the property be? Here we face another legal complication: the issue of disclosure. Essentially, a seller is obligated by law to disclose any major physical defects that the house has. (Of course, if it can’t be proved that they did know about a defect that manifests later, they’ll probably be protected from the law’s wrath.)
How exactly do you ensure this law is actually enforced – that you don’t end up purchasing a property with undeclared defects? The best thing you can do is get an independent inspection. Otherwise, you could be taking a huge risk.