Legal Malpractice in Real Estate Transactions

Purchasing or selling real estate is typically the largest transaction anyone will ever undertake in his or her life. It can be your main residence or in many instances, a vacation home or an investment that you can flip or retain to rent out. For any real estate matter, you should expect competent legal representation given the expenditure at stake and the future benefits of the asset. Unfortunately, attorneys make mistakes or fail to live up to the appropriate and accepted standard of competence. 

Errors that May be Legal Malpractice

There are some common errors that a real estate attorney can make that can constitute legal malpractice in some instances.

  1. Mortgage contingency—Generally, real estate transactions are undertaken with a written purchase agreement. A real estate attorney must carefully scrutinize the contract if s/he wishes the client to have the needed protections. For example, should your application for a mortgage be rejected, you should have a contingency provision that allows you to exit the purchase without any penalties. 
  2. Failure to conduct a proper title search–Although not always the case, your attorney may be the one conducting a title search that is needed to identify issues in the chain of ownership or title. There may be lines from a judgment clouding the title and that must be cleaned up before the transaction can proceed. Other liens can be home association fees, tax liens, and others. Your attorney should also advise you to obtain title insurance coverage to cover losses from a cloud on the title.  This is a very common form of legal malpractice in our experience.   
  3. Environmental issues— these are not to be ignored. Your potential residence may sit on an underground oil tank or some other potential hazard. Having the right to conduct an environmental assessment will protect you from these substantial risks to your investment. These issues can be uncovered if your attorney undertakes a review of all property records, zoning and permits.  We have had these cases at our firm in Massachusetts.   
  4. Environmental concerns–these are not to be ignored. Your potential residence may sit on an underground oil tank or some other potential hazard. Having the right to conduct an environmental assessment will protect you from these substantial risks to your investment. These issues can be uncovered if your attorney undertakes a review of all property records, zoning and permits. 
  5. No certificate of occupancy–A not uncommon issue arises when a seller tries to present his house as a two bedroom when it is legally a one bedroom family home, or a basement apartment may have been converted into a multiple family home. These will require a certificate of occupancy from the city or town as it will for any brand-new home. The certificate shows that your home is safe to occupy, is up to code, and indicates how the building is classified for zoning purposes such as commercial, residential, retail or industrial. Imagine your outrage if after the sale is complete, you find that you are unable to occupy it or that it cannot be used for the purposes for which you intended. 
  6. Failure to comply with deadlines or calendar—this can include the failure to timely file a lien or a renewal of judgement. There are calendaring or software systems that can prevent these omissions. 
  7. Not following a client’s instructions—a real estate deal must comport with the client’s wishes. All conversations with the client should be documented and sent to the client for approval and acknowledgment to avoid such misunderstandings that can be very costly.  And, in real estate, everything must be in writing.  
  8. Missing heirs—when someone dies intestate or without a will, there may be doubts about the ownership of the decedent’s property that your attorney needs to address.  Death certificates and extensive title searched may be needed.
  9. Boundary issues—is an adjoining property owner encroaching on the property or claiming rights over land that should be yours? If so, conducting a survey can remedy these concerns or put to rest any potential conflicts before the transaction is consummated. There may also be problems with access to your potential property that can render it unusable. These could be fences, gates, power lines, or other obstructions. A failure to do so before the sale is completed can lead to expensive litigation with the adjoining landowner.  Get everything in writing as to boarders, boundaries, fences, etc.  

What to Consider Before Retaining a Real Estate Attorney

A real estate transaction is just as important so you want to do your own due diligence in finding a real estate attorney who is experienced in handling similar transactions. You can begin by doing research on a potential lawyer’s credentials, experience and client reviews, if any. For example, how experienced is the attorney in real estate or does she have a real estate or broker’s license? There are lawyer directories you can search for reviews and ratings.

You can also rely on referrals from people who have used a particular attorney and were satisfied with the experience. Most of us have family, colleagues, or friends who have purchased or sold real estate who can be a resource for you. If you have used an attorney in a different matter, that attorney can often refer you to real estate attorneys who have proven records of success. 

Next, schedule a consultation with the attorney to discuss your transaction and what the attorney can and will do for you and who will explain your rights and obligations. EXPLAIN YOUR ISSUES OF CONCERN!  Be sure the attorney has handled the same type of transaction such as buying commercial property or an apartment building, or a home where there is a homeowner’s or condo association and who can explain to you issues that can or do arise in communities where homeowners find themselves at odds with the association or neighbors.

If you have specific concerns or needs, be sure to not only inform the attorney but confirm them in an email to the attorney and ask for acknowledgement of receipt and that it is understood. 

Retain a Legal Malpractice Attorney from Burns and Jain

At Burns and Jain, we have attorneys highly experienced and knowledgeable in legal malpractice matters and who can advise you about the merits of your claim. Call us at (617) 227-7423 for a free consultation about your potential legal malpractice claim. 

Leave a comment

Your email address will not be published. Required fields are marked *