The field of real estate law can seem very complex, especially when you are faced with large transactions such as the purchase or sale of real estate. Whether you are buying a commercial property for investment or buying your first home, many mistakes can occur in real estate law, and some of them can cost you dearly. Therefore, understanding common mistakes in real estate law and knowing how to avoid them is essential to ensure that your real estate transaction goes smoothly.
Errors in sales contracts
Sales contracts or deeds of sale are at the heart of any real estate transaction. On the other hand, a common mistake in this area is the poor drafting of these contracts. Sometimes, essential details are omitted, or vague clauses can lead to misunderstandings between the parties. Omissions can concern elements such as financing conditions, responsibilities in the event of latent defects, but also the lack of understanding of the clauses of a promise to purchase or ignorance of the costs related to the certificate of location.
To avoid this, it is essential to call on a real estate lawyer to ensure that the contract faithfully reflects the agreement of the parties, without ambiguity. A property lawyer will be able to guide you to protect your interests and help you avoid future conflicts.
Verification errors
Before concluding a real estate transaction, due diligence (or pre-purchase investigation, if you are buying a home) is a must. However, many people neglect this crucial step. Problems like water damage, mold, foundation damage, etc. may arise if this verification is ignored.
Moreover, Article 1726 (2) of the Civil Code of Quebec stipulates that, before buying a house, the buyer must act as a “prudent and diligent buyer” if he wishes to have the possibility of suing the seller for latent defects. For the seller, it is also important to declare problems such as real rights, mortgages or hidden defects affecting the property, otherwise they may incur liability.
Rigorous diligence (such as an inspection for latent defects in the purchase of a residential building or house) will help avoid unpleasant surprises after the acquisition of a property. A good practice for people buying residential properties is to call on a building inspector or other specialist in the field before concluding a transaction. Nevertheless, it is important not to forget to follow the recommendations and to investigate any signs of problems reported by this expert!
Financial errors
Financial mistakes can be devastating in real estate. Improper management of financing or mortgages can lead to long-term difficulties.
For example, a poorly structured loan, an interest rate that is too high or a lack of understanding of the financial commitments related to the purchase can have significant repercussions.
In order to avoid these real estate law mistakes, it is essential to take the time to draw up a detailed budget and to fully understand all the implications of a mortgage.
Zoning and Permitting Errors
Compliance with zoning rules and building permits is often a neglected aspect in real estate transactions. Buying a property without checking its compliance with local regulations can lead to penalties, fines or difficulties in obtaining the necessary permits for future work.
Before making any purchase, it is imperative to consult a real estate lawyer who will be able to verify the compliance of the property with the laws and make sure to inform you of any relevant information such as the presence of an easement or competing real or hypothecary right on the property. This will save you from costly legal complications after the transaction.
How can these mistakes be avoided?
It’s simple, to avoid common mistakes in real estate law, the key lies in careful preparation and great caution throughout the process.
It is strongly recommended that you hire an experienced lawyer in real estate law, who will be able to review every legal aspect of your transaction and offer you sound advice. Their legal expertise will ensure that all legal bases are covered, minimizing the risk of errors that can lead to costly consequences.
Our real estate lawyers at Boavista Legal Services would be happy to accompany you from the beginning to the end of your real estate transaction, or help you settle a dispute after a real estate transaction. Contact us today to schedule an appointment!
Don’t let legal pitfalls cost you!
Disclaimer – This article is intended to inform and raise public awareness of legal issues. The legal information in this article is provided for informational purposes only and is likely to vary significantly over time and according to the precise facts of each situation. This article is not a substitute for a lawyer’s legal opinion and does not engage the liability of Boavista Legal Services Inc., its lawyers, articling students, employees, successors and subcontractors.