Real Estate

Real Estate Law

When businesses and individuals need an attorney to handle real estate matters, they turn to Tim. Tim represents buyers, sellers and brokerages in all facets of real estate law.

Representative matters include:

drafting and reviewing purchase agreements;
due diligence and closings;
drafting and reviewing easements;
drafting and reviewing leases;
land use issues;
boundary disputes;

real estate in bankruptcy matters;
real estate litigation involving partition, adverse possession, and;
claims against real estate brokerages;
foreclosure;
specific performance.

An Explanation of Sample Real Estate Topics

Quiet Title Actions

Quiet title actions are lawsuits involving issues settling title to real estate which is disputed. They are all about research involving questions of ownership which may go back decades or even centuries. Tim has litigated these cases and is experienced researching sources of historical information that can make the difference in a quiet title case. Tim assists land owners, identifies potential parties, possible conflicts and legal rights. He knows how to handle land owning defunct companies and how to approach the issue of otherwise unidentified/unidentifiable parties.

Purchasing or Selling a Home

Purchasing or selling a home is one of the largest financial transactions someone ever undertakes. Having Tim involved provides peace of mind.

For buyers, Tim can:

explain the terms of the purchase contract;
protect buyers from hidden liabilities or unnecessary expenses;
review real estate documents related to title, mortgage, and taxes;
record legal documents pertaining to the transaction;
attend closing to address questions, and;
ensure complete and valid documentation.

For sellers, Tim can:

ensure that the purchase and sale agreement properly protect the seller’s interests;
deal with legal issues that arise from a title search, and;
represent the seller during negotiations explaining the documentation.

Foreclosure Defense

Real Estate Settlement Procedures Act

The Real Estate Settlement Procedures Act (RESPA) is federal law which requires lenders, mortgage brokers, or servicers of home loans to provide borrowers with pertinent and timely disclosures regarding the nature and costs of the real estate settlement process. Two tools of RESPA which a consumer can use against a servicer or owner of a note is are the ‘Qualified Written Request“ and the “Request for Information”. In the event a consumer has a question or requires information about their mortgage, the mortgage company or its servicer must provide a timely, substantive response to the question within a specific period of time or face a penalty. The act also prohibits specific practices, such as kickbacks, and places limitations upon the use of escrow accounts. Tim has litigated RESPA actions in state and federal courts and has presented appellate argument before the U.S. Tenth Circuit Court of Appeals in RESPA cases. The tools provided by RESPA help consumers battle large financial institutions. Tim can use them to help you.

Partition/Subdivision

Partition is an action which divides land into parts.

Partition typically arises in the context of tenants in common when there is a change of ownership (many times due to the death of one of the tenants-in-common). Tenancy-in-common agreements usually allow a tenant to choose a beneficiary in the event of death. A tenant-in-common relationship is one in which two or more people get together to share real estate ownership. Co-tenants may be able too sell their interests, but not the underlying property. Nor can co-tenants force other owners to sell without legal assistance. A petition to partition is the legal assistance needed and generally takes two forms.

Partition in Kind. Sometimes known as “actual partition,” severs the individual interest of each co-tenant, and divides the physical real estate between them. This may be a solution for land but isn’t effective when it comes to buildings.

Petition by Sale. This is also known as “partition by lactation” or “partition by succession.” It’s accomplished by a court-ordered sale of the property, with the proceeds divided among the owners.

A Partition’s Disadvantages . . . And Benefits. A partition dispute can be time-consuming and, with court costs and attorney’s costs can be expensive. It also comes with no guaranty that building ownership will remain intact. A judge force a sale through: involving a receiver to handle the sale; a real estate agency, or through auction, with a sheriff overseeing the process. Either way, proceeds could suffer substantial diminution.

Avoiding Partition. The best way to avoid a partition lawsuit is to prevent it from happening in the first place by having Tim create a settlement agreement in the event of a change of circumstance to the tenancy-in-common. Such an agreement outlines a property’s ‘hold period’ and ‘conditions of sale’. Experienced attorneys like Tim will automatically include this type of agreement among co-tenants during syndication.

In a non-syndicated ‘tenancy-in-common’ in which there is no settlement agreement, other options may avoid a court-ordered sale: 1) Buy Out. The co-tenants can agree to buy exiting tenant’s share, or; 2) Mediation. A mediator can help work through the issues, without the time, hassle, and expense of going through the courts. Good mediators craft a compromise palatable to all sides. Tim can guide co-tenants through the process.

Subdivision is division of land into smaller parcels for further development. A developer must pursue multiple legal steps to subdivide. Sometimes the zoning must be changed. Permits or certificates of development must be obtained and must comply with state and local restrictions. A recorded exemption begins the process for subdividing land into separate lots and recording them with the county. Under Colorado state law, any property split off from existing property lines requires approval from the controlling municipality. Tim is experienced in this area and can help.

Time Shares Issues

For remorseful purchasers, timeshare cancellation can be complicated. Fortunately, there are options. Tim can help escape the burden.

Rescission. Under Colorado law, a timeshare purchaser has a five-day rescission period. If a consumer is within the rescission period, a cancellation letter sent certified mail should accomplish the task. Under New Mexico law, the rescission period is seven days.

Return the timeshare. In certain circumstances, a timeshare may be returned by offering the resort a ‘deed- in-lieu of foreclosure even if a purchaser is beyond the formal rescission period.

Re-selling the Timeshare. The secondary market for re-selling a time share is usually saturated depending on the location. As such, return of the original purchase price is highly unlikely. Additional problems may arise if there are restrictions on the time share limiting its use to close family or friends. Before selling a time share, its value should be researched. The obvious market for re-selling a timeshare is to the purchasers of other timeshares at the same resort who purchased their timeshares reserving the similar dates for use. These purchasers may want additional time at the resort. Craigslist and bulletin boards around the resort and in town are a good place to post. Be forewarned that the timeshare financial documentation may not let others assume the mortgage.

Bankruptcy. A Chapter 7 bankruptcy offers a clean escape from a timeshare purchase but will have negative consequences for a consumers’ credit score. Consumers must also be able pass the states bankruptcy ‘means test‘ and should be able to shield most of their assets by taking effective advantage of the property ‘exemptions’ offered by their state for bankruptcy filers.

Civil Suit. If certain expenses (ie: maintenance or restrictions on a timeshare were undisclosed at the time of sale, consumers may have a cause of action against the timeshare seller for misrepresentation or fraud. This can be an effective lever for on-going negotiations.

Regulatory and Legal Violations. Timeshare development, sales, regulation and law is complex. It is unusual not to find some violation in documentation which may provide leverage for a remorseful timeshare owner to negotiate rescission of their contract with the resort.

Be Careful. Tim advises against the following:

Don’t Rent out your timeshare. Most resorts don’t allow it and an irresponsible renter can trash the premises leaving a large repair bill. The money made probably won’t cover costs.
Don’t give away a timeshare interest. There are usually complications when it comes time for a consumer to sever their interest with a resort. Most timeshares are deeded with clauses which do not permit another party to assume the loan.
Don’t use a timeshare exit company. On average, these companies charge between $5,000 and $6,000 taking a year or longer (12–18 months) to accomplish the objective. The cost and the time can vary depending on a number of factors (other contracts, upgrades, vacation date changes, damages to a unit, delinquent maintenance fees etc.). Each situation comes with its unique set of obstacles.

FAQ's

Q: What is a purchase agreement?

A: A real estate purchase agreement is also be called a sale contract or purchase contract. It is a written, binding agreement between two or more parties for the transfer of a home or other real property. Real property is a legal term for what is essentially unmovable or fixed property, such as land or buildings.

Q:        What is the due diligence period in real estate?

A:        Signing a contract to purchase a home is the beginning of the process. Homebuyers must then navigate the due diligence period, which allows them a certain amount of time to inspect the property and review important information before closing the sale. The due diligence period can be complex and requires careful attention. Due diligence is an investigation or audit of paperwork to confirm all facts, that might include the review of financial records and building permits. Due diligence refers to the research done before entering into an agreement or a financial transaction with another party.

Q: What should be done during due diligence?

A: A good due diligence check list should include the following:

a professional home inspection;
a property surveyed;
lead-based paint testing;
asbestos testing if asbestos is suspected;
pumping and inspecting the septic tank;
mold and air quality testing;
termite inspection;
testing for electromagnetic fields;
flood maps inspection.

Q: What is an easement?

A: An easement is the legal right of a non-owner to use a specific part of another person’s land for a specific purpose. Easements can be granted by a property owner to another person, such as a neighbor, or to an entity, such as an electric and gas utility for access. A property easement is generally written and recorded with the local assessor’s office. The documented easement will show up when a title search is conducted and it stays on record indefinitely, unless both parties agree to remove it.

Q: What is a partition?

A: A “partition” occurs when a court determines how to divide land among the parties who own it. When the land cannot be divided fairly or voluntarily, a court can order the property be sold and the proceeds be divided among the parties. There are two mains types of legal partitions of land ownership:
First, a partition in kind, also known as an “actual partition,” severs the individual interest of each joint owner. Each owner ends up controlling an individual, divided portion of the property. This is the most common type of partition, and tends to be easiest when the parties generally get along, but simply disagree about the best use of the land, and also where the land is easily divided into discrete portions. This allows for a “conscious uncoupling” where each person takes a piece of the land as his or her own, and records that division with the county clerk.
Second, a partition by sale, also known as partition by “licitation” or “succession,” is accomplished by selling the entire property and dividing the proceeds among the owners. This type of partition is used when partition in kind is difficult to perform or when the parties cannot agree on division.

Q: What is adverse possession?

A: After a certain amount of time residing on a property, a squatter can claim ownership. In Colorado, a squatter must continuously and openly possess a property for 18 years before they can claim adverse possession (See CRS § 38-41-101 et seq). This can be shortened to 7 years if the squatter has been paying taxes and has color of title. When a squatter claims adverse possession and gains legal ownership of a property. The squatter is no longer a criminal trespasser and has permission by law to remain on the property.

There are five distinct legal requirements that the squatter must meet before they can claim ownership through adverse possession. The occupation must be:

Hostile: Simple Occupation is required. A hostile claim as one that goes against the interests of the owner. The trespasser may or may not know that the land belongs to someone else, but the fact that they are occupying the land is enough to fit this claim. The trespasser must be aware that his or her use of the property is trespassing (meaning that they know they have no legal right to the property). The third definition of ‘hostile’ means that the trespasser has made an innocent error in assuming that they have a right to occupy the land. This could be a reliance on an invalid or incorrect deed that they thought was valid. The squatter must be using the property “in good faith” and is unaware of the property’s legal status.

Actual Possession: Actual possession requires that the trespasser actually possesses the property. This means that they are physically present and treat the property as though they are the owner. This can be established by presenting proof of efforts to make improvements or beautify the property.

Open & Notorious Possession: This means that anyone must be able to tell that someone is squatting on the property. This includes any property owner who makes a reasonable effort to investigate. Basically, this means that the squatter isn’t trying to hide that they live there.

Exclusive Possession: The squatter or trespasser must not share possession of the land in question with other tenants, owners, or squatters. They must be using the property exclusively.

Continuous Possession: The squatter has to reside on the property for an uninterrupted amount of time. In Colorado, it’s required for the squatter to occupy the property. Each time the squatter leaves the property for long enough for it to be considered ‘abandoned’, this time period begins again. Without this continuous occupation, they cannot claim adverse possession.

If these five elements are fulfilled by a squatter, they have grounds for a claim to the land by adverse possession.

Q: How can one protect oneself from squatters?

A: To protecting oneself from squatters, a landowner should:

inspect the property regularly;
secure the property by blocking all entrances and locking all doors and windows;
place “No Trespassing” signs on the property, especially if it isn’t currently occupied;
serve written notice as soon as squatters are discovered;
offer to rent the property to squatters, if possible, to form a legally defined relationship (landlord/tenant);
call the sheriff (not the local police) to remove squatters from the premises;
make sure that they have someone keep an eye on the property while on vacation or deployment;
hire Tim to take legal action to have squatters removed from the premises.

Q: What is foreclosure?

A: A foreclosure allows a lender to recover the amount owed on a defaulted loan by selling or taking ownership of the property.

Q: What is a ‘Qualified Written Request’?

A: A qualified written request is a letter written to the servicer of a mortgage for the purpose of resolving errors related to the account and (or) obtain information regarding the account. A borrower can force the servicer to provide detailed information about the account by making a qualified written request. The servicer must respond within a certain period of time or it could face penalties. In Colorado, there is a state statute that closely mirrors federal law and which has penalties of its own. It must be sent to the address designated by the servicer and cannot be written on a payment coupon.

Q: What is a ‘Request for Information’?

A: A request for information’ is a request for information related to a mortgage. It is closely related to a qualified written request with the same time limits for response and the same penalties in the event of no response is received from the servicer.

Q: What lending is subject to the Real Estate Settlement Procedures Act?

A: The Real Estate Settlement Procedures Act (RESPA) is applicable to all “federally related mortgage loans,” except as provided under 12 CFR 1024.5(b) and 1024.5(d), discussed below. “Federally related mortgage loans” are defined as loans (other than temporary loans), including re-financings that satisfy the following two criteria:

First, the loan is secured by a first or subordinate lien on residential real property, located within a State, upon which either:

a one-to-four family structure is located or is to be constructed using proceeds of the loan (including individual units of condominiums and cooperatives);
a manufactured home is located or is to be constructed using proceeds of the loan.

Second, the loan falls within one of the following categories:

loans made by a lender, creditor, dealer;
loans made or insured by an agency of the federal government;
loans made in connection with a housing or urban development program administered by an agency of the federal government;
loans made and intended to be sold by the originating lender or creditor to FNMA, GNMA, or FHLMC (or its successor);
loans that are the subject of a home equity conversion mortgage or reverse mortgage issued by a lender or creditor subject to the regulation;

“Federally related mortgage loans” are also defined to include installment sales contracts, land contracts, or contracts for deeds on otherwise qualifying residential property if the contract is funded in whole or in part by proceeds of a loan made by a lender, specified federal agency, dealer or creditor subject to the regulation.

Q: What does the Real Estate Settlement Procedures Act do?

A: RESPA:

mandates full disclosure. Full disclosure of all costs and fees associated with the sale of a real estate property from (one to four units) must be made. Mortgage brokers are required to provide disclosures on standardized forms such as the GFE and the HUD settlement statement, which detail the amounts that will be credited and debited to the buyer and the seller.
prohibits kickbacks. Service providers cannot give or receive referral fees;
bans unauthorized charges. The law bans service providers from giving or accepting money for a service that wasn’t actually performed.
requires fair pricing. If costs to a homebuyer are inflated beyond what is standard, this can be a RESPA violation. Only the amount paid for third-party services may be charged to buyers.
regulates escrow accounts. RESPA prevents loan servicers from demanding excessively large escrow accounts.
requires timely responses. Answers to questions and requests for information directed to mortgage banks or their loan servicers must closely follow response time guidelines.

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