This is the second of a series entitled: "When you don't need a lawyer."
Why is a lawyer writing – again -- to tell you when you don't need to hire a lawyer? Because it's a question that many potential clients ask themselves all the time, and one that I frequently answer. This is the second in a series of articles that will hopefully guide you as I frequently guide my clients.
Residential Home Purchase -- No, you don't need a lawyer.
We get many calls from clients and potential clients asking if they can hire us to either review a real estate contract or attend closing with them. Most of the time, I first determine whether the client needs a lawyer at all. If the transaction is a residential real estate sale located in Maryland, and if the client has a real estate agent, I generally tell the client that they do not need a lawyer to review the contract or attend closing. The exception would be if there are significant title issues or other potential disputes that have come up or that may arise at closing. In those cases, a client may want to have a lawyer involved.
New Home Purchase – You may or may not need a lawyer.
If the contract is for the purchase of a newly constructed home, there may be more of a reason to have a lawyer review the contract. I generally warn clients that builder contracts are overly burdensome for the purchaser, and that any contract should be reviewed very closely by either the buyer's own real estate agent (one not affiliated with the builder), or by a lawyer. Many times, clients are so excited about the idea of building their own home, they do not see the pitfalls of the contract. One trap is that a person purchasing a newly constructed home many times has no idea how the home will be sited on the lot when it is built. Builder contracts typically give the builder free reign when it comes to siting a house on a lot. Another problem is that most builder contracts do not have a date on which the construction is required to be done. Many contracts give the builder a lot of leeway regarding the amount of time it can take to finish the home. If the builder encounters delays, a buyer can be left stranded with no place to live and with their deposit money tied up. A savvy buyer or a lawyer should negotiate terms that ensure that the buyer is protected should extraordinary delays happen.
Residential Contract of Sale Already Signed and a Problem is Discovered – You should probably have a lawyer.
Sometimes clients come to me after having already signed a purchase contract asking if they can “get out” of it. Most of the time, the buyer is not able to get out of the contract, although there are certainly exceptions. Any situation where a buyer wants to get out of a contract should be reviewed by a lawyer. Also, many times a buyer will have questions after a newly constructed home is finished, but before they are set to close. It is usually at that time when the buyer realizes the leeway that the builder had during construction and many times the buyer is not desirous of furthering the purchase. Again, it is very difficult to get out of a contract once a contract has been signed, but many times if there are significant differences between the contract and what was built, the purchaser is able to negotiate with the builder to either have changes made or other consideration made to account for the differences. In those cases, a lawyer can be of great assistance.
Closing Has Occurred – Yes, talk to a lawyer!
After the closing, problems frequently arise or are noticed as a result of having lived in the home for a while. A common occurrence is that a buyer will experience water infiltration in their basement or garage and believes that the seller made misrepresentations regarding the condition of the home. If a buyer believes misrepresentations have been made, a buyer should seek the services of a lawyer to guide the buyer through the legal options. Even if a lawyer believes a claim is present, virtually all standard real estate contracts require the parties to mediate any dispute before any claim is made in court. I typically advise buyers in those situations to mediate on their own and to hire a lawyer if the dispute is not resolved.