Bergmann Law LLC

Complex issues, simplified

Blog

But I Have a Realtor, Do I Really Need An Attorney?

Posted by on in Blog PostsLeave a comment

 

Every real estate transaction is different and the simple answer is: it depends. For example, in South Jersey, real estate transactions are conducted much differently than in North Jersey. So the first question is, where is the property located? If the Seller is a Giants or Jets fan, you should probably have an attorney. Eagles fans, or in other words, properties located below New Jersey Route 195 are divided on the need for representation. So for you Eagles fans out there, let’s take a look at the options:

For the Buyers:
-Is the property a distress, bank owned or short sale?
-Is the property part of an estate sale?
-Is it a commercial property?
-Is there something about the property that leaves you uneasy such as potential structural issues?
-Is it a shore property with new FEMA maps under consideration or an area you simply are not familiar with?
-Are you an out-of-town buyer?

For the Sellers:
-Are you selling a property in distress?
-Are you selling a property left to you in an estate?
-Is your co-owner no longer on speaking terms with you?
-Do you know something about the property that you are unsure how to disclose?

It should become much clearer to you now when you should hire an attorney to close your real estate deal because if you answered yes to any of the above questions, then hiring an attorney to guide you through the process would be prudent. If none of those situations apply to you, then you are probably fine to use your Realtor’s knowledge and expertise to take you through to closing. As part of a Realtor’s New Jersey licensing education they are taught the real estate contracts used within the state, and New Jersey also provides you with a three-day “attorney review period” should you change your mind, and decide to hire counsel. New Jersey also requires continuing education courses for licensed Realtors and/or certifications on subjects such as ethics, buyer’s agency, distressed property sales, etc. These measures are in place to protect all parties, buyers, sellers as well as agents. Finally, if your Realtor is acting as a disclosed dual agent, and happens to be the agent that brought the Buyer to your sale (or vice versa), it is also a good idea to consider representation. The minimal fee an attorney charges for what is typically the largest transaction in a consumer’s life, is well worth the protection of hiring an advocate whose only duty of loyalty it to you.

But what if you are selling a distressed property and you decide you need counsel. Your neighbor’s nephew is an attorney and looking for business, so maybe you should just hire her – at a minimal fee – or better yet – she may do it for free!

Of course you can hire whomever you like, but remember if you think you need an attorney for your transaction, it is probably best to hire someone with experience in that particular area of law. I have seen relatively uneventful transactions turn into not only blown up deals, but litigation where “Aunt Nancy” the criminal attorney doing a favor for her nephew makes unreasonable changes to the contract pushing the seller to cancel the deal. Or worse, when “my friend the divorce attorney” puts together the sale of his long-time friend’s commercial property – and doesn’t properly address environmental issues resulting in years of litigation. A penny saved is not always a penny earned.

Hiring a real estate attorney when needed is a smart choice. Their mission is to negotiate to make this transaction come together in a peaceful manner that is fair and amenable to both sides. A real estate attorney takes over after the selling price and terms have been established by the Realtors in the contract and all parties have signed off. He will review the contract itself, negotiate repairs based on the home inspection report, and collaborate with the title company. He will also be with you at settlement along with your Realtor and usually your mortgage broker. Think of these people, all working for you and in your best interest.
Finally, hiring a real estate attorney can typically cost from $800 – $1,000 depending on the transaction. For the die hard bargain shoppers, we are probably not a good match and I most sincerely wish you all the best. Maybe things will go smoothly and maybe they won’t, but the purchase or sale of real estate is a significant transaction that I do not recommend you enter into without experienced guidance.

The New Jersey Security Deposit Act is Not a Suggestion – It’s The Law

Posted by on in Blog PostsLeave a comment

 

Landlords know the importance of the security deposit, which is typically 1 and ½ times the monthly rent collected at the beginning of their tenancy and returned based upon the condition of the property when the tenants move out. However New Jersey has very specific requirements for handling security deposit funds.

For example, within 30 days of receiving the security deposit the landlord much notify a tenant in writing the name of the institution holding the funds. There are two places where a landlord may keep a deposit: in a Money Market Fund in compliance with the specific state regulations or an Interest- Bearing Bank Account. If they choose the latter, a landlord is required to write to the tenant annually and inform them of the amount of interest accrued as the accrued interest belongs to the tenant. If a landlord decides to move the security deposit to a different institution he or she is required to notify the tenant, in writing, within 30 days of doing so.

Additionally, if a landlord sells the property they must inform the tenant, in writing, within 30 days of the transfer of ownership. Once a tenant has moved out or their lease is terminated the security deposit must be returned within 30 days of either event, including all interest.

Security deposits may only be utilized by the landlord once a tenant has moved from the property and only if rent is outstanding and/or there is property damage above and beyond normal wear and tear. Any such deductions must be clearly itemized and sent to the tenant in writing within 30 days of the date they vacated the property.

A landlord’s failure to comply with these stringent regulations provides the tenant with powerful remedies. As a landlord, protect yourself and follow the rules.

How to Keep Peace In The Family Shore House

Posted by on in Blog PostsLeave a comment

 

Summers at the shore are the stuff of fairytales here in South Jersey.  Everyone has memories created at Grandma’s place in [insert your favorite shore town here].  Debates rage about which town has the best beach, pizza, and boardwalk.

But alongside nostalgic considerations, the value of beach properties have skyrocketed and Hurricane Sandy further hastened the turnover from blue collar owners with simple bungalows to multimillion dollar homes and multi-unit rental properties.

So deciding to buy a place of your own with your extended family rather than rent the same old place for a couple of weeks it seems to be a sound decision, right?

Maybe, but consider a few things first. Real estate is a significant investment.  You need to consider more than proximity to your favorite beach. As an owner it is also your responsibility to consider any number of things, but the big two are costs and property use.

Costs

What are the insurance needs of the property? How will they be divided? How will household expenses, things like cleaning, landscaping and upkeep, be paid for? Who pays the bills every month? How will they collect the money from the rest of the property owners?

Property use

Is it exclusively a family home or is a part-time rental? Who will use the property? When will they use it? What happens when ownership changes occur? What if someone dies, gets divorces, cannot afford their share of the expenses, or moves away and no longer wants their share? What is I become estranged from the family and want out 5 years from now?

Things may be rosy now, but there will be disputes whether it be over how often the grass should be cut or that someone is not paying their share of the mortgage. So what to do?

Sometimes the vacation home fairytales quickly and easily become expensive, emotional nightmares.  There is nothing that will rip a family apart like a real estate dispute.

So should you head for the hills when your family has a chance to buy your favorite rental property?  Of course not!  But be realistic, and do it right from the beginning.

Most every scenario for a dispute can be anticipated.  The best way to deal with any dispute is to approach it head-on and be up-front.  Sit down with the family, yes all of them, and talk it through.  Sometimes it’s best to have a dictator pay the bills and make the day-to-day decisions, but elect that person as a group.  Play out the scenario of your Mom and Dad divorcing – who gets to use the house?  Or your brother’s wife wants to have her family use the property as well every weekend. Talk everything out and nobody will be surprised if a situation arises naturally. A Joint Ownership Agreement should be discussed, agreed upon, and signed when the property is first purchased. With a Joint Ownership Agreement all terms of use, financial obligations and transfer scenarios can be discussed and agreed upon in advance.  Agreeing on the big issues ahead of time leaves you and future generations to simply enjoy the sun and sand.