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The Attorney’s Role in Real Estate Transactions: Part I


In this article, we touch on the role of an attorney-at-law in real estate transactions, particularly on the buyer’s side.


When purchasing property, whether through a private sale, auction, or even through a government entity, chances are you may require the services of an attorney to assist with completing the transaction. Attorneys play an important role in this regard, and their primary duty is to look after their clients’ best interests.


Let’s say you have saved enough money to pay down on a house or a piece of land and you have identified a property that captures your interest. Your real estate agent advises that there have been several enquiries about the property and it’s likely to go very quickly. You’re then encouraged to sign a sale or reservation agreement and pay a deposit to secure the property.


Despite how eager you may be to do so, you should first seek the services of an attorney for legal support. This is so regardless of whether the seller may have already engaged an attorney, as it is unlikely that the seller’s attorney can adequately represent both your interests, especially in circumstances of a conflict.


An agreement for sale is what binds the parties to the transaction and generally sets out, among other things, the rights, duties, and obligations of each party. Although it is usually drafted by the seller’s attorney, it is vetted by the buyer’s attorney who ensures that its terms are appropriate based on the buyer’s particular circumstances.


If, for example, you will be purchasing property through a mortgage facility, your attorney would have a ‘Subject to Mortgage’ clause included in the agreement. This ensures that your deposit would be fully refundable if you are ultimately unable to secure a mortgage to complete the purchase. Without such a clause, the seller may, in certain circumstances, be entitled to forfeit your deposit if the sale is cancelled.


Before giving you the green light to sign the sale agreement, your attorney may seek to investigate a few things:


Boundaries

Whether purchasing cash or through a mortgage, you would likely be encouraged by your attorney to obtain a licensed surveyor’s report. The surveyor’s report would disclose whether there are any encroachments on the property or breaches of any restrictive covenants which relate to it. In either case, your attorney may consider negotiating a reduction of the purchase price, if appropriate, or retaining a reasonable portion of it pending the rectification of any issues.


The Land Register

The buyer’s attorney would usually inspect the Land Register to investigate the seller’s title. This would reveal whether the seller has good title to transfer or whether there are any encumbrances or other relevant notations registered against the property. These may include, for instance, mortgages, charges, leases, easements, cautions, and/or restrictions. These notations generally mean that some other person may have an overriding interest in the property.


The sale agreement usually requires the seller to transfer the property free of all encumbrances. The seller must therefore take all the necessary steps to ensure any encumbrances are removed on or before completion. Depending on the nature and number of the encumbrances the seller may seek to negotiate a longer period for completion. Bear in mind, however, that some encumbrances such as cautions, and restrictions tend to cast doubt on whether the property is fit for purchase.


State and Condition of the Premises

The seller has no duty to make any disclosures concerning the state and condition of the property. The buyer must therefore make enquires before signing the contract. An inspection of the property is usually advisable. In any event, the buyer’s attorney may require that the sale is made subject to a satisfactory structural engineer’s report.


Existing Tenancies

If the property you’re eyeing has a tenant, you may either wish to continue the tenancy or insist on vacant possession upon completion. In the latter case, a term to that effect would be provided in the agreement and it places the burden on the seller to ensure the tenant moves out before ownership is transferred. Otherwise, you may face an undesirable situation of having to deal with getting out a difficult tenant-turned-squatter.


These considerations are by no means exhaustive, as several other factors would guide your attorney’s approach to the sale. Ultimately, as stated before, the aim is to look after your best interests. Indeed, purchasing property is perhaps one of the largest investments you will ever make. The last thing you should want to do is enter into such a transaction without the benefit of legal advice.


Stapleton Chambers is a full-service Law firm in Antigua & Barbuda with expertise in a wide range of civil and commercial matters. Should you require any further information, you may contact us at info@stapletonchambers.com or (268)562-7185. This article is for informational purposes only and does not constitute legal advice.

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