Real Estate Law

Real estate transactions are governed by a number of federal and state regulations. From advertising to commissions to foreclosures, there are specific laws that dictate what can be done, when it can be done, and who can do it. In addition to specific real estate law, these transactions also implicate contract and property law. The complex nature of real estate law requires a firm understanding of its legal and social issues. Well-versed real estate attorneys can provide assistance in a variety of situations and ensure that the transaction is valid.

Realtors

Realtors are governed by real estate law, contract and property law, and professional regulations. Remaining current on any changes in the law is imperative to represent clients adequately and reduce liability. Since the housing-market crash of 2008, there have been a number of changes to the laws that regulate the real estate market and there are even more in the pipeline. A real estate attorney can provide assistance in interpreting and complying with any current and proposed legislation that affects realtors and their businesses. If you are a realtor and would like to discuss your rights and responsibilities, contact a Phoenix real estate attorney at 480-464-1111.

Home Owners

Homeowners, especially when they sell their home themselves, are also expected to comply with the various legal standards governing real estate. Although the housing-market crash of 2008 inspired a number of individuals to buy and sell real estate without an agent, the law has not relaxed its requirements of disclosure, fair dealing, and other standards. In addition, a homeowner has specific rights in relation to real estate agents, brokers, mortgage companies, and the government. In 2009, the Home Affordable Modification Program was passed to help stabilize the housing-market and assist homeowners in retaining their homes. This is just one example of the various programs available to homeowners. Phoenix has a unique real estate environment and a real estate attorney can help a homeowner navigate through these regulations properly. If you are a homeowner and would like to discuss your rights and responsibilities, contact a Phoenix real estate attorney at 480-464-1111.

Real Estate Broker Liability & Defense

Real estate brokers are individuals who are employed by either the seller or purchaser to arrange the sale or purchase of real property. Brokers are increasingly held to higher and higher standards of care and their liability is increased with each agent they employ. When a broker is hired by a seller, he/she is agreeing to use good faith efforts to sell the real property in exchange for a commission. A listing agreement can be open, net, exclusive agency, or exclusive right to sell.

Liability

Brokers are exposed to liability in a number of different ways during a real estate transaction. Real estate brokers are under a general duty to supervise their agents and may be liable for any of their actions. This liability can include non-disclosure by the agent or the broker, misrepresentation, breach of duty, or inadequate record-keeping. Unfortunately when a real estate transaction goes wrong, the broker and real estate agent are usually the targets of a lawsuit.
By utilizing a real estate attorney, a broker can ensure that he/she is in compliance with federal and state regulations and protect professional and person property.

Defense

There are a number of defenses available to brokers. First, proper policies and procedures in place before a problem arises can help to reduce liability. By working with a real estate attorney, a broker can review internal procedures and ensure compliance. A proactive approach is always the cheapest and easiest. If a problem has already arisen, a real estate attorney can provide guidance and counsel. To discuss any legal defenses, contact a Phoenix real estate attorney at 480-464-1111.

Disclosure

Knowledge of the disclosure requirements in a real estate transaction is very important for brokers and real estate agents. When a broker or real estate agent is representing both the buyer and the seller, disclosure and consent is required by both parties. However, disclosure of any confidential information to either party requires written authorization. No matter who the broker or real estate agent is representing, there is a duty to be honest to all parties about any known facts which may materially and adversely affect the transaction. To discuss any duties of disclosure, contact a Phoenix real estate attorney at 480-464-1111.

Land Use

Arizona’s geography and history make it a very unique state with unique land use issues. Federal, state, and tribal regulatory agencies govern the use and planning of all Arizona lands. For example, the Environmental Protection Agency regulates the environmental impact of specific real estate transactions and Arizona’s Bureau of Land Management manages the approximately 12.2 million acres of public land in the state. A real estate attorney, who is familiar with all of these agencies and their regulations, can assist in navigating through all of the rules and regulations. To review some of the land use issue that may affect your real estate transaction, contact a Phoenix real estate attorney at 480-464-1111.

Zoning and Entitlements

Each city and county in Arizona has specific current and long term development goals and standards for all of the property in the state. Arizona land is zoned according to the activity that is taking place on the land. For example, a neighborhood may be zoned as single-family residential, which means a commercial building can not be built in that district. However, there are single-use as well as mixed-use zoning districts that would allow a commercial building to be built next to a residential building. Each zoning district has its own specific regulations, dealing with everything from the height of the buildings to the number of people who can occupy the house. Individuals may challenge the classification of their land through the specific agency that regulates zoning in their area. Whether you plan on challenging the zoning classification of your property or you, merely, want to review the restrictions on your property, contact a Phoenix real estate attorney at 480-464-1111.

Property Tax Valuations and Challenges

Arizona property taxes are calculated by each individual county assessor using valuation tables. These tables provide the county assessors with two methods in valuing a home: (1) replacement cost new less depreciation; and (2) sales analysis. The replacement cost new less depreciation method involves determining the cost to build or reproduce the property today and then deducting any estimated depreciation. The sales analysis is the oldest method and involves comparing the property against other similar properties to determine what the selling price per square foot would be. Both methods are used around the state. A property owner has the right to challenge the valuation of the property at any time. However, if you want the challenge to affect a specific tax year, then you have to file by a specific date. Challenging property tax valuations has become harder and harder as local governments have become hungrier for those funds. If you would like to challenge your property tax valuations and possibly save money, contact a Phoenix real estate attorney at 480-464-1111.

Commission Disputes

Commissions can be paid by either the buyer or seller in a real estate transaction to a real estate agent, a broker, or both. If there is an issue with any of the payment or division of a commission, the parties must take legal action for resolution. Commission disputes are civil actions that are not investigated by the Arizona Department of Real Estate. A commission dispute may involve:

  • Disagreements between individuals splitting the commission;
  • Individual seeking commission without a written agreement (which is required in Arizona real estate law);
  • An unlicensed individual seeking a commission; or
  • A procuring cause challenge (trying to determine which party actually procured the sale and deserves the commission)

Given the current real estate market, there is a higher propensity to dispute a commission. If you are interested in learning how to avoid commission disputes or are already involved in one, contact a Phoenix real estate attorney at 480-464-1111.

Title and Interest Disputes

A title dispute can manifest itself in a number of different ways. A dispute may arise because certain encumbrances were not discovered during a title search and the property owner now has to remove the defects in the title. An interest dispute can include an interest in an easement across a piece of property, an interest in mineral or agricultural rights, or an interest in the air over the property by another party. Whether the claims are recorded or unrecorded a quiet title claim can help to cure them. If an individual has maliciously clouded the title of a property, then an individual may file a slander of title claim and receive damages.

For both of the disputes above, Arizona real estate law allows an effected individual file a lawsuit to quiet title to determine each person’s rights to the land. A claim for quiet title is not without its risks. As with all lawsuits, winning is not guaranteed and the person initiating the lawsuit may be required to pay the costs of defending against the claim. However, there are ways to avoid these costs. Assistance from a Phoenix real estate attorney can help to ensure that your claims are as handled efficiently and properly. Call our Phoenix real estate attorneys at 480-464-1111.

Title Company and Liability Defense

Homeowners

A title company is responsible for searching any real estate records of a property to determine the legal rights of the owner; reveal any easements or restrictions on the property; and disclose any outstanding mortgages or liens.  The title company will outline all of the restrictions on the property that need to be addressed before the property can be sold to another person.  The title company will then correct any of the problems and notify all of the parties of the various costs.  Once the parties have decided to close, the title company will collect the money and pay all of the expenses associated with curing any of the problems found in the initial search and then file the appropriate paperwork.  It is obvious that if the above process is done incorrectly, that a property owner can be significantly affected.

A title company may be liable to a buyer, seller, or both if the title search process was done incorrectly and failed to reveal any defects.  Especially with the influx of foreclosure sales and short transaction times, a buyer may be tempted to rely only on a Preliminary Title Report prior to purchasing property.  However, Arizona real estate law states that a title company is not liable to a buyer, who relies only on the Preliminary Title Report, but may be liable for failing to discover liens, claims of title, or mismanagement of funds.  If you would like assistance in determining whether your title company has fulfilled its duty or need assistance in initiating a claim of quiet title, contact a Phoenix real estate attorney at 480-464-1111.

Title Companies

A title company may be liable to a buyer, seller, or both if the title search process was done incorrectly and failed to reveal any defects. Especially with the influx of foreclosure sales and short transaction times, a buyer may be tempted to rely only on a Preliminary Title Report prior to purchasing property. However, Arizona real estate law states that a title company is not liable to a buyer, who relies only on the Preliminary Title Report, but may be liable for failing to discover liens, claims of title, or mismanagement of funds. If you are concerned about a claim against your company by a buyer or seller, contact a Phoenix real estate attorney at 480-464-1111 to discuss your possible defenses.

Boundary & Easement Disputes

With the explosion of real estate in Phoenix, it is highly likely that boundaries may be unclear and neighbors may argue over where a boundary begins and ends. These disputes become even more contentious when one neighbor has invested a lot of money in a fence or building along a disputed boundary. In addition, the very nature of an easement across one person’s property for the benefit of another person is inherently contentious. Individuals may argue over who maintains the easement or what it can actually be used for or where it is located or even if it exists. In order to discuss your rights and review the procedures for determine where an easement or boundary is located, contact a Phoenix real estate attorney at 480-464-1111.

Construction Defects

With the housing market finally seeing some positive growth, Arizona’s construction projects are increasing across the state. A spike in 2012 saw the highest number of building permits in four years. As with any project, it is inevitable that there will be mistakes in the manufacture of buildings in Phoenix. Unfortunately, some of these mistakes can affect the property owner’s enjoyment of the property, reduce the property’s value, or put the property owner at risk of incurring liability through accidents. To discuss any construction defects in your property or to defend against a claim of construction defects, contact a Phoenix real estate attorney at 480-464-1111.

Easements

An easement is the right of one individual to use the property of another individual for a limited purpose (i.e. right of way, utilities, etc.). Easements can be expressly agreed upon by two parties or they can be implied in any prior use or necessity. If two property owners use an easement, both parties may be liable for its maintenance. A dispute about an easement can also include the easement’s location and the granted purpose. Unfortunately some easements may exist, but may not be recorded in any official office. Property buyers and sellers should attempt to review the officially recorded easements and the unofficial easements. If you need help in establishing your rights to an easement or if you are a property owner and would like to defend your property against an easement, contact a Phoenix real estate attorney at 480-464-1111.

Eminent Domain

According to the U.S. Constitution, the government can take private property but only if it is for “public use” and for “just compensation.” Recently, the U.S. Supreme Court has given the government substantial leeway in defining public use to include economically beneficial uses. Because this definition has been expanded to include almost every activity, besides blatant misuse, property owners are constantly at risk of losing their property to eminent domain. Fortunately, the state of Arizona has provided additional protections for its citizens in the Arizona Constitution. Private property in Arizona can only be taken for specific reasons, such as private ways or necessity or agricultural and mining purposes. In addition, the Arizona Legislature has tightened the definition of “blighted” to ensure further protection for property owners. If you feel like your property is at risk and you want to stop the condemnation process or ensure that you are justly compensated, contact a Phoenix real estate attorney at 480-464-1111.

Foreclosures/Trustee Sales

A foreclosure/trustee sale occurs when an original property owner cannot make the mortgage payments on a property, the loan provider seizes the property, and it is sold. The process includes a certain number of missed payments before a Notice of Default is recorded at the County Recorder’s Office. The original property owner will receive notice of foreclosure and will still have time to correct the default. If the original property owner does not bring the loan current, a foreclosure sale is scheduled and the original property owner will receive a Notice of Sale. The foreclosure/trustee sale is usually in the form of an auction and the property is sold to the highest bidder, who must pay in cash. Arizona real estate law allows both judicial and nonjudicial foreclosures; it simply depends upon whether there is a power of sale clause in the deed of trust or mortgage contracts. This process can be difficult and complex, especially for an individual who is not aware of the rights and responsibilities during a foreclosure proceeding. If you are in the process of foreclosure or are looking to purchase a foreclosed property, contact a Phoenix real estate attorney at 480-464-1111.

Short Sales

A short sale is an alternative to foreclosure. It occurs when a property owner owes more on the property than it is worth and the lender allows the property owner to sell the property for less than what is owed on the mortgage balance. The benefits of a short sale process versus a foreclosure are that the process is much shorter and easier, it may not be as damaging to a property owner’s credit, and the property owner may still be able to purchase property in the future. In order to qualify for a short sale you must:

  • Have a financial hardship – some kind of verifiable reason why you can’t pay your mortgage;
  • Insolvency – you do not have any liquid assets; and
  • A monthly shortfall – your income does not cover your bills and your mortgage.

The federal government has developed programs through HAFA that encourages foreclosure alternatives, like short sales. Through structured time-frames, cash incentives for lenders and homeowners, and anti-deficiency requirements, HAFA facilitates short-sales in Arizona. There are additional qualifications necessary for a HAFA short-sale. If you are having trouble paying your mortgage or if you are a lender and would like to learn more about short-sales, contact a Phoenix real estate attorney at 480-464-1111.

Loan Modifications

A loan modification is a change in a property owner’s mortgage terms and, usually, results in more affordable payments for the property owner. Due to the millions of foreclosures in the U.S. over the last five years, the federal government has instituted a number of programs that are aimed at helping property owners keep their property. One such program, Making Homes Affordable, offers incentives to loan providers to help property owners modify their loans and retain their property. In order to qualify for the Making Homes Affordable Loan Modification program, a property owner must:

  • Have mortgage payments that exceed 31% of gross monthly income
  • Loan was taken out before Jan. 1, 2009
  • Must live on the property, that is being modified

Although navigating through the negotiation process with a lender can be difficult and time-consuming, it can also be very beneficial to a property owner. By allowing a property owner to retain the property and modify the terms of the loan, the property owner can salvage any credit ratings, get a better interest rate, or even waive penalty fees. If you are facing a foreclosure or are having trouble paying your mortgage, contact a Phoenix real estate attorney to discuss your options at 480-464-1111.

Deficiency Defense

A deficiency occurs when a property is sold, either through foreclosure or short-sale, for less than what was on the mortgage balance. The original loan provider can, under certain circumstances, sue the property owner for the remainder on the loan. Arizona real estate law may provide protection for some property owners through an anti-deficiency statute. Arizona’s anti-deficiency statute applies to residential mortgages and may protect a homeowner from a loan provider suing for the remainder on the loan. However, individuals who own property that is not being used as a residence or does not fulfill some of the requirements of the statute, may not have the protection of the anti-deficiency statute. These property owners, which may include any guarantors on the loan, may be liable. In addition, Arizona real estate law provides that the lender may only sue the property owner for the difference between the remainder on the loan and either: (1) the sale price at foreclosure or (2) fair market value for the property. This information can be important during the negotiation process prior to a foreclosure or after a foreclosure. To discuss your options before or after a foreclosure, contact a Phoenix real estate attorney at 480-464-1111.

Residential & Commercial Landlord/Tenant Issues

Landlord

Arizona landlord tenant law governs the rights and responsibilities of each party in a rental/leasing transaction. Landlord tenant law lays out the minimum standards for all landlords in maintaining the rental property and interacting with tenants. There is a general duty of good faith in all transactions and none of the tenant’s rights and remedies in the act can be waived in a rental agreement. The Arizona Landlord Tenant Act also imposes a duty on tenants to use the rental property in a safe and sanitary manner. A tenant must follow the guidelines of the rental agreement, including paying the rent, consenting to reasonable entry by a landlord for maintenance and inspection, and vacating the property in the event of an eviction. A lawful eviction, or Forcible Detainer, of a tenant must include notice, a chance to cure the defect, and a specific amount of time. Without these elements, a landlord could be liable for damages. If a tenant requests a copy of the Arizona Landlord Tenant Act, a landlord must provide it. For further explanation of the duties of a residential landlord or to make sure you are in compliance with Arizona real estate law, contact a Phoenix real estate attorney at 480-464-1111.

Tenant

Arizona landlord tenant law governs the rights and responsibilities of each party in a rental/leasing transaction. All Arizona landlords are required to maintain a safe and healthy property and follow specific procedures when evicting a tenant. If a tenant is unlawfully evicted or the premises are not maintained, the tenant may terminate the rental agreement or move back into the property and receive money damages. Specifically, a tenant may be able to receive money damages if the tenant was evicted after a foreclosure and the landlord did not provide notice of the foreclosure. If a tenant requests a copy of the Arizona Landlord Tenant Act, a tenant must provide it. If you would like to discuss your rights as a tenant, contact a Phoenix real estate attorney at 480-464-1111.

Mechanic’s and Materialman’s Liens

A mechanic’s or materialman’s lien allows an individual, who provides services or materials, to put a lien on the property that the services and materials were used for. In order to have a valid mechanic’s or materialman’s lien, the individual must be licensed with the Arizona Registrar of Contractors or be a company that provided the material. In addition, the lien must be filed with the County Recorder and notice must be served on the owner of the property within 20 days of providing the service or materials. Any foreclosure suit must be filed within six months of the recording date or the lien will expire. The foreclosure process includes filing a claim with the court, filing a Notice of Lis Pendens, awaiting approval from a judge to foreclose, and selling the property. Obviously, there are a number of specific requirements in order to secure, retain, and possibly enforce a mechanic’s and materialman’s lien and many of these liens are found to be invalid for lack of compliance. If you are a service provider or a property owner and would like to discuss the implications of a mechanic’s or materialman’s lien, contact an Arizona real estate attorney at 480-464-1111.

Quiet Title

An action to quiet title is a civil remedy where a property owner seeks to remove any clouds on a piece of property’s title. It can be used to compel an ejectment, determine any rights or liens on the property, compel an adverse party to file any appropriate records, or obtain land sold at a judicial auction. There are specific limitations on when and where you can file an action to quiet title. In order to file an action to quiet title, contact an Arizona real estate attorney at 480-464-1111.

Appraisal Administrative Proceedings

When a real estate appraiser is accused of violating state statutes, regulations, or standards for appraisals, they are called to an administrative disciplinary hearing before the Arizona Board of Appraisals to respond to complaints and the agency’s inquiries and examinations. When licensed professionals are involved in disciplinary hearings, they risk the possibility of having their licenses suspended or revoked. However, with the guidance and protection of an Arizona real estate attorney, appraisers may appear before the agency with a prepared defense. Our lawyers have experience successfully defending appraisers before the Arizona Board of Appraisals and will protect your career and ensure that your license is preserved. To learn more about securing legal representation for a real estate administrative hearing, contact a Phoenix administrative defense lawyer at (480) 448-2870.

Forcible Entry and Detainer / Evictions

Forcible Entry and Detainer actions (“evictions”) are used by landlords to remove tenants, who have not left a property after receiving an eviction notice – usually 5-7 days. The action allows the landlord to appeal to the court to assist in removing a holdover tenant. If the court decides that the tenant is possessing the property illegally, they will be found guilty of forcible entry and detainer and ordered to vacate the property. If the tenant still does not vacate, the Sheriff can forcibly evict the tenants and their personal property. Landlords are not allowed to utilize any “self help” tactics in removing the tenant, such as changing the locks or turning off utilities. Therefore, utilizing the proper procedures is imperative. Arizona real estate law has different requirements for a residential and nonresidential forcible entry and detainer actions. If you are a property owner and would like to learn more about evictions or if you are a tenant and feel you have been improperly evicted, contact a Phoenix real estate attorney at 480-464-1111.

Condemnation

Condemnation is the process that the government uses to take an individual’s property for public use. The government will first announce which properties are affected by a particular project. At that point, many individuals hire a Phoenix real estate attorney. The government will then inspect the property, assign it a value, and then deliver an offer to the property owner. If the individual has hired an attorney, the attorney will review the offer, order another independent appraisal, and begin negotiating. Once the owner accepts an offer, the deed is transferred, and the proceeding is finished. However, if the attorney has determined that the use of the proposed project is not for public use, the attorney may recommend the property owner file a suit to enjoin the condemnation process. A property owner may also have a claim for additional damages that arose from any eminent domain proceedings. If you feel like your property is at risk and you want to stop the condemnation process or ensure that you are justly compensated, contact a Phoenix real estate attorney at 480-464-1111.

Mediation-Arbitration

Mediation proceedings include the two disputing parties and a disinterested third party mediator. The mediator’s job is to assist the parties in developing their own creative solution to their dispute. Mediation proceedings are non-binding and allow the parties to discuss issues and solutions that are not available in a trial setting. Arbitration proceedings are the next step above mediation. An arbitration proceeding includes the two disputing parties and an “acting judge” or arbiter. Arbitration proceedings can be binding or non-binding. The rules of evidence are relaxed and the parties are also free to develop creative solutions. However, unlike the mediation process, the arbiter is not involved in the negotiation/settlement process. Because the outcome at trial can never fully be predicted, mediation and arbitration give parties the opportunity to control their own future, with the added benefit of saving a lot of money. If you are interested in resolving your dispute through one of these beneficial methods, contact a Phoenix real estate attorney at 480-464-1111.

Commercial Leases

A commercial lease is an agreement between a landlord and a tenant for nonresidential use of a property. Commercial leases differ from residential leases in that there are fewer protections for the tenants, no standard forms, the terms are usually long-term, and there is more flexibility in negotiating. A commercial lease agreement should define what is being leased; whether it is a gross or net lease; the rental rate; who is responsible for maintenance; the approved activities for the property; and possibilities for additions and improvements to the property. Because there is so much money at stake, a commercial lease needs to be clear and carefully drafted. If you are a commercial landlord or tenant and would like a Phoenix real estate attorney to review and discuss your lease agreement, call 480-464-1111.