Real Estate Issues

Purchasing a House/Condominium

Of course, there are considerations which are not legal in nature, but which are most important: location, cost in comparison to other neighboring properties, taxes, insurance, schools, churches and shopping, monthly total bills including principle, interest, taxes & insurance (PITI), but also upkeep (which is more in an older home), utilities, capitalized costs (such as a new roof that may not be needed for a few years) and other costs.

Generally, if the location and style of the house is to your liking, there is an old saying that the only mistake you can make is to pay too much. If the price is in line with the neighboring properties, some ways you might pay too much are as follows:

a) The house is not in the condition it appears to be in.

Keys to checking this out are the Seller's disclosure (in which sometimes the Seller will leave hints as to past problems), an inspection by an independent, qualified, home inspector, and other things which can be suggested by your Attorney. The inspector should be a person who is not beholden to any party besides you, and therefore not afraid to "kill the deal" if there really is a problem. With your inspection and disclosure in hand, your Attorney can assist you in further investigation, unless you have signed a contract that does not let you do so. It is thus usually wise to involve an Attorney initially to make sure that you do not restrict yourself from protecting your interests.

b) There are legal problems with the Title.

Most of these will be picked up by a Title Insurance Company, which is highly recommended. After all, if the one selling you a house does not really own it, or owes the United States government $250,000.00 and they have a lien on your house, you will need some place to turn to.

Sometimes, though, a Title company will pick up some things on its report that you need to know whether you must object to. This is where an Attorney comes in.

c) There are legal problems with the Closing.

Most of these problems will be resolved if you have a Title company take care of the escrow and handle the money. If this is a For Sale By Owner, and a broker is not involved, special care as to what is going to occur must be taken.

d) The house is subject to negative outside influences.

Perhaps your dream home is in the path of an airport expansion, or a rendering plant, or it has been subject to repeated flooding, or notorious prior acts (Think of the movies about Amityville, or "Poltergeist", or Bob Berdella) in the past, which would lower its value.

Real Estate Contracts

In most states, a real estate contract which is not writing cannot be enforced. It is important to remember that, as has often been stated by the great construction law lawyer Overton Currie, not only is important what you put in the contract but what you don't put in the contract. Not only is it important that you say what you're going to do, but you say what you're not going to do.

A. Form Contracts: often, a form contract will be presented to you by a broker (if one is involved) or may be obtained from a stationary store. What you must keep in mind is these forms are generally designed to meet both the expectations of the buyer and the seller, but since you are not the buyer and the seller some of these may be things you don't want in there. Further, some of the provisions that you do want in there such as periods of inspection conditions, are subject to modification. Often, contracts are simply signed by both parties, and there is no hitch. But if you're putting one hundred or two hundred or even three hundred thousand dollars of your own money into a piece of property, some of these provisions can bear a bit of inspection, especially concerning condition of the home, inspection, rejection or repair.

Adverse Possession

Even if you have purchased a piece of property, and a title company has indicated the dimensions of the lot, there may sometimes be a problem or boundary dispute with a neighbor as to who actually owns some of what you thought was your property. That is, if your neighbor has taken certain actions with regard to your property or prescribed period of time, and can prove that, he may have an issue which court would resolve in his favor as to his ownership of that strip of your land. This is also something that should be looked into before buying a piece of property; that is if your inspection of the piece of property shows that someone else has taken some sort of activity on the piece of property which you are proposing to buy, it would be worth looking into. The kind of activity that might lead one to suspect an issue of adverse possession, would include such things as fencing on your side of the line; a tree line inside your line; evidence of extension of someone's pond or other water inside your line; evidence of someone having taken care of property inside your line. The specifics vary from state to state, and vary depending on the facts.

Easements

An easement generally is defined as an interest in a land on the part of one person to use another's real estate for either a general or particular purpose. For example, if you buy a rear piece of property, and the seller gives you a twenty foot strip to your rear piece of property from the road for your use only (he retains ownership) this is an easement. Easements can also be exclusive or not exclusive, separate from the piece of property its serving or not separate from the piece of property its serving with the easement apparent or implied. An easement can also be permanent or for a period of years; for any sort of use or for a particular type of use. The same general concept applies to party walls.

Foreclosure- Missouri

The foreclosure process in Missouri is quite different from that in Kansas. Missouri is what's called a Deed of Trust state, which grants a security interest (sort of like holding a title to a car) in real estate. The standard deed of trust in Missouri always contains terms authorizing a sale of the real estate described in the deed of trust in the event there is some default. Thus the holder of the deed of trust does not have to go to court or file any court action, but merely follows with the deed of trust, note and the statutes say. This generally means that a note is given by that notice of default is given, generally by certified mail, that the note is accelerated (this means that although you're paying $60,000.00 over twenty years, the holder of the deed of note now wants all the $60,000.00). Correspondence indicating default generally also tell what action you can take to cure the breach, a date by which the breach must be cured (for example, you must pay three back payments, plus interest, plus attorney's fees plus costs) and that if you don't do this they are going to sell your property. Missouri law requires that a notice of sale be published, generally in the daily newspaper. There can be defenses to a foreclosure most of which are set out in statute.

Partition

Partition is a division between individuals of real property which they own as joint tenants or as tenants in common into separate entities. If they do this themselves, this separation is voluntarily. If it cannot be agreed on then either party can file an action in the court asking the judge to do so. Partition can end up with one party signing another a deed, both parties being ordered to sell the property and split the proceeds or other remedy.

Mechanic's Liens

This is an area in law which continues to trap unwary home purchasers and persons who are building houses with a general contractor. The gist of a mechanic's lien is that the legislature has provided for people who do work on houses a way to, in essence, guarantee getting paid if the person who hires them out does not pay them. In the ordinary circumstance, if you the homeowner have hired someone to roof on, you will know full well if you have not paid him. If, however, you have hired a contractor to build a house for you and that contractor has not paid the roofer, you may not know this when you issue your check to the contractor. The law requires that a contractor give a notice to the owner that failure by that contractor to pay his subcontractors may subject the owner to multiple claims. Unfortunately, this law is not always followed, and even when it is, many homeowners do not know what to do. If a homeowner has paid a general contractor who has not paid the subcontractor, the subcontractor will generally let the owner by serving a notice upon the owner of an intent to file a lien. Unfortunately, by this time, if the owner has paid a subcontractor, its too late to avoid a legal battle.

Condemnation (Eminent Domain)

The definition of condemnation is a forced or compelled sale. The government, both the United States and the States have power to take private property and have allowed other subsidiaries to do the same thing. For example, cities, counties, conservation commissions, departments of transportation, park boards, colleges, universities, public buildings, public service corporations, urban redevelopment corporations, railroad, water companies, power companies, telephone, telegraph companies and pipeline companies all generally have the right to take a person's property without that person's consent provided, some public use which requires its taking. The other requirement is that just compensation be paid. The private property owner can generally do very little about determining whether or not say, Department of Transportation wants to widen the road in front of your property. There are on occasion cases which prevent a condemnor (or entity which has the right to condemn your land) has occasionally been stopped by the courts from doing what they want to do, but the odds are very much against it. About all the property owner can do, is either

In a separate section called Inverse Condemnation there will be a discussion of situations wherein the condemnor doesn't tell you they are going to take it, and may not in fact think it has taken your property. Most states require a condemnor, once it has determined it needs your property for a public purpose, to determine what the just compensation is for your property, by means of an assessment or appraisal, and to make an offer to you. If you refuse this offer, the condemnor has the right to file an action in the courts (in the circuit court in Missouri and the state district court in Kansas or in the United States District Court in either state) asking for that court to declare the portion of your property that the condemnor needs to be in the actual possession of the condemnor. As part of the process, and before the actual possession of the land can be transferred to the condemnor, the court will appoint persons to go out and determine the damages. In Missouri they are called commissioners, in Kansas, they are called appraisers. Its important to not get confused on the Kansas side with the appraisers appointed by the court and the appraiser that the condemnor might hire or that you might hire. These appraisers will be named by the court, will meet to discuss what the value is of what's being taken by the condemnor, will probably wish to discuss the taking (the taking refers to the piece of property which is removed from your previous ownership by the condemnor; sometimes there is a complete taking, which means the condemnor has taken all of your property), will probably visit the sight, will come up with a number for the value of your loss and give that number to the court, which will then give copies to you and the condemnor. The clerk will notify the owners that the commissioners have filed the report. In some states its not necessary that the notice specify the amount which has been awarded. After the court has filed, the condemnor may elect to pay the amount of the award in the register of the court at which time actual title passes to the condemnor for that piece of property being taken and the condemnor may thus take possession of the property and build its road or put in its sewer or whatever its purpose is. This payment by the condemnor may simply be viewed as a down payment. That is, the property owner may end up getting more or less than that amount and one of the two parties may end of paying interest to the other. The final determination, if such a right is preserved, is by a jury which will listen to the arguments of the parties, and their witnesses, condemnation is an interesting area of the law, which has its own rules, its own procedure, and its own methods and body of evidence. Unlike most kinds of damage cases where, for example, your car is hit by another car at a stop sign or at an intersection, you can go out and take a look at the dents, in the condemnation case, all that's filed is a petition with a map which will say how much of a slice of a piece of property is being taken, the owner has to look at that map and determine not only what he has lost by way of actual property, but what damages there are to what's left over. Let's take the example of a building lot. Suppose you live in the country and you have no sewers. Suppose further that you have a 2.1 acre building lot which has been valued at $100,000.00. If the condemnor needs to take .2 acres, it is pretty easy to figure out that, if two acres is worth a $100,000.00 then .2 is worth about $10,000.00. But if you through in the fact that a minimum of .2 acres is needed to build on in order to get a permit based on the minimum requirement of land need for a septic tank, your 1.9 acres is now not a building lot, but someone else's extra large front yard. The damages might be $70,000.00 or $80,000.00 or $90,000.00. Other consequential effects can be restrictions in access, zoning impact, problems of grading and slope, interferences with the water courses, wells, (inaudible) easements, security of travel, loss of visibility, noise, privacy and security, or other issues.

See also relocation assistance, and inverse condemnation.

Inverse Condemnation

Inverse condemnation is not actually a condemnation proceeding at all. It could be called a remedy for the benefit of a landowner. For example, if a condemnor (an entity which has the right of condemnation- see under condemnation) fails to condemn a slice of land across your front yard but takes it any way, this would be inverse condemnation. For the condemnor does not actually appropriate the land but causes damage anyhow, this would be condemnation. For example, let's say that off of your land a hundred yards of so a big new freeway is built and the creek which used to flow under the freeway to the other side now can't get across and every time it rains the water backs up and floods your yard, this might be an instance of inverse condemnation. The courts throughout the United States have found all sorts of interesting things to be inverse condemnation. In order to have condemnation you must show that there has been a taking and that the person from whom things have been taken has not received just compensation. There have been many cases discussing whether or not certain actions done by a government are in fact, takings, or are something different, like the exercise of police power. An example might be if you have 200 feet of frontage along a state road close to an intersection, and you would like to have an access within ten feet of the intersection. The state (or city) would likely tell you no, that if you are to be able to pull out at the intersection would cause all sorts of wrecks. Thus while it might be good for you would be bad for the public. Most likely this would be considered an exercise of the police power, to which you would be entitled to no damages. If the state told you, however, that although before you could pull anywhere along your 200 foot access you can no longer pull out anywhere along your 200 foot of access, this would probably be a taking. The following is a list of situations in which a court has found a taking and ordered that a condemnor pay money to a property owner in the situation where the condemnor did not agree the property owner ought to get anything. Failure to grant a permit for development; application of rent control; closing down a sand pit operation; refusal to rezone restriction of an adult bookstore rezoning, and failure to rezone.

Relocation Assistance and Compensation

Federal government, and most states have a requirement that when the taking of property makes it necessary that a property owner move himself and his belongings, the bid is made not only to compensate him for the property that was taken, but for some of the cost of relocating himself, his family, and a business which he may be operating. There is a maze of laws which govern the application and receipt of compensation for relocation.

Zoning

Zoning may be defined as the power to determine what sorts of uses in building may be put where. As a general rule, cities and counties are without inherent zoning powers and must rely on statutes and constitution which tell them zoning is to be done. Zoning as land use control, has been defined as a division of a community by legislative regulation of districts and the prescription and application in each district of regulations having to do with structural and architectural designs of buildings. (Inaudible) uses can be permissive use (which is the same use in an area which is described for the area), conditional use, which is a use which may be available if certain conditions can be made as set by the board; non-conforming use, which is a lawful use in existence at the time of the ordinance but becomes unlawful after passage of the ordinance; a special use permit (a device which allows a zoning board to fashion specific parameters within which a permittee can operate- similar to condition use permit), a variance (a decision made by a Board of Adjustment which allows a variation from the ordinance based upon hardship and perhaps economic considerations) and exception. Also used sometimes are floating zones, spot zoning and historic zones.

Condominiums

Condominiums are perhaps best described as a method of ownership of real property without being to point in particular to the full extent of your real property. Usually, this means ownership of a single family unit in a multi family structure, but also in ownership to some extent of the common use areas. Condominiums, not existing in older law, are complete creatures of statute. Each state has statutes that determine how they are created, what sort of title is passed, surveys, and a declaration (which sets forth rights, obligations and operation of the property).

Property Damage

(See also Nuisance) When your property is damaged, it may have been what's referred to the law by an Act of God or done by person or persons. If it is done by an Act of God (for example, a tornado) obviously you can't sue God or the tornado. Your only recourse would be to apply for compensation to your homeowners or business owners insurance (which, hopefully you obtained before the disaster). If it was done by another person or persons (a giddy driver misses a turn on Elm Street and drives into your living room) then you can choose to sue that person or persons. There may be cases, like when your house burns because of the negligence of someone who did wiring on it that you may have an action both against your insurance company and against the person who did the wiring.

Nuisance

Nuisance may be defined as a type of property damage which occurs repeatedly. For example, repeated loud noises, giving off obnoxious fumes, a grade in the property which causes repeated inundation of your land, to require to recover is to show the other person had no right to do the action they took, and show your damages. The measure is whether the other person is making an unreasonable use of his or her land. (Inaudible) vibrations, destruction of crops, falling debris, mud washing onto property, odors, embarrassing exhibitions, etc.

Trespass

Trespass generally is a entry upon another's land without lawful authority or justification which causes some damage, however minimal, to the property.

Builders

The main difference in dealing with builder's issues than with homeowners (see purchasing a house/condominiums) is that in addition to all the problems that one finds with a house in existence, there is additional problem of a) no fixed price (while there will be contract price whether or not the house comes into the contract is problematical) and b) visualization; that is if you buy already in existence you know exactly what it looks like, while if something is being built to order, there is a question of is it going to turn out to look like how you wanted to. A contract with the builder will set out the rights and duties of both the parties. Inspection done by the buyer will, by necessity, not include problems with instruction in the past since there is not past. This puts a heightened emphasis on the piece of land upon which the building is to be erected (does it have subsidence problems or flooding problems, etc.) and, with a newly built house, the issues regarding subcontractors and mechanic's liens (see mechanic's liens) become more important. Some states, notably Missouri and Kansas, apply consumer law issues to builders. Sometimes a builder has a warranty and sometimes a home purchaser can also purchase a warranty on the house by an outside third party for a fee.

James B. Jackson, P.C.

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Independence, MO 64055-4758
Telephone: 816-221-1700
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At the law office of James B. Jackson, P.C., I represent clients throughout the Kansas City Metro area, including those in Kansas City, KS; Overland Park, KS; Olathe, KS; Lenexa, KS; Lawrence, KS; Independence, MO; Kansas City, MO; Lee's Summit, MO; Blue Springs, MO; Liberty, MO ; Belton, MO ; Raymore, MO; Raytown, MO; Grandview, MO; North Kansas City, MO; Parkville, MO; Oak Grove, MO; Cass County, Clay County, Clinton County, Henry County, Jackson County, Lafayette County, Platte County, Ray County, Johnson County, Leavenworth County, Miami County and Wyandotte County.