Understanding a Real Estate Deed

By

Real Estate Deed

If you are buying or selling real property, your agent has probably talked to you about “conveying a deed.” There are a number of different types of deeds—warranty deeds and quitclaim deeds are the two most common. What is a deed and how do you determine which is appropriate for your transaction?

A deed is simply a legal document that transfers ownership—right to possession and enjoyment—to land. The deed provides a legal description of real estate, and identifies who is buying and who is selling the property. At a minimum, it must be signed by the person who seeks to transfer or convey ownership.

The most common type of deed is the warranty deed. A warranty deed provides legal assurances that person passing the title knows of no liens or encumbrances, or any adverse claims to the property. If such claims arise, the seller must typically compensate the buyer for any losses. The warranty deed may also make representations about other aspects of the property, such as zoning eligibility, the presence of mineral or other rights, and any potential environmental issues.

In many instances, a seller will transfer ownership through what is known as a “quitclaim” deed. Unlike a warranty deed, a quitclaim deed makes no guarantees that the person transferring it has free and clear title. Quitclaim deeds are common when there’s a known “cloud” on the title—the transferor knows that someone else has made an adverse claim to the property, and is conveying the property with that lien or encumbrance attached. Quitclaim deeds are frequently used by family members conveying property, as well as in divorce proceedings. A quitclaim deed can also be used by the person holding the lien to release any claim to the property.

Contact Our Office

At Barnard, Mezzanotte, Pinnie & Seelaus, we have protected the rights of individuals throughout Delaware County since 1980. We offer a free initial consultation. To schedule an appointment, call us at 610-565-4055 or contact us online

Personal Service | Dedicated Advocacy | Cutting Edge Technology

What to Expect at a Real Estate Closing

By

Real Estate Closing

You’ve made an offer on your first home and it’s been accepted. You’ve started planning your move and your agent has given you a date for “closing.” What does that mean and what should you expect at that meeting?

What Is a Real Estate Closing?

Real estate transactions are, by their nature, highly complex and document-driven. In addition to the buy-sell agreement, which sets forth the obligations of both parties, you’ll have a mortgage (unless you pay cash), a note, title documents, a deed and perhaps an easement or restrictive covenant. The closing brings all the parties together at the same time, so that all contingencies can be immediately addressed and resolved. There’s a simultaneous exchange of documents, so that all parties’ interests are protected.

The closing will typically take place at either a title office or at the office of one of the real estate agents involved in the transaction. All documents required to complete the transaction will be part of the closing package and the parties will sign those documents in the presence of a notary. The seller will receive a check for the purchase price less any amount still owed on a mortgage, as well as any other obligations the seller has agreed to pay. The buyer will receive the deed to the property, though the buyer’s lender may have a lien on that deed.

As a general rule, a closing or settlement statement is prepared in advance, identifying what funds will be exchanged and who will receive what. You should have the opportunity to review the closing statement in advance, so that any discrepancies can be resolved before the closing.

Contact Our Office

At Barnard, Mezzanotte, Pinnie & Seelaus, we have provided thorough and effective legal counsel to clients throughout Delaware County in Pennsylvania since 1980. We offer a free initial consultation. To schedule an appointment, call us at 610-565-4055 or contact us online.

Personal Service | Dedicated Advocacy | Cutting Edge Technology

Should You Set Up a Trust?

By

Set Up a Trust

If you’ve started to plan for the orderly distribution of your estate in the event of your death, you’ve probably wondered about whether or not a trust is right for you. This blog helps you understand what a trust is, why it can benefit you, and its advantages and disadvantages.

To understand the benefits of a trust, you need to have a basic understanding of the probate process. The probate process seeks to ensure the orderly distribution of property that you own upon your death. There are two primary ways that you can have the use of property, but not own it at the time of your death—through re-titling assets and through a trust. If you change the legal title to property, such that you own it jointly with anyone else, the property automatically passes to the joint owners at the instant of your death, and any property interest you had is extinguished.

A trust works a little differently. In essence, a trust is a separate legal entity, into which you can transfer property. When you transfer property into a trust, you relinquish ownership of the property, but have use and enjoyment of it as set forth in the terms of the trust. Typically, you’ll have what is known as an “inter vivos” trust, one that becomes effective while you are still living. Any property that you put in the trust during your lifetime stays in the trust when you die—accordingly, there’s no need to address the ownership or distribution of the property when you die, as you don’t own it.

The obvious advantage to putting property in trust is that you avoid the probate process, which can be expensive and time-consuming. As a general rule, you’ll pay a bit more up front for the preparation and execution of the trust, but it’s usually far less than the estate would pay if the property went through probate.

Contact Our Office

At Barnard, Mezzanotte, Pinnie & Seelaus, we have protected the rights of individuals throughout Delaware County since 1980. We offer a free initial consultation. To schedule an appointment, call us at 610-565-4055 or contact us online.

Personal Service | Dedicated Advocacy | Cutting Edge Technology

How the Probate Process Works

By

Probate Process

Your loved one has died leaving a will and a significant estate. You know you’ll have to take the will through the probate process, but you have no idea exactly what that entails. Here’s an overview.

The Steps in the Probate Process

The first step in the probate process is to have the probate court name an executor/personal representative. This is the person who will be the estate’s liaison with the court and will ensure that all provisions of the will are honored. The executor is typically identified in the will and, unless that person is unwilling or unable to serve, the court will generally name that person to handle those duties.

If there is a will, you must demonstrate to the court that it is valid. That can typically be done one of three ways—

  • A sworn statement by someone who witnessed the signing of the will
  • Sworn testimony in court from a witness
  • A notarized statement, signed by witnesses when they observed the execution of the will

Once an executor has been named and the will has been validated, the executor will conduct an “accounting” of the estate, compiling a record of all property and debts of the estate. The executor will also provide notice to all interested parties, including creditors and potential beneficiaries. If necessary, the executor will also obtain property appraisals.

Once all debts and assets have been identified, the executor will ensure that the debts are paid and any tax filings are completed. The executor will then seek to distribute the property in accordance with the terms of the will, ensuring that all necessary legal measures are taken to transfer title or ownership.

Contact Barnard, Mezzanotte, Pinnie & Seelaus

At Barnard, Mezzanotte, Pinnie & Seelaus, we have fought for the rights of individuals throughout Delaware County since 1980. We offer a free initial consultation. To schedule an appointment, call us at 610-565-4055 or contact us online.

Personal Service | Dedicated Advocacy | Cutting Edge Technology

The Probate Process—An Introduction

By

The Probate Process

So you’ve heard that you need to put an estate plan in place, but you really don’t have a solid understanding of what estate planning is and why you need to do it. It can’t be that difficult for your heirs to fairly divide your property, can it? Sadly, it often is. There can be all kinds of emotions invested in property, and families often find themselves facing significant challenges when there’s no specific direction for the distribution of an estate

Essentially, the purpose of estate planning is to ensure the orderly distribution of your estate in accordance with your wishes. There are a number of different ways that you can pass your assets to family, friends or charitable institutions, is so desired, including the use of wills and trusts, the re-titling of assets, and lifetime gifting.

One of the first terms you’ll likely hear is “probate.” The probate process is a legal process whereby the court oversees the distribution of your estate. One of the common objectives of estate planning is to avoid the probate process. There are a couple of reasons for that. First, probate can be expensive—it’s not uncommon for the attorney who handles the estate to take up to 7% of the value of the estate as the fee for handling the probate process. In addition, the probate process can be time-consuming, meaning you won’t have access to property for months or even years.

One of the simplest ways to avoid probate is to re-title assets, such as a car, house or bank account. If you own property jointly with another person or persons, that property passes to them automatically upon your death, with no need for the probate court to get involved.

Another option for avoiding family conflict over your estate after your death—give away as much of it as you can while you are living. Currently, you can give away u p to $14,000 per person per year without incurring any gift tax.

Contact Our Office

At Barnard, Mezzanotte, Pinnie & Seelaus, we offer experienced and knowledgeable legal counsel to individuals in Pennsylvania. To set up an appointment for a free initial consultation, call us at 610-565-4055 or contact us online.

Personal Service | Dedicated Advocacy | Cutting Edge Technology

Philadelphia Residential Rental Market Remains Strong

By

According to a recent report, a number of factors are combining to help keep the Philadelphia residential real estate market producing “solid result” for landlords.

The study, prepared by the real estate investment firm of Marcus & Millichap, concluded that:

  • Demand for residential rental housing has remained strong for a number of years, a trend that should continue into the foreseeable future
  • Employers in the greater Philly area are expected to add as many as 45,000 new jobs in 2016 alone
  • The number of new housing starts nationally has declined in the last few months, making rental housing a more attractive investment

According to Marcus & Millichap, developers are aware of these trends and are expected to increase the number of new residential rental units completed in 2016. Approximately 3,200 new apartments were added in 2015, but the expectation is that the number of new units in 2016 could be upwards of 5,500. The study found that nearly all of the new units opened in 2015 have already been rented, with the few exceptions being mostly in luxury and high-end apartments.

Of course, when demand meets or exceeds supply, the average cost of rent goes up as well. The report anticipated a three percent increase in the average rent for a residential apartment over last year, to an average of $1,221. The study also found that property owners in Philadelphia had an average return on investment of 7.93% last year, highest in the Mid-Atlantic region, but under the national average.

Contact Our Office

At Barnard, Mezzanotte, Pinnie & Seelaus, we have provided thorough and effective legal counsel to clients throughout Delaware County in Pennsylvania since 1980. We offer a free initial consultation. To schedule an appointment, call us at 610-565-4055 or contact us online.

Personal Service | Dedicated Advocacy | Cutting Edge Technology

Must a Contract Be in Writing to Be Enforceable?

By

Writing to Be Enforceable

Suppose you were having lunch with a prospective customer or supplier and you talked about a specific deal. You offered to perform certain tasks and you specified a price, and the other party acknowledged that those terms were acceptable. Do you have a contract? Do you have to put the terms of that oral agreement in writing for them to be enforceable?

The Statute of Frauds in Pennsylvania

As a general rule, provided that the requirements of a valid and enforceable contract are present, an agreement does not need to be in writing to be valid and enforceable. However, in Pennsylvania, as in other states, there’s a law known as the statute of frauds, which identifies those types of contracts that must be documented in writing to be upheld. Here are the specific instances in Pennsylvania when you must commit an oral agreement to writing:

  • When the contract involves the transfer of any interest in real property, including the sale or purchase of residential or commercial real estate
  • If the agreement addresses a lease of real property for a period of more than three years
  • If the contract involves the sale of goods with a value of $500 or more
  • If the agreement involves the lease of goods or personal property with a value of $1,000 or more
  • When the contract involves a guarantee, warranty or promise to answer for the debt or obligation of another person or entity
  • Contracts for the sale of personal property where the value is $5,000 or more

Contact Our Office

At Barnard, Mezzanotte, Pinnie & Seelaus, we have protected the rights of individuals throughout Delaware County since 1980. We offer a free initial consultation. To schedule an appointment, call us at 610-565-4055 or contact us online

Personal Service | Dedicated Advocacy | Cutting Edge Technology

Restrictive Covenants in Real Estate

By

Covenants in Real Estate

In recent years, it’s become a practice for many real estate agreements to contain restrictive covenants—provisions that place limits on the future use of the property. Often, these limitations involve aesthetic matters, such as choice of color for the exterior of a home or the erection of a fence. If the covenant is included in the deed to the property, it may be enforceable against future buyer/owners as what is known as a “covenant running with the land.” Are all restrictive covenants enforceable? What legal prohibitions may be applied to restrictive covenants?

As a general rule, covenants related to real estate are enforceable unless they are what are known as “exclusionary” covenants, designed to prevent people from purchasing real estate because they belong to some protected class—women, minorities, the disabled, etc. Exclusionary covenants were common in the United States in the early 20th century, but were banned by the U.S. Supreme Court in 1949.

In order to be enforceable against subsequent owners of property, a restrictive real estate covenant must meet a number of tests:

  • The covenant must comply with the statute of frauds, which identifies what contracts must be in writing to be enforceable
  • The parties to the original transaction must have intended that all future owners be limited by the covenant
  • The covenant must involve the use or enjoyment of the physical property and cannot relate to any characteristic of the owner
  • Anyone purchasing the property must have been notified of the covenant at the time of purchase

Covenants may prohibit owners from engaging in some action related to the land, such as installing a hot tub, or they may require that property owners take certain actions, including keeping lawn and grounds manicured.

Contact Our Office

At Barnard, Mezzanotte, Pinnie & Seelaus, we have provided thorough and effective legal counsel to clients throughout Delaware County in Pennsylvania since 1980. We offer a free initial consultation. To schedule an appointment, call us at 610-565-4055 or contact us online

Personal Service | Dedicated Advocacy | Cutting Edge Technology