By definition, real estate deals are major transactions that can have significant long-term implications. Whether you are buying or selling property, it’s important to be prepared because a legal mistake at any point can be disastrous.
Here are a few of the most common legal mistakes we see in Indiana real estate transactions and how to avoid them. Remember, this is general information, not legal advice; for guidance on your specific situation, give us a call or contact us online to speak with an experienced Indianapolis real estate attorney.
Not being mindful of disclosure requirements
For the most part, Indiana follows the principle of caveat emptor, or “buyer beware,” in real estate transactions. That means the buyer needs to conduct their due diligence and inspect the property for defects before purchasing. However, Indiana law also puts certain disclosure requirements on sellers, including the requirement to truthfully fill out the Seller’s Residential Real Estate Disclosure Form.
Whichever side of the transaction you’re on, you must be conscious of what the other side’s obligations are and what you need to do to protect your interests. For instance, as a buyer, you need to proactively inspect the property and ask the seller questions if you have further concerns (the seller may decline to answer, but even that gives you some information). And as a seller, you need to ensure the required disclosures are truthfully completed, or you could be liable for fraud.
Neglecting to investigate zoning, permit requirements, approvals, and other local laws
As a buyer, think about what you’re going to do with the property and investigate whether you are actually allowed to do it. For example, if you plan to expand or alter the property after purchase, check with the local authorities to ensure that your planned alterations don’t run afoul of any zoning requirements. Likewise, if you plan to use the property as a rental or modify it into a multi-family home, always ensure that you can do that legally before you close on the property.
Not carefully reading contracts and their terms
In a real estate purchase and sale agreement, key terms include the purchase price, closing date, and any contingencies. For example, contingency clauses commonly allow buyers to withdraw if they are unable to obtain financing or if they are dissatisfied with the result of a home inspection. Make sure you fully understand the terms of the contract before you sign—and have a real estate attorney review it to ensure that it complies with the law.
Not conducting your due diligence on the property and the neighborhood
A home inspection is perhaps the best-known part of a buyer’s due diligence, but proper due diligence involves several additional steps. It’s important to have a real estate lawyer investigate the title to the property and ensure that there are no liens, easements, covenants, or other burdens on the property—not to mention ensuring that the seller really owns it free and clear! It’s also important to investigate the surrounding area, including schools, crime rate, amenities, and other factors that might be important to you.
Not getting experienced legal counsel
Ultimately, the best way to avoid legal problems is to hire an attorney right away. While Indiana does not require a lawyer for most real estate closings, it’s always in your interest to have an attorney representing you. Your lawyer can help you take care of any last-minute issues that may emerge on the closing date and ensure that your interests are fully protected at every stage of the process.
Don’t go into a major transaction without good legal counsel. Speak with Indiana real estate attorney Janet Davis Hocker and her team at Hocker Law, LLC today.
"Affordable, knowledgeable, fun, creative, and winning are all words I would use to describe this team. The fact that they can handle all my crazy real estate and business stuff means they can definitely handle yours!" – Eli S., ⭐⭐⭐⭐⭐