Before You List, Ensure You Know Who Holds the Keys

Gromutter schenkt/vererbt Enkelsohn ein HausA recent situation we encountered underscores the importance of having a general understanding of the documents/information your closing agent will need to successfully and timely complete your transaction. In that instance, a gentleman claimed to be the owner of certain property. Upon further inquiry, it turned out that the gentleman was really the son of the owner of the property, who had recently passed away. The son assumed he owned the property, when in fact he did not. The father’s will actually devised the property to someone else, unbeknownst to the son. You can imagine the son’s surprise….and dismay.

One of the most difficult circumstances a closing agent faces is when property is held by someone other than a living individual, such as a trust, a corporation, or in this instance, an estate. Depending on the situation, the resolution can be time consuming, and sometimes costly. In any event, it is always helpful to get in front of the situation as soon as possible to avoid closing delays.

As such, when anyone takes a listing, we strongly suggest you dig as deeply as you can into the true ownership of the property. As you learn more about the ownership of the property, the following are some useful suggestions for information that will generally be required to close a transaction involving that seller:

  1. If the seller indicates that the property is owned by a limited liability company, the closing agent will generally need the articles of organization and operating agreement for the company.
  2. If the seller indicates that the property is owned by a corporation that is not a limited liability company, the closing agent will generally need the articles of incorporation and bylaws for the company. And if the company has a shareholder agreement, many title underwriters might wish to review that as well.
  3. If the seller indicates that the property is owned by a trust, the closing agent will generally need to see the trust agreement for the trust.
  4. If the seller indicates that the property is owned by someone who has passed away (or owned by their estate), then the closing agent will need to confirm that the estate was properly probated, and if so, who owns the property. As with the above example, do not assume that the owner is a family member.  Depending on the circumstances, the property can be owned by anyone. This will require a much more comprehensive review, and as such, this needs to be done as soon as possible. Probating an estate (if required) can be costly and time consuming.
  5. If the seller indicates that the seller inherited the property, see our example above, and dig deeper!
  6. If the seller indicates that they own the property individually, but you see wedding photos on the credenza and the spouse is nowhere to be found, make sure the spouse is aware of what their partner is doing and freely consents to the sale. As most of you know, spouses have rights under Florida law with respect to certain property.

We recognize that in many instances you will get pushback from the seller to get you this information, and if you do, we encourage you to have them speak to your favorite real estate attorney, who will explain to them that this information is not being requested arbitrarily, but to speed up the process of closing the transaction once you have a buyer who is willing to purchase their property! In many instances, a review of this information will require further inquiry, and in some cases, the joinder, involvement, and/or cooperation of additional parties that may or may not be so easy to get. The sooner your real estate attorney can get in front of potential issues and resolve them, the better for your client, whoever that may be.

Sincerely,

Berlin Patten Ebling, PLLC

Article Authored by Evan Berlin, Esq. eberlin@berlinpatten.com

This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.

All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.

www.berlinpatten.com  

SARASOTA

3700 South Tamiami Trail, Suite 200, Sarasota, FL 34239   P (941) 954-9991  F (941) 954-9992

VENICE

247 Tamiami Trail South, Suite 201, Venice, FL 34285  P (941) 955-9991  F (941) 484-9992 

LAKEWOOD RANCH

8130 Main Street, Suite 206, Lakewood Ranch, FL 34202   P (941) 907-9022  F (941) 907-9024

Did you find this real estate law content useful, but need actual legal council?

Speak to a real estate attorney!

, , ,

Menu