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Thoughts on Charitable Giving

20 Mar

MetroBoston Publication Date March 20, 2013
By Attorney George Warshaw

I was speaking with Mark at the U.C. about this column. He asked me to write about how charitable giving may be used with an estate plan.

Interesting question.

Money you leave by will, trust or otherwise to an IRS tax qualified charity is not included in your estate at death. If your estate is worth $1,250,000 and you leave $250,000 to a qualified charity, your estate is then valued at $1,000,000.

More interesting is what you can do with your charitable estate.

If you want to leave all or a chunk to charity, and possibly avoid even the Massachusetts estate tax problem, you could establish a private tax qualified foundation in which your friends and family participate in making donations to causes that are important to you.

Once or twice a year friends and family get together, remember you in their thoughts and hearts, and do something good with your money and memory. They could use it where it’s needed most – and certainly more efficiently than our spendthrift government.

It’s also a good way of keeping your family together and doing something positive “as a family” with a great result.

There are also Charitable Funds, like Fidelity runs, where they decide how your money is used, or you can direct it yourself in your will or trust.

Say you want to help children or pets. I’ll use the MSPCA and Tenacity, my personal favorites, as examples.

MSPCA, www.mspca.org. You can leave a specific amount of money in your will or trust (a “bequest” in legal talk) or you can target a specific program.

For example, “I give and devise to MSPCA $________ [or _____% of my net estate] for its “Pet Care Assistance Program for the medical care of sick or injured animals.”

Tenacity, www.tenacity.org. Tenacity changes the lives of inner Boston city kids. They learn to play tennis but only after the student and family make a multi-year learning commitment. The kids receive structure, discipline and educational assistance from elementary school through high school. Tennis is the motivator to enroll.

Aside from a bequest, you can give all or a portion of the residue of your estate (i.e. after payment of all debts and bequests.)

For example, “I leave the rest and residue of my estate (or a percentage) to Tenacity to sponsor as many children as possible in its “Middle School Academy.”

Plan it in advance with the charity or just surprise them in your will!

And don’t forget Tenacity and the MSPCA in your planning – helping children and pets is a good thing to do. © 2013 George Warshaw.

George Warshaw is a well-known attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions. Contact him at metro@warshawlaw.com.

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The Home Inspection Trap

7 Mar

MetroBoston Publication Date February 27, 2013
By Attorney George Warshaw

Professional home inspectors often unearth defects easily overlooked by the untrained eye. Don’t pass on a home inspection before buying a house or condo just because it looks good or is newly built or renovated.

The inspection is usually conducted after the offer is accepted but before the purchase and sale agreement is signed. Nearly all preprinted offers contain “an inspection contingency” giving the buyer the right to cancel the purchase based on the results of the inspection.

Be careful how it’s worded – there may be a trap.

Many of these preprinted forms only give the buyer the right to cancel if there are “serious structural or mechanical defects,” whatever that means, or put a limit on the amount of repairs required that permit you to cancel; i.e., “negotiate.”

That’s not good enough in my view.

Don’t hesitate to cross it out and simply make your offer subject to an inspection that is satisfactory to you. It’s your offer – and your right to control how it’s worded. 

Be a smart buyer. Get an inspection before buying, and make it satisfactory to you – and if you’re selling, consider hiring an inspector to flush out your problems before you put your home on the market. © 2013 George Warshaw.

George Warshaw is a well-known attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions. Contact him at metro@warshawlaw.com.

 

 

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When a Phone Call is Not Enough

7 Mar

MetroBoston Publication Date February 20, 2013
By Attorney George Warshaw

Ms. M, a nice young girl, found an affordable South End Condo. It was her first real estate purchase. Mom even liked it.

Her offer was accepted and she paid a $1,000 deposit. .

The offer contained the usual mortgage clause. She had to submit a written application for a loan by a certain date.  If after making a diligent effort she didn’t get a commitment for financing by a later date she could cancel and get her money back.

Ms. M called a mortgage broker who gave her bad news. The condo didn’t qualify under Fannie Mae guidelines. A minimum percentage of condos had to sold or under agreement to owner-occupants. Since hers was the very first sale in a new development, the building didn’t qualify.

Ms. M asked for her deposit back. The seller refused claiming “a phone call was not enough.”

The offer required she submit a written application for a mortgage and make a diligent effort to obtain a loan. She never submitted a written application and never called any banks that might possibly give her a loan.

Is Ms. M entitled to her money back?

No, the court ruled. A phone call is not a written application and a diligent effort requires more than a phone call. © 2013 George Warshaw.

George Warshaw is a well-known attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions. Contact him at metro@warshawlaw.com.

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Marriage and Real Estate

5 Feb

MetroBoston Publication Date February 5, 2013
By Attorney George Warshaw

State law provides married couples a special form of home ownership protection. It’s referred to as a “tenancy by the entirety.” It’s like a joint tenancy but for married couples.

It’s created by simply stating in the deed, “I grant to Dick and Jane, husband and wife (or being a married couple), as tenants by the entirety, the following property . . . .”

What’s special about it?

Real estate acquired under the heading “tenants by the entirety” is similar to a joint tenancy in one sense: if one person dies the other inherits it automatically. A probate court is not required to pass title to the survivor.

Marital property held this way has two special features: first, a creditor of only one spouse cannot seize and sell the marital home so long as it is the principal residence of the other spouse; and second, neither spouse can eliminate the right of the other to inherit the property by merely giving a deed to a child or an outsider.  

There are several exceptions that may make a visit to a lawyer worthwhile. If you acquired your martial home before February 11, 1980 or were originally deeded your home as joint tenants or tenants in common, consult a real estate lawyer to upgrade your ownership. © 2013 George Warshaw.

George Warshaw is a well-known attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions. Contact him at metro@warshawlaw.com.

 

 

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Owing Real Estate as Joint Tenants

31 Jan

MetroBoston Publication Date January 31, 2013
By Attorney George Warshaw

Two or more people can own real estate together in several ways. One of the most common is as “joint tenants with rights of survivorship.”

A joint tenancy is a form of ownership by which a person’s ownership rights in property pass to one’s co-owners upon death.

Ordinarily, when a person dies the heirs must go through the probate court to obtain certification of an inheritance of real estate. Property owned or held as “joint tenants” avoids probate because the property transfer is automatic upon death.

Simply file the death certificate with the Registry of Deeds and the transfer of legal ownership become complete and noted in the official records. Nothing more is necessary to effectuate the transfer of title ownership.

A joint tenancy in real property is established by the initial words of transfer used in the deed. “I grant to Fred and Wilma Flintstone the following property as joint tenants with the right of survivorship . . . .” is how it is typically phrased.

Can one joint tenant deed his or her interest without the consent of the others? Yes. One joint tenant always has the right to transfer his or her ownership interest without the permission of the other – but the automatic inheritance right is usually lost upon the transfer. © 2013 George Warshaw.

George Warshaw is a well-known attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions. Contact him at metro@warshawlaw.com.

 

 

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Should You Add Your Name to Mom or Dad’s Deed?

25 Jan

MetroBoston Publication Date January 24, 2013
By Attorney George Warshaw

Last week we briefly discussed the tax benefits and perils of gifting real estate. One thing that most people do not consider as a gift is when a child’s name is added to a parent’s deed.

Usually a child is added to a deed to make inheritance easier or to help manage the parent’s property.  Adding one’s name to a deed can have unintended tax consequences. It is often considered a gift under the tax code!

If it is considered a gift, then the person receiving the gift receives along with it the same tax basis that the parent had in the property.

If a house is worth $500,000 and a child is added to a parent’s deed as a joint tenant with rights of survivorship, the child usually receives a gift of a portion of the parent’s ownership interest – typically a half-interest.

Keep in mind this basic estate planning rule when transferring any interest in property: a person inherits property at its fair market value; a person receives a gift of property at the same tax basis (i.e. cost + improvements) as the giver has in the property.

Check with your tax accountant, adviser or lawyer before adding someone onto a deed. The foregoing may not apply to you. © 2013 George Warshaw.

George Warshaw is a well-known attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions. Contact him at metro@warshawlaw.com.

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Is it Better to Give than Receive?

17 Jan

MetroBoston Publication Date January 17, 2013
By Attorney George Warshaw

When families get together over the holidays talk often turns to inheriting mom or dad’s house or estate.

Is it better to receive a gift of real estate today or inherit it later? Tax wise, a gift isn’t always the best choice.

When a person dies one’s real estate has to be valued. Let’s say the present market value of the house is $500,000, but mom or dad only paid $100,000 for it.

Give it to your children while you are alive and they are considered to have acquired it at the same price you (mom and dad) paid plus any improvements.

A person who receives a gift steps into the shoes of the giver. If your children acquire the property by gift at the same price or tax basis as mom and dad paid ($100,000) and sell it later for $500,000, they’ve made a profit of $400,000.

If your children inherit it later, on the other hand, the tax law treats it as if your children bought it at its fair market value. Inherit it at $500,000, sell it at $500,000 and they technically made no profit.

Always consult your tax advisor or attorney before gifting real estate. It’s a complicated subject. The above information may not apply you. © 2013 George Warshaw.

George Warshaw is a well-known attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions. Contact him at metro@warshawlaw.com.

 

 

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Have Your Property Taxes Gone Up?

16 Jan

MetroBoston Publication Date January 10, 2013
By Attorney George Warshaw

There is no more unpleasant New Year’s surprise than to find a tax bill in your mailbox for your home or condo, especially if your taxes have gone up.

Massachusetts has a confusing way of taxing properties.

First of all, the tax year starts in July, not January (i.e. which the government calls a “fiscal year”). Fiscal year 2013 began last July 1, 2012.

Secondly, most cities and towns issue bills quarterly (Boston, Brookline) while some bill semi-annually (Cambridge, Cape Cod).

Changes in taxes, rates and valuations are announced in the middle of the tax year (January for quarterly taxpayers), not in the beginning (July). One must wait until January to find out what the taxes should have been last July.

If that isn’t confusing enough, here’s the tongue twister: any increase or decrease in the value of your property that appears in a January tax bill doesn’t relate to the year in which the bill is issued; it relates to the previous tax year!!!

The value the city puts on your property that appears in the tax bill issued in January 2013 is what the city believes your property was worth on January 1st 2012 – one year ago!

Now try to figure that out!

Are You Eligible for a Property Tax Abatement?

If your home or investment property is being over-assessed by the city you may be eligible for a tax abatement.

Every January, municipalities that have a quarterly payment plan (like Boston) announce new tax rates and new assessed values of homes and investment properties.

If your property was overvalued you can file for an abatement. The question that you must answer in your application is what your property was worth on January 1, 2012 (one year ago). Your real estate broker is often a great resource of information.

Abatement applications in cities and towns that bill quarterly must usually be submitted by February 1st (be sure to check your town). In order to be eligible for an abatement – and this is critical – all property taxes due by February 1st (including any past due) must be paid by that date.

Once an abatement application is submitted, the city or town must accept your valuation, make a compromise or reject it within a specific period of time. Many applications, especially in Boston, are rejected merely because the city runs out of manpower to process all the applications.

If an application is rejected, all is not lost. A property owner still has a right to appeal to the Appellate Tax Board and begin a legal proceeding. © 2013 George Warshaw.

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George Warshaw is a well-known attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions. Contact him at george.warshaw@warshawlaw.com.

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Now That The Election Is Over

14 Nov

MetroBoston Publication Date November 14, 2012
By Attorney George Warshaw

Thank goodness. No more ads by candidates ripping each other to shreds. But now, what’s ahead for the real estate economy?

Predictions that real estate will lead us back in the recovery quickly turned to gloom a day after the election. “The recession is upon us again! The sky is falling!”

I must say that I am so sick of hearing good news one day and Armageddon the next.

I’m taking a simpler, unscientific approach to understanding the future of the market. If you want to know what the weather will be, stick your head out the window.

In my view, this country is in a credit crisis. I ask three recovery questions: Is individual credit card debt being reduced? Are foreclosures slowing? Is consumer confidence positive, negative or indifferent?

A positive answer to all three questions means to me that people are recovering and will spend money again soon. People spending money generally means that more people get employed to meet demand.

Perhaps my view is simplistic, but right now the real estate market is still moving forward. Prices have increased. Rents are rising. Homes and condos for sale are in shorter supply. New home construction is up. Banks want to and need to make loans.

All very positive signs. That’s my view! © 2012 George Warshaw.

George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at metro@warshawlaw.com.

 

Minimizing Stress in Buying a New Home

18 Oct

MetroBoston Publication Date October 17, 2012
By Attorney George Warshaw

The real estate market has heated up. While prices are not what they once were, prices are moving upwards with many properties selling over the asking price.

With pent up buyer demand comes stress, especially if you are selling your home and buying a new one.

Avoid the two most common mistakes that buyers make.

First, if you are selling and buying a new home don’t try to do both on the same day. Sell on one day and buy the next. There is too much that can go wrong to risk it all on the same day.

Second, don’t choose the busiest day of the week to close on your purchase.


What would happen if the deed doesn’t get recorded that day? You might not be able to move into your new home for several days. If the sellers were counting on the money to buy a new place to live on the same day, what will they do?


All this can be avoided: never choose a Friday, the last day of any month or the day before a holiday for your closing. These are the busiest real estate days. Why take a chance?


Everything happens very quickly in real estate. Take your time – and a deep breath. © 2012 George Warshaw.

George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at metro@warshawlaw.com.

 

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How to Get Your Security Deposit Back

9 Oct

Metro®Boston, Publication Date: October 09, 2012
Expanded content

By Attorney George Warshaw

Has it been more than 30 days since your tenancy ended?

If, like the vast majority of rentals, your tenancy ends on August 31st, then, under state law your landlord has until October 1st to return your security deposit.

While the law on security deposits is tricky, and you must consult a lawyer for your specific situation, here are some of the basics:

If a landlord, without right, fails to return a security deposit within 30 days after your tenancy ends (presuming you left on time), the landlord is typically liable for 3 times the amount that was not returned.

If a landlord attempts to deduct for damage to the apartment you must be sent a letter by October 1st (the 30 days period) listing the damage to the apartment and the repair costs together with any receipts.

The letter – and this is the key – must be signed by the landlord under the “penalties of perjury.” If the letter does not contain those magic words above the landlord’s signature, the landlord cannot deduct for damage to the apartment.

Can the landlord charge a move out fee or the cost to clean the apartment? You may be surprised by the answer.

WHAT CAN BE LEGALLY DEDUCTED?

The security deposit law, chapter 186, section 15B, is very clear. A landlord can deduct for unpaid rent, water (but only if it is separately metered and you legally agreed to pay it), increases in real estate taxes (but only if you agreed to pay any increase that occurs during your tenancy) and damage to the apartment for which you are responsible – that’s it!

Just because an apartment is damaged in the landlord’s view, it does not mean that the repair cost can be deducted from the tenant’s security deposit. The tenant has to be legally responsible for the damage.

WHAT CANNOT BE LEGALLY DEDUCTED?

The tenant is not responsible for reasonable wear and tear that occurs during the use of the apartment or conditions that existed at the initial rental of the premises.

Cleaning costs are not a repair and a landlord may not deduct the cost to clean an apartment from a security deposit.

Move-out fees cannot be deducted. Some condominium buildings charge the owner of a condo a move-in fee and a move-out fee. Landlords, quite naturally, try to pass that cost along to their tenants. Under the security deposit statute, a landlord can’t charge a move-in fee at the inception of the tenancy, and can’t deduct a move-out fee from the tenant’s security deposit.

WHAT TO DO IF YOU HAVE NOT RECEIVED YOUR DEPOSIT WITHIN 30 DAYS

It is a good idea before or shortly after moving to give your landlord a forwarding address where to return your security deposit. That will eliminate the excuse of “I didn’t know where to send it.”

If you have not received your security back within the 30-day period, you have several choices. You can certainly write to your landlord and request that it be sent immediately. That’s a nice and courteous thing to do. Courts appreciate it.

The law, however, does not require that you send your landlord a letter or wait more than 30 days from the end of your tenancy to take action.

  • You can file a small claims lawsuit and seek triple damages.
  • You can hire a lawyer to file a lawsuit on your behalf.

Many law firms, like ours, do not charge a tenant a fee for pursuing a security deposit claim. The law requires a landlord pay the tenant’s legal fees in a successful security deposit claim. A court then decides what a fair and proper fee is.

GETTING HELP OR ADVICE.

If you need answers to your security deposit questions or help in getting your security deposit back, email me at george.warshaw@warshawlaw.com. We routinely represent tenants with security deposit problems and answer questions without charge. ©2012 George Warshaw.

George Warshaw is a Massachusetts attorney and the author of a legal text, Massachusetts Landlord-Tenant Law, Lexis Law Publishing, now in its second edition.

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Legal Advice: Laws, and court decisions interpreting them, change frequently. The content and information contained in this article is neither intended as legal advice nor shall establish an attorney-client relationship. Before making any legal decision, consult an attorney to see how the foregoing may apply to your particular circumstances.

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Getting Ready for the New Economy

19 Sep

MetroBoston, Publication Date September 19, 2012
By Attorney George Warshaw

Anyone who reads the events of the day, follows the economic and political news and takes a moment to assess it all, may conclude that we are in the midst of a new economic model. That new economic model can be summed up in one word: Turmoil.      

Turmoil is “a state or condition of extreme confusion, agitation, or commotion.” Merriam-Webster Dictionary. That, I believe, fairly sums up our present and future economy and the state of mind of those who manage it.

The good news for real estate is that the Federal Reserve recognized the turmoil and in a desperation measure last week agreed to pour a great deal of money into the economy to bolster it. This will keep interest rates extremely low for a long period of time to come.

But as Fed Reserve Chairman Bernanke admitted, there is not much more they can do if this last round of Fed magic doesn’t work. Since Washington politicians have abandoned common sense in order to make the opposing party and themselves look bad, there are several things one should consider: carefully manage your personal finances, cut your expenses, get rid of debt, but take advantage of opportunities in real estate when you see them. There will still be many ahead.

That’s my plan.  © 2012 George Warshaw.

George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at metro@warshawlaw.com.

 

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Is Social Security a Better Investment than Real Estate?

16 Aug

MetroBoston, Publication Date August 15, 2012
By Attorney George Warshaw

The Associated Press reported a story that many missed: “Since 2010, Social Security has been paying out more in benefits than it collects in taxes.”

“The Social Security trustees project the [present $2.7 trillion dollar] surplus will be gone in 2033. Unless Congress acts, Social Security would only collect enough tax revenue each year to pay about 75 percent of benefits, triggering an automatic reduction . . . . The projected shortfall in 2033 is $623 billion, according to the trustees’ latest report. It reaches $1 trillion in 2045”.

If Congress does nothing – which it has been inclined to do (after all, THEIR benefits aren’t affected) – they will have to raise your retirement age, cut your benefits, or raise your taxes. Likely, all three.

Is your condo or three-family house a better revenue source than Social Security? Well, you’ve likely refinanced it to the lowest possible interest rate imaginable.  It will be paid in 30 years.

Which do you think will be a better source of future retirement income: what you already own and can rent or social security?

I’m betting on rental income.

So, if there is any way you can keep or acquire future income generating property, it may be a better bet than social security.

More next week © 2012 George Warshaw

George Warshaw is a real estate and estate planning attorney in Massachusetts. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts for individuals and families. George welcomes new clients and questions at metro@warshawlaw.com.

Just When You Thought It Was Safe

14 Aug

MetroBoston, Publication Date August 8, 2012
By Attorney George Warshaw

By now most of you know that there exists a secret society of people cloistered far underground, never seeing the light of day, walking hunched over from computer to computer yelling “see that 30 day late, gotcha now!”, who control your credit score and hence your destiny.

It’s bad enough that three competing credit reporting agencies put their own spin on your creditworthiness and some gnome then “scores” your credit like a Vegas Bookmaker, but now there’s a new referee in town who will have even more to say.

On July 10th, the credit scoring gnome “FICO” joined with CoreLogic (a data mining firm) to design a wholly new score specifically for mortgage lenders and borrowers. The FICO Mortgage Score Powered by CoreLogic is based on information provided by CoreLogic in a detailed report called the CoreScore Credit Report.

The report grabs information that Experian, TransUnion and Equifax don’t consider. CoreLogic has access to information about you that others don’t.

Pay your rent late or miss an alimony or support payment (how would they know?) and you could have a problem getting a loan. Supposedly if you dispute an inaccurate item on the CoreScore report, the disputed item won’t be held against you.

Let’s see how that works out!

 © 2012 George Warshaw.

George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at metro@warshawlaw.com.

 

Starting At The Beginning

8 Aug

MetroBoston, Publication Date August 8, 2012
By Attorney George Warshaw

I received an email from a reader asking:

“If I want to buy a house what is the proper place to look for information and also a good price?”

Whether you’re a beginner or an experienced buyer, the place to start is with a mortgage lender, unless you’re lucky enough not to need one.

Almost every seller wants to know if you have been “pre-approved” for a loan; in other words, that a bank has checked out your income and credit and all that is needed to give you a loan is an appraisal of the property, verification of the information provided and a few routine details.

The pre-approval letter will list a loan amount that you qualify for based on your income and credit.

With that in hand, choose the area where you want to live and start shopping online for properties that that fit your price range – but avoid registering online with a broker if you can (you may get more solicitations than you can handle). You can usually get property details elsewhere if you search around.

Ultimately, you’ll want to find a good buyer’s broker who works in that location. Ask your lender, your lawyer or others for a recommendation.

More next week © 2012 George Warshaw.

George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at metro@warshawlaw.com.

 

It’s a Penalty. It’s a Tax. No, It’s a Penalty. Huh?

1 Aug

MetroBoston, Publication Date July 18, 2012
By Attorney George Warshaw

The legality of new federal health care law was upheld by the Supreme Court under the taxing authority of Congress.

Whether you view the law as imposing a penalty, as some claim, or a tax, as others claim, may depend on your political viewpoint, but when it comes to real estate it’s clearly a tax.

Beginning 2013, the new health care law imposes a tax on the sale of certain real estate to help pay for the new law. While the sales tax won’t hit everyone (technically it’s a tax on profits), it will hit many.

The good news. You will likely not have to pay a tax on the sale of your home if your adjusted gross income as an individual is under $200,000 ($250,000 if married filing jointly) or the profit from your sale was not enough to impose any capital gains tax.

The bad news. You may be subject to a 3.8% tax on any profit from the sale of a second home or rental property or, if you are a high income earner and are subject to capital gains taxes on the sale of your primary residence.

Check with your tax advisor to see if the new real estate tax applies to you. © 2012 George Warshaw

George Warshaw is a real estate and estate planning attorney in Massachusetts. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts for individuals and families. George welcomes new clients and questions at metro@warshawlaw.com.

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Legal Advice: Laws, and court decisions interpreting them, change frequently and this article is not updated as laws change. The content and information contained in this article is neither intended as legal advice nor shall establish an attorney-client relationship.

Do You Need A Lawyer to Buy A House?

18 Jun

MetroBoston, Publication Date June 18, 2012
By Attorney George Warshaw

If you are getting a mortgage the bank will hire an attorney to examine the title and conduct the closing. Do you really need to hire and pay for your own lawyer as well?

The role of the lender’s attorney is to implement the loan, not advise the buyer on legal matters or assist in the purchase and sale agreement.

If a title examination shows an easement giving someone the use of or the right to go across your property, as often occurs, the lender usually won’t care but the buyer might.

Or if an examination reveals a restriction on the color you can paint your house, the ability to add a deck, or a myriad of other common matters, the lender will likely not care.

Chances are you won’t even be told about any of a number of matters affecting the property. They’ll just be listed in a form that you might not even see at the closing.

Don’t count on the lender’s attorney to provide any advice if a problem arises. Their job is to collect the money, clear any liens, pay the seller, and get the lender’s papers signed.

So be a smart buyer: save the pennies on something else. Hire your own attorney and get personal legal advice.

©2012 George Warshaw

George Warshaw is a real estate and estate planning attorney in Massachusetts. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts for individuals and families. George welcomes new clients and questions at metro@warshawlaw.com.