Ask an Attorney - Q&A
The following questions were questions posed to Picket Fence Preview, which were then referred to interested attorneys. Disclaimer: The following answers are not intended as, and cannot be taken as, legal advice on any particular transaction. Seek advice specific to your situation.
Q1) I am selling my condominium without using a realtor, what can I do up front to make the closing go smoothly?
Start by contacting the State Division of Fire Safety. Condominiums are considered 'Public Buildings' and as such need up to date certificates stating that codes are met. Some larger Cities and Towns have their own fire safety inspector and have authority to conduct the inspections and issue certificates. Attorneys in different parts to the State vary on this as a condition of closing, but because of the backlog of requests, it is good to see if the Buyer's attorney will require one, and then schedule an appointment. You also need to provide your Buyer with an up to date 'Resale Certificate' from your association, that lists dues, budgets, upcoming special assessments and whether your dues are current. And you need to provide them with a copy of the Declaration of Condominium and By-Laws.
Q2) I have put a fair amount of money into my home over the years. It is on good shape and I want to sell it 'as is'. What are the pitfalls of doing this?
It may depend on whether you mean that the structure is to be conveyed 'as is' of whether you mean that the title is to be conveyed 'as is'. If you have a cash buyer, this may be fine. Otherwise, your Buyer has to check with their lender as well as their attorney. Lenders most likely will not lend if there are structural issues, State or Local permit issues, or zoning violations. Buyer's attorneys need to provide lenders with clear and marketable title. That is, if the lender ends up with the property in foreclosure, it needs to be able to turn around as quickly as possible and sell the property to get their money back. If there are issues that could prohibit them from doing that, they most likely won¹t let the closing go forward. This may also affect whether the lender can get title insurance and if it cannot, the lender will not lend money to your buyer and the closing won't happen.
Q3) I am selling my owner occupied duplex. I realize that I have to transfer the remaining rents and damage deposit from my tenant to the buyer, but I want to keep part of the damage deposit due to damage caused by the tenant that I have out of pocket expense for. What is the best way to do this?
Unless the buyer agrees otherwise, you need to transfer the deposits and remaining rents to the buyer. Your buyer shouldn't be penalized and have to come up with the whole damage deposit at the end of the tenant's tenancy. The tenant will be expecting that if you don't take care of this issue before closing. While you are still the owner and landlord, you need to have that discussion with the tenant and have them agree, in writing, that they are not to expect or receive the whole deposit back when the new owner becomes their landlord due to the issue. You must also notify the tenant of the upcoming closing and transfer of ownership, and encourage the new owner to make contact as soon as possible after closing. You also need to transfer (assign) the lease at closing to the new owner
Q4) I had a bad experience when I bought my home, and I want to do as much as possible to eliminate last minute issues. What can I do to help my attorney and avoid these issues?
Your attorney has numerous tasks to accomplish before your closing. Attorneys realize that you do too. Sellers' attorneys have to prepare your Warranty Deed, Transfer Tax return (and possibly other applicable tax returns) and certificate of functioning Smoke and Carbon Monoxide Detectors. They also need to contact your lender(s), if any, to get a 'payoff' of your mortgage. As a Seller, it is very important that you get a copy of your purchase and sales agreement to your attorney as soon as possible. Your attorney should also perform at least a 'one owner' title search to help identify and head off any potential title issues before they are discovered later (which could delay the closing)
Buyers' attorneys also need to get a copy of the purchase and sales agreement as soon as possible. The attorney has to conduct a title search in the City or Town where the property is located, prepare title insurance for the buyer and buyer's lender and coordinate the closing. Anything you can do in terms of 'numbers' and information can do nothing but help the process. Most attorneys send 'Welcome Letters' that list the things needed, such as fuel prorations, water bills, any assessments due or paid, tax bills, and customer authorizations to speak to your lender. The quicker and more thorough that you can respond, the better the information that your attorney will have.
