When you’re putting a tremendous amount of money into a real estate investment, you naturally have concerns. To protect your interests, it’s only smart to hire an attorney to manage your due diligence before you commit to a deal.
What happens, though, when your attorney doesn’t live up to your expectations? It could be malpractice in certain situations.
Failure to uncover liens or title problems
If a lien isn’t resolved prior to a sale, it becomes the new owner’s responsibility, and errors in the chain of ownership can lead to costly litigation. If your attorney was responsible for reviewing the title search and they failed to spot these kinds of issues, that could be considered negligence.
Failure to identify environmental issues
Undetected environmental issues with a piece of property can have legal, financial and regulatory implications for buyers. During due diligence, attorneys should be alert to things like soil and groundwater contamination that would affect opportunities for the property’s use, underground storage tanks and restrictions on development due to the presence of wetlands, floodplains or endangered species habitats.
Failure to address zoning and nearby developments
Part of managing a real estate investment risk is making sure that the zoning is correct for the property’s intended use. It also means evaluating how known nearby developments will affect the property’s overall value. While something that improves the infrastructure of an area could be positive, other developments may cause pollution, overcrowding or alter the whole character of an area.
Failure to include appropriate contingencies in the contract
A good real estate contract has to balance the interests of the buyer against those of the seller – and that often means the use of contingencies. An attorney’s failure to make sure that there are appropriate contingencies regarding the financing and inspections could end up severely disadvantaging the buyer.
Failure to inform the buyer of foreseeable risks
It’s not an attorney’s job to decide for a client when a risk is too much – but it is their job to make certain the client is aware of those risks before they make a deal. If an attorney fails to inform their client about potential economic risks or disadvantageous terms and conditions in a contract, that could be malpractice.
If you believe you have been the victim of malpractice by a real estate attorney, it may be time to discuss your situation with a lawyer who can help you understand your rights and options.