Real Estate Investing: Legalities & Disclosures
Investors want all their ventures to be successful. One way to get a head start is to understand the responsibilities and obligations attached to real estate investing in Gainesville. Local realtors with Rabell Realty Group highlight a few legalities to keep in mind, including the disclosures required in Florida.
Legalities To Look For As A Property Investor
Buying an investment property is an exciting time. It offers both short-term returns in the form of monthly rent and a long-term returns if the investor decides to sell the property a few years later. But before you sign paperwork to close on a property, here are three potential legal issues to look into:
Is the property in the middle of a dispute over an easement? Is it zoned to be used how you intend to (e.g. as a rental home)? If you’re unsure how a property may be zoned, check its official designation through Alachua County Growth Management or the City of Gainesville.
Titles & Escrow Documentation
There can be several problems attached to a property’s title, such as tax or mortgage liens and boundary issues. Home investors in Gainesville may request the help of a real estate attorney to check the title and property documentation for issues, or they may begin looking on their own. The county assessor’s office will have property tax information.
If a property poses current or potential environmental issues, you’ll want to know about them now rather than later, when the cost to address them may exceed any return on investment received. A common example of an environmental issue is contaminated soil from a buried fuel tank. Environmental issues have continuing liability, meaning that if you invest in a property whose previous owner did not take care of the problem, the responsibility to fix the issue passes onto you, even if the seller knew of the issue.
What You Need To Know About Disclosures
Sometimes reading too much information about legalities and how to invest in property can be overwhelming, but one area you should not overlook is disclosures. Sellers in Florida only have to disclose information that affects the property’s value, such as its title or condition throughout the years.
Duty to Disclose in Florida
Sellers of residential real estate are required under Florida law to disclose material facts about the property, such as its past and present condition, repairs completed and what needs to be repaired. It is the seller’s duty to disclose als conditions that may affect the property’s value, such as:
- Asbestos, lead, and other environmental hazards;
- Issues with the electrical wiring and/or HVAC system;
- Problems with the property’s title;
- Termites and other insect infestations; and
- Water leaks.
The duty to disclose this information to a property investor has been legally enforceable for about three decades Florida. The seller can provide the information verbally or in writing, though most disclosures are given in writing.
Other Disclosures For Investors
While Florida only requires sellers to disclose repairs and conditional issues, investors often want all the information they can have about a property.
Where a property is located can affect the repairs and/or alterations investors may have in mind for it. Historic districts often have restrictions on changes to the area’s properties, which can bump up the cost of repairs and alterations.
Homeowners’ Association (HOA) Information
A property governed by an HOA will have monthly notes from the association’s meetings, including its financial health. If the property has been assessed for improvements by the HOA, and the seller doesn’t disclose it, you’ll be responsible for the improvements.
Noises and odors coming from the surrounding area can quickly go from an occasionally annoying to problematic. Neighborhood nuisances influence tenant turnover and sometimes even the property’s value, though this can be subjective.
Real Estate Investing in Gainesville, FL
Even the best places to invest in real estate carry potential legal issues and items of obligatory disclosure, but don’t let that dissuade you from becoming a property investor. Rabell Realty Group is a team of Gainesville realtors whose goal is to help you find the perfect investment property and remind you of your responsibilities as a buyer or seller. Call us today to get started!