Some legal issues are unavoidable.  For instance, the victim of identity theft can do nothing to prevent their credit card information from being stolen from a department store’s database.  However, there are many legal difficulties that can easily be prevented with some diligence.  The most common preventable issue that I see clients facing is the botched real estate deal, where one or both sides completes the deal, without legal representation.

With the advent of the internet, free legal documents are widely available.  So would-be real estate buyers, or sellers sometimes search the internet for a “quit claim deed” or a “land contract,” thinking this is all that is needed to properly convey property.  After filling in the blanks, signing the document and (for the really advanced web surfer) getting the document notarized, the parties walk away thinking that they have saved money on legal fees.  And, sometimes, that ends up being true.  Just like a case of the flu sometimes goes away after three days of drinking orange juice.  Maybe you just got lucky.  Next time, you could get unlucky.

Most amateur real estate dealers neglect completely to address extremely important aspects of real estate transactions. For example, they almost never obtain title insurance, or even complete a basic title search. Buyers often don’t know whether there are unpaid taxes or special assessments and if there are, the agreements often do no address who is responsible for paying them.  The parties often fail to prepare and file important ancillary documents, such as a memorandum of land contract and warranty deed.  And, the canned documents they obtain from the internet sometimes omit crucial terms, such as statutory powers of sale or acceleration clauses.

Sometimes buyers or sellers simply have their real estate agents handle the transactions.  Some real estate agents are well-versed in the requirements of simple real estate transactions and do a good job.  However, many agents are just as clueless as the layman about what goes into a transaction of even modest complexity.  Several recent consultations with my clients have started with the client stating, “My real estate agent told me he handled everything.”

In some states, like New Jersey, parties are required to have an attorney assist them with a real estate transaction.  If the deal goes bad, the lawyer is on the hook for malpractice, and his insurance will cover the losses to the client.  Michigan has no such requirement.  So, buyers and sellers of real estate are free to structure and consummate their deals as poorly as they wish.  But, smart buyers and sellers should invest a few hundred dollars in hiring a lawyer to ensure that their deals proceed correctly, rather than risk many thousands of dollars in losses (not to mention legal fees) trying to clean up a mess that could have easily been avoided.  

— Kassem Dakhlallah is a partner with Jaafar & Mahdi Law Group, P.C.  His practice focuses on complex litigation including class actions, representative actions, commercial litigation, civil forfeiture and personal injury. He can be reached at 313. 846.6400 and kassem@jaafarandmahdi.com.