Real Estate Law

The following is intended to provide helpful information about real estate law. The discussion is general, and exceptions apply. It is meant only to give a sense of the legal area, not to be exhaustive. Consult an attorney for details pertaining to your situation. Do not rely on this information alone, as your situation is unique from other situations. This firm waives any liability resulting from your relying on the information provided. Again, simply consult an attorney for a proper handling of your case.

A sales agreement is a contract by which one party agrees to sell to another real property under certain terms and conditions as set forth in the agreement. According to the Pennsylvania Statute of Fraud, a sales agreement shall be in writing, otherwise it is unenforceable and denies both the buyer and seller the right of specific performance.

The law requires no particular form of writing, but the writing shall contain certain basic information. It shall disclose: (a) the identity and interest of the parties; (b) the terms of the sale, including the consideration; and (c) a description of the real estate sufficient to identify it. A sales agreement for residential property constructed prior to 1978 must contain a lead-based paint contingency clause, and must have a lead warning statement in large type on a separate sheet attached to the sales agreement.

From the moment the sales agreement is signed, the buyer becomes the equitable owner of the parcel of real estate and therefore the actual owner. The seller, by holding legal title in fact, holds it as mere trustee for the buyer and as security for the balance of the purchase price. It is to the benefit of all parties concerned that the sales agreement be as complete as possible, to reduce the odds of disputes and ultimately law suits against each other. An attorney can assist a buyer or seller in preparing an appropriate sales agreement.

There are two types of ownership of land in Pennsylvania:

1. Estates of freehold; and
2. Estates of less than freehold.

a)        An Estate in Fee Simple (also, "fee simple absolute") is the most complete form of ownership. It is unconditional and absolute ownership, being the sum total of all of the rights and interests which an owner can have in real property. It may be limited only by the interests of the government. All of the other estates in land are but a part of the fee simple absolute estate.

b)        A Life Estate is one in which the owner (called the "life tenant") has possession of the real property for as long as he or she is alive, or for the life of a specifically named person. This estate ceases on the death of the measuring life, and is neither devisable nor descendible. The life tenant can convey his or her interest; however, the term of ownership is limited by the original measuring life. The life tenant may be enjoined by the remainderman (i.e., the party to whom the estate will pass) from committing or permitting waste to occur on the real property. The life tenant must maintain the property and must not do anything that would decrease its value. In addition, he or she is responsible for ordinary taxes and standard maintenance expenses.

a)        An Estate for Years is one which is held for a specified, definite period of time.

b)        An Estate at Will is an estate which may be terminated at any time by the lessor and/or the lessee. It is also known as a month-to-month lease.

c)        An Estate at Sufferance is the lowest grade of estate in real property. The holder has neither title, nor a leasehold interest, but only possession of the property. This status usually is applicable to one who remains in possession after a lease has expired. That party is a tenant as long as the owner permits him or her to remain.

Title to real property shared by more than one person at the same time is joint ownership or a joint estate. There are three types of joint ownership in Pennsylvania.

a)        Tenancy in Common is where each of the owners holds an undivided, fractional interest in the same real property. He or she owns the whole of his or her undivided interest. Each tenant can convey, encumber, or devise his or her interest. In the case of death during the time of ownership, that interest passes to his or her heirs.

b)        Joint Tenancy differs from Tenancy in Common in that each party owns an undivided share of the whole estate. If one of the two owners dies, the survivor becomes the sole owner of the entire estate. Hence, joint tenancy is called the tenancy of survivorship. A joint tenant may not dispose of his or her interest with a Will. Nevertheless, during his or her lifetime, it is possible to convey the interest to a third party, as well as divide the joint property by judicial decree.

c)        Tenancy by the Entirety refers to ownership by a husband and wife, unless the title clearly indicates otherwise. Tenancy by the entirety has a survivorship character similar to joint tenancy. Each party owns an undivided interest of the whole. The whole is not divisible, and neither party may convey nor encumber his or her interest.

A condominium is an estate created by statute. It is real estate, portions of which are designated for ownership and the remainder of which is designated for common ownership solely by the owners of the portions. Real estate is not a condominium, unless the undivided interests in the common elements are vested in the unit owners. A condominium may be created only by recording a declaration which has been executed, in the same manner as a deed, by all persons whose interest in the real estate will be conveyed to unit owners.

A cooperative is a type of ownership, where the real estate is vested in a cooperative organization, usually a corporation. The "owners" of the apartment units are actually tenant shareholders or beneficiaries of the corporation, and occupy their units under proprietary leases.

An easement is commonly known as a right-of-way. An easement is a non-possessory interest in land, which permits the holder to use the land of another in a limited manner. An easement is presumed to be an easement appurtenant, which relates solely to the land. If clarified, an easement can be an easement in gross, which is personal to the owner and not to the land. The following are four types of easements.

a)        Easement by Prescription arises if a person uses the land of another adversely, openly, continuously, notoriously, and uninterruptedly for a period of twenty-one years. Necessity is not a requirement.

b)        Easement by Implication is applicable when division of a property was created by a common grantor. Although no easement over one of the parcels was specifically granted, use of another parcel would be impossible without the existence of the easement.

c)        Easement by Necessity is a form of easement by implication and is applicable when one person originally owned two adjoining parcels of land and then conveyed one, to which access is blocked by the remaining tract of land. A right of way by necessity never exists for the purposes of just convenience. An easement by necessity ends, when the necessity ceases to exist. One of the well-known examples of this kind of easement is when disposition of the transferred property does not allow access to it from the highway, other than by passing over the remaining land of the grantor. As a result, the grantee is entitled to a right-of-way of necessity over the land of his or her grantor.

d)        Easement by Express Grant is characterized by the intention of the parties to the grant. The intention should detailed, otherwise the express easement is regarded in favor of the grantee and may be used in any reasonable manner.

One of the common areas for landlord/tenant disputes is termination of the landlord/tenant relationship. The following information pertains to the basics of termination procedure.

If a landlord desires to regain possession of real property from a tenant in possession, the landlord must notify the tenant in writing in one of three circumstances: (a) termination of the lease term; (b) forfeiture of the lease for breach of its conditions; and (c) the failure of the tenant, upon demand, to satisfy any rent reserved and due.

Generally if the lease term is less than one year, the landlord must give fifteen days notice to the tenant to vacate the premises. If the lease term is for more than one year, the landlord must give at least thirty days notice. If the situation involves the failure of the tenant, upon demand, to satisfy any rent reserved and due, the landlord may give only ten days notice to vacate. However, notice requirements can be altered under the lease contract provisions. You should consult a lawyer to verify your lease contract terms.

Limitations on escrow account amounts exist, depending on the year of the lease. During the first year of the lease, the sum may not exceed two months rent. During the second and subsequent years of the lease, or during any renewal of the original lease, the escrow amount required may not exceed one month's rent. Escrow accounts serve to compensate the landlord for damages to the property and/or for default in rent. The escrow funds required in the second and subsequent years, which exceed one hundred dollars, must be placed in an escrow account at a banking institution. However, the landlord may guarantee that the escrow amount will be returned to the tenant upon lease termination, if the guarantee of repayment is secured by a good and sufficient guarantee bond.

Upon lease termination, or upon surrender of the property by a tenant, the landlord has thirty days from the date the landlord receives written notice of the tenant's new address to provide the tenant with a written list of any damages for which the landlord alleges the tenant is liable. This list must be accompanied with payment of the portion of the escrow funds which are remaining after the landlords pays for the damages of the tenant out of the escrow account. These provisions do not apply to commercial leases. There is no duty to return escrow held as a security deposit in the event the tenant owes the landlord monies for rents or damages in excess of the security funds being held.

Any landlord who fails to provide a written list within thirty days forfeits all rights to withhold any amount from the tenant in order to pay for the alleged damages of the tenant. Additionally, any landlord who fails to pay the tenant the difference between the amount of money in the escrow account and the amount of damages incurred shall be liable for double the amount due to the tenant.

The party owning money to a bank is called the "mortgagor." The bank is called the "mortgagee." If the mortgagor defaults on his or her obligations as outlined in the mortgage, the mortgagee has a right to enter into a foreclosure action. This action is basically a lawsuit brought by the bank against the mortgagor to collect on the loan. If the bank prevails in the lawsuit, the judicial decree typically orders a public sale of the real estate.

The sheriff of the county where the property is located conducts the public sale. The property must be properly advertised, and must be exposed for public sale on particular sale dates. There are different ways to save a property from foreclosure. You should consult an attorney to determine which legal mechanism might be applicable to your case.

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