In most states, involving an attorney in a residential real estate transaction is optional. If you’re using a realtor to help sell your rental and there is nothing out of the ordinary about the transaction, you probably don’t need a lawyer.
However, if you’re selling a rental under one or more of the following conditions, consider seeking advice from an experienced real estate attorney:
- Seller-financing: an attorney will advise you on the best way to structure the deal to protect you and the rental property.
- Short sale or foreclosure: an attorney will help negotiate with your bank, protect your other assets, and limit your personal liability.
- Uncooperative tenant in the rental: an attorney will advise you about your rights and obligations under the lease agreement, and help transition the rental business to the new owner.
- Executor or personal representative: an attorney can help probate the will (if necessary), advise you on how to deal with conflicts between beneficiaries, and help limit your liability and stress by making sure the sale is handled appropriately.
- Co-own with a reluctant seller: an attorney will advise you on how to protect yourself if the reluctant seller changes his or her mind.
- Complicated properties: if there’s a title problem, an issue such as questionable water rights or possible environmental contamination, an attorney will advise you on which disclosures must be made and help you figure out which issues to resolve prior to sale.
- Judgments or liens: an attorney can help negotiate payoffs and develop strategies to protect your other assets.
- LLC or corporate owner: if your business owns the property, and not you personally, an attorney will help draft the documents authorizing the sale and assist with debt payoffs, distribution of the proceeds among owners, reinvestment and tax implications.
In a few eastern states you may be required to involve an attorney. In most states you are free to go it alone, but remember that an ounce of prevention is worth a pound of cure. Hiring an attorney to prevent trouble, minimize liability, and give you peace of mind might be worth the money.