Silverman & Jaffe
Real Estate Attorneys
Walnut Creek, CA
Practice Areas
Real estate law is multi-faceted. When real property owners purchase, title, manage and sell their property, legal advice is often helpful, and sometimes imperative.
The nexus between real estate and estate planning is strong. Our focus in the real estate law arena focuses on titling; evaluation of a prospective sale, gift or tax-deferred exchange; and optimal structuring of intra-family transactions. Real estate owners and prospective owners may benefit from advice and assistance in connection with any of issues, including tax implications (property tax; income tax; federal estate/gift tax); identifying the best manner in which to hold title; evaluating what terms should be included in a purchase/sale or lease agreement; determining how multiple co-owners might optimally manage, refinance, sell and inherited property; ensuring that real estate loan transactions are properly documented; and attempting to resolve disputes among co-owners or between a buyer and seller.
Real Estate Titling
When purchasing property, prospective buyers must decide on the manner in which they wish to hold title.* Customarily, standard residential purchase/sale agreements contain a warning that the manner in which title is held has serious legal and tax consequences. Nevertheless, many people take this decision casually and with an insufficient understanding of the implications.
The choice people make should be based on legal and tax advice that takes into account their particular circumstances and goals. Often, the optimal way to hold title is in a Revocable Living Trust, which is, of course, only possible if an owner has established a Revocable Living Trust (see Estate Planning practice area).
For real estate held for business or investment (rather than strictly for personal use), it is often beneficial to form an LLC and transfer title of the property into the LLC (and integrate the LLC titling with one's Revocable Living Trust).
* See brochure on pros & cons of alternative methods of holding title to real estate.
Purchase/Sale Transactions (Residential & Commercial)
Often times, purchase/sale transactions are facilitated by competent real estate brokerage professionals; standard forms are used; the deal has no substantial complexity; no significant problems arise; and everything goes smoothly through the close of escrow. But, whenever this is not the case, prudent buyers and sellers retain legal counsel.
Real estate legal representation may include, but is not limited to, the following aspects:
deal structuring and analysis;
drafting and/or reviewing documents before they are signed and/or submitted to the other party(ies);
negotiating key terms of the transaction;
reviewing closing documents;
providing advice about “internal” aspects of the transaction, such as property tax issues; existing liens and encumbrances; distribution of the sale proceeds; facilitation of a 1031 tax-deferred exchange.
Intra-Family Real Estate Transactions
Whether a real property owner may wish to make a lifetime gift a full or partial interest to a loved one, make a specific bequest upon death of a home or investment property, loan funds to a relative for a property purchase or refinance, it can be invaluable to consult with legal counsel to identify potential pitfalls. Smart, successful people often don't even consider consulting with legal and tax counsel before making a seemingly simple and straightforward deal with a trusted relative. Of course, the problem often arises later when the innocent property owner learns that such professional consultation could have saved tens or hundreds of thousands of dollars and a lot of aggravation.
Many of our affluent property-owner clients wish to make gifts of property to loved ones to help launch the loved ones into adulthood, relieve them of management obligations and/or for legacy planning. Gifting of property into one or more kinds of specialized, irrevocable trusts can create substantial tax leverage and mitigation of estate tax liability. Moreover, in the process, robust control, creditor protection and provisions that help prevent marital claims can provide very meaningful advantages to the loved ones who are beneficiaries of the irrevocable trusts.
Promissory Notes & Deeds of Trust
In the course of most real estate transactions, a loan is obtained by the buyer to finance the purchase. If, as with most deals, the loan is an institutional one, it is important for the buyer to be well informed about the terms of the loan agreement and related documents. If questions or concerns arise, it can be helpful to hire an attorney to review and explain the loan terms and required paperwork.
In particular, legal counsel should be employed in any real estate loan transaction involving an individual lender (i.e. not a bank or other lending institution). Usually, such individuals are unaware of applicable law and do not know how to protect themselves in advance of a potential default by the buyer/borrower. Regardless of whether the lender and borrower are relatives or good friends, it is very important that the parties properly document the terms of the loan. When it is prudent to secure the loan by the property, it is important to draft and cause to be executed a comprehensive promissory note and Deed of Trust and cause the Deed of Trust to be recorded at the close of escrow.
Obtaining relevant tax advice from a CPA or other tax professional is also important. Generally, it’s highly recommended for a party to a real estate loan transaction to obtain applicable legal and tax advice before entering into any agreement. Sometimes, the terms of a transaction can be structured in a more protective or beneficial manner for the individual lender. In other instances, the contemplated deal is sufficiently risky or problematic that one or both parties may be better advised to avoid the transaction entirely.
Please contact us at Silverman & Jaffe, PC to discuss how we may best assist you with all of your Estate Planning, Trust Administration, Probate, Real Estate, Business or related legal needs.