ROLE OF YOUR ATTORNEY-CONTRACT ADMINISTRATION
BY
MICHAEL J. LOMBARDO, ESQ.

 

After the contract is signed, there is much an attorney does, most of which is not seen by the client.  An attorney will assist either the seller or purchaser to comply with their obligations under the contract.  Some of what an attorney does after the contract is signed will be determined by whether the attorney is representing the seller or purchaser.

 

            1.         Seller’s Attorney.

 

                        a.         Arranges for proper title search and survey meeting the requirements of the contract.

 

                        b.         Reviews the updated title search in order to anticipate requirements the purchaser’s attorney may have before closing, so as to minimize delay in closing.

 

                        c.         Prepares the deed, and prepares and arranges for documents that may be needed for closing (e.g. affidavits as to judgments).

 

                        d.         Assists the seller in arranging for certificates which may be required under the contract.

 

                        e.         Arranges for releases of liens, proof that taxes are paid, proof of existence of a non-individual entity, mortgage payoffs and discharges.

 

                        f.          Prepares the closing statement.

 

                        g.         Prepares notices to be sent to tenants following the closing advising of the change in ownership.

 

                        h.         Evaluates whether the title requirements and demands being made by the purchaser’s attorney are valid demands under the contract.

 

                        i.          Negotiates various issues which may arise.

 

2.         Purchaser’s Attorney.

 

                        a.         Reviews the purchaser’s mortgage commitment (to be sure the loan closing documents reflect the commitment, and advise the purchaser of requirements to be satisfied before the lender will authorize a closing).

 

                        b.         Arranges for the type of title insurance required by the lender to insure the lender’s interest in the property.

 

                        c.         Reviews the title search and survey to determine what title issues may exist, evaluates the quality of the title called for under the contract, and informs the seller’s attorney of the documents required of the seller to close.  This may or may not require title insurance to protect the interests of the purchaser.  Some title issues which may arise include the following (this is not an exclusive list):

 

                                    i.          The legal description may not accurately describe the property, or may not include all of the property contracted for.

 

                                    ii.         The survey may not reflect all of the property contracted for (there are numerous cases where legal descriptions and surveys do not match), and may raise issues which may affect marketability of title.

 

                                    iii.        Easements may affect improvements or specified intended uses.

                                               

                                    iv.        Gaps in title.

 

                                    v.         Private restrictions may affect improvements or specified uses.

 

                                    vi.        Liens may affect the property (e.g. judgments, tax liens)

 

                                    vii.       The property may be in foreclosure.

 

                                    viii.      The seller may be in bankruptcy.

 

                                    ix.        There may be oil and gas lease rights affecting the property.

 

                                    x.         There may be access issues.

 

                        d.         Determines if there are any “hidden” liens affecting the property (these are liens that do not show up in a title search).

 

                        e.         Determines if the appropriate action has been taken by an entity seller  authorizing the sale of the property.

 

                        f.          Determines if the person who is to sign the deed and who signed the contract has been granted the necessary authority by the Surrogate’s Court, if the seller is an estate.

 

                        g.         Determines if the form and terms of the mortgage to be given to the seller (if the seller is holding a mortgage as part of the price) is what is called for under the contract.

 

                        h.         Examines the closing statement for accuracy  (e.g. tax adjustments are figured correctly, rents and security deposits disclosed in the contract are properly credited).

 

                        i.          Coordinates with the attorneys for the seller and lender to schedule a closing.

 

                        j.          Determines whether all leases have been properly assigned.

 

                        k.         Negotiates various issues which may arise.

 

                        l.          Follows up post closing with respect to any post closing matters to be taken care of by the seller (e.g. the recoding of a mortgage discharge).

 

            The above lists for the seller’s attorney and purchaser’s attorney reflect only some of the many issues which need to be addressed after the contract is signed.  There may be other or unusual circumstances which require additional services.  You should discuss with your attorney any issues which may arise, and what additional services may be required.

 

CAUTION:    THIS ARTICLE IS INTENDED TO PRESENT GENERAL INFORMATION AND IS NOT INTENDED TO BE A SUBSTITUTE FOR CONSULTATION WITH LEGAL COUNSEL.

 

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Last Update: March 28, 2011