Case Studies

Real Estate Purchases & Due Diligence

Easements can make or break real estate deals, and the time to review title and survey documents typically occurs very early in the real estate purchase process. As a purchaser, your “due diligence” rights include a number of contingencies allowing you to terminate a purchase contract without losing your earnest money deposit if specific conditions exist. So, if problems are detected early, a buyer can save the costs of other inspections, tests and appraisals, and can pull out of the deal without losing money.

One recent situation that highlighted the need for due diligence involved a client’s attempted purchase of a home, which was frustrated by flood plain zoning limits and driveway access problems. In this case, the client had conducted their own zoning review and did not uncover limitations on remodeling that existed because of the flood plain designation. To add to the complexity, there was a joint use driveway without any formal agreement between the neighbors as to maintenance, repair or access.

At the eleventh hour, my client’s lender demanded an easement for access but the easement was not desirable, as it would have adversely impacted my client’s intended use of the driveway. Luckily, my client was able to cancel the contract without further penalty, but ultimately, his costs would have been far less if proper title and survey review had been completed earlier in the process.

- David A. Perlick

Disclaimer -- Content is general information only. Information is not provided as advice for a specific matter, nor does its publication create an attorney-client relationship. Laws vary from one state to another. For legal advice on a specific matter, consult an attorney.