Investing in real estate is a great way to secure your money and make it work for you. However, if you are new to the world of real estate, there are a lot of legal issues that you need to wrap your head around. If you are not prepared to deal with the legal hurdles, you could find yourself in a lot of difficulties. These are some of the big legal challenges that real estate investors may be faced with.


Assumption of Liability From Previous Owners


In some cases, when buying a property, you assume liability from the previous owners. For example, if the previous owner was breaking environmental regulations, you will be responsible for fixing the problem when you buy the property. It’s best to speak to some lawyers beforehand and see if there are any liabilities that you will take on. It can quickly get very expensive and most of your profits will disappear, so don’t rush into anything without understanding your responsibilities.


Land Use and Development Laws


Different states, counties, and cities have different laws about building structures in their area. While you may see a piece of land that is just right for your future investment, you still need to check the local government’s standing on it. If there are development restrictions or certain kinds of buildings that can’t be used in the proximity, your plans will go out the window immediately. Make sure you meet with a lawyer who specializes in local land use issues to avoid surprises when dealing with real estate law. If you don’t check land use and development laws, you could end up purchasing a piece of real estate that you are unable to use. 



Business Structure


When you start running a business, it’s very easy not to follow the proper legal structures. This could lead to lots of problems further down the line as your business grows and starts bringing in revenue. For example, if you operate on a sole proprietorship basis and then decide that you want to bring someone else on board, they will be personally liable for everything that goes on with the company – including debts and fines accumulated by the business.


The right legal structure can give you protection and help you manage your assets more effectively, so it’s important that you do your research and decide on the best structure for you.


Vacation Rental Laws 


When you are deciding what type of real estate investment to go for, you may consider vacation rentals. But it’s important that you understand the laws in your area before you do anything else. There is no shortage of examples of people who have experienced legal problems because they didn’t do their research. Many places are now limiting the number of properties that can be used for short-term rentals because of a lack of affordable permanent housing. If you are found to be breaking these laws, the penalties can be quite severe, so don’t take any chances. 

Before you start investing in real estate, you need to understand these legal challenges and be prepared to take them on.


(Disclaimer: This content is a partnered post. This material is provided as news and general information. It should not be construed as an endorsement of any investment service. The opinions expressed are the personal views and experience of the author, and no recommendation is made.)