What Is Real Estate Law?

Legal considerations regarding commercial and residential property

By Super Lawyers staff | Reviewed by Canaan Suitt, J.D. | Last updated on April 5, 2022 Featuring practical insights from contributing attorney Jeffrey S. Marks

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Real estate law concerns physical land, sometimes called real property, and the structures and resources on that land. We are all affected by real estate laws, though we likely don’t think about them or our property rights until we actively buy or sell property. A real estate lawyer isn’t always required in a real estate transaction, but they can be helpful when you need to navigate unexpected situations. “You know, you’re spending so much money in a real estate transaction. To not have an attorney who’s going to… look everything over is just silly,” says Jeffrey S. Marks, a real estate attorney at Busse & Busse law firm in Arlington Heights, Illinois.

“[Real estate lawyers typically] charge a flat fee—it doesn’t matter if it’s a $15 million property or a $15,000 property. As an attorney, we’re probably paid the least of anybody in the transaction, and we’re completely independent. We don’t represent the broker. We don’t represent the title company. We only represent the party and we have the party’s best interests in mind. We’re the ones who can come to a client and say, ‘Listen, it may be in your best interest to walk away or kill this transaction.’ To have peace of mind [about your real estate transaction] for a flat fee is huge.”

Real Estate Law: Residential and Commercial Transactions

Real estate law is governed by state law and generally divides into two categories:

  1. Residential real estate law
  2. Commercial real estate law

Both types involve mortgages and real estate contracts, which can be negotiated with the help of a lawyer. Local government regulations, homeowners association rules, and easements may also impact a property owner’s use of their real estate.

Some property owners are interested in offering their property as a short-term rental through services such as Airbnb. A lawyer can ensure that your short-term rental property is in compliance with local regulations and navigate property tax laws.

In the unfortunate circumstances of foreclosure, housing discrimination, eviction, or building defects, a lawyer can help an owner or buyer evaluate their legal options.

As an attorney… we don’t represent the title company. We only represent the party and we have the party’s best interests in mind. We’re the ones who can come to a client and say, ‘Listen, it may be in your best interest to walk away or kill this transaction.’ To have peace of mind [about your real estate transaction] for a flat fee is huge.

— Jeffrey S. Marks

Common types of residential property include condos, townhouses, single-family houses, and multi-family houses. Duplexes and fourplexes are considered multi-family houses, but anything more than four units is generally deemed commercial property.

The home-buying process can vary by state, but usually, the buyer and seller will hire real estate agents to assist them with the process. Occasionally, parties may choose to, or be required to, hire a real estate attorney.

While buying and selling a home is a routine process, you may encounter situations that could cause a dispute or delay in the process. You may want to consider speaking with a lawyer to help you understand your options should any of these situations arise.

Housing Discrimination

The Fair Housing Act prohibits discrimination against prospective buyers based on specific protected characteristics, which include race, religion, national origin, sex, familial status, and disability

Discrimination can be overt, such as advertising that requests applicants of only one sex, religion, or race. However, more often, discrimination is subtle. For example, a seller who turns away every prospective buyer of one race could be found to be discriminating even if they aren’t explicitly asking for applicants of only specific races.

Failure to Disclose

Sellers are required to disclose any defects a home may have. They must be upfront about past or current issues with the house and any repairs. This requirement is intended to protect the seller from future lawsuits. It also informs the buyer about potential problems they may have to deal with when becoming the homeowner. Common disclosures include:

It is better for a seller to over-disclose, though they may consider discussing disclosures with a lawyer. Likewise, buyers who believe they have discovered something that should have been disclosed might also want to speak with a lawyer.

Construction Defects

Construction defect claims are like failure-to-disclose cases, but they are more common with new construction.

These types of claims can range in severity from peeling paint or warped baseboards to foundation problems that make the house dangerous to live in. They can also be complicated because you may have to decide who to hold liable within a specified time.

An experienced real estate lawyer will be able to help you evaluate your claim and instruct you on the appropriate time limits in your state.

Commercial real estate is property used for a business purpose that the owner expects to make a return on. Common examples of commercial real estate include retail stores, office buildings, industrial parks, and apartment buildings.

The most common legal issues in commercial real estate involve land disputes or problems with a lease. A basic commercial lease will include rent and duration terms. Still, parties generally cannot use a standard lease form for all transactions because the provisions will have to be tailored to the specific intended uses of the property.

For example, in a strip mall, a landlord’s lease with Business A may limit the services Business B can offer, which must be reflected in the lease. Zoning and land-use regulations such as easements and environmental laws can also restrict commercial real estate.

A mortgage is an agreement between a bank and a borrower. The bank loans the borrower money to purchase real estate, and the property is collateral for the loan. The specifics of your mortgage will depend on whether it is residential or commercial.

Residential Mortgages

Residential mortgages are typically made to individuals. The debt is repaid in regular installments, usually over 30 years. However, lenders can generally repay their whole mortgage before the loan’s maturity date without incurring a penalty.

Commercial Mortgages

Commercial mortgages are made to business entities.

In the event of a default, the lender may recover from the owners; however, some loans stipulate that the lender can only recover from the property. Mortgages for commercial real estate sometimes require regular payments for a few years with a lump sum payment of the remaining balance at the end of the payment term. Commercial borrowers might face penalties for prepayment or early repayment to protect the lender’s anticipated earnings.

Foreclosure

In the unfortunate event that a lender cannot repay their mortgage, the mortgage lender may begin a foreclosure action to take possession of the mortgaged property. The process can vary by state.

There are methods through which a borrower can avoid or delay foreclosure after missing mortgage payments. Borrowers may negotiate repayment plans with lenders or obtain a lower interest rate.

Should I Talk to a Real Estate Lawyer?

A lawyer can help you at all stages of a real estate transition—from running title checks to writing and negotiating purchase agreements. Your lawyer can also represent you in discrimination or foreclosure cases. If you are selling your property, your lawyer can walk you through mandatory disclosures and help you get the best value for your property.

A lawyer will further be able to anticipate potential problems with your case and advise you on how to approach them. They may even be able to help you avoid potential problems altogether. Your lawyer will also keep track of deadlines and file all the paperwork with the necessary courts and agencies, giving you one less thing to worry about.

Find the Right Real Estate Attorney for Your Needs

It’s crucial to approach the right type of attorney—someone with experience in the real estate practice area who can help you through the entire transaction or litigation process. Visit the Super Lawyers directory to find a lawyer or law firm specializing in real estate law.

Real Estate Attorney FAQs

Below are some helpful questions homeowners or other potential clients might want to consider when meeting with an attorney:

What is your experience in handling real estate cases similar to mine?

Asking this question can help you understand the attorney’s expertise and familiarity with cases like yours, which can be crucial for complex real estate issues.

Understanding how the real estate attorney charges for their legal services—whether it’s a flat fee, hourly rate, or contingency basis—and any other potential costs, such as court fees or transaction fees, is important for financially planning your legal representation.

This question allows you to begin gauging the possible solutions or complications that could arise in your real estate transaction or litigation and to set realistic expectations regarding outcomes and timeframes.

How will you communicate updates and developments in my case?

It’s helpful for clients to know how often and through what means—email, phone calls, text messages, in-person meetings—the lawyer or their staff will update them about their case. This helps build trust and reduces the chances of miscommunication.

What are the next steps if I decide to hire you as my real estate attorney?

While the attorney will likely take the lead on addressing this issue, asking this question helps clarify the immediate actions that will be taken once the attorney-client relationship is established, ensuring that you know how to proceed.

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