Do you need an attorney to buy investment real estate? That’s a question I get asked a lot. The honest answer is no, you don’t have to. But it is a very good idea to have one.
The reason is simple. There are several key functions an attorney can provide in a real estate purchase that a title company alone cannot. When you understand what those functions are, it becomes clear why having an attorney on your side is often worth it.
Reviewing Title and Legal Issues
One of the main roles an attorney plays in a real estate closing is making sure the title passes free and clear. This can be more complicated than it sounds.
There are situations where liens were never properly recorded. Sometimes, property boundaries are unclear. Other times, easements exist that raise questions about how the property can be used. These issues do not always show up neatly on the surface.
An attorney is trained to identify and address these problems before they become yours. That extra layer of review can prevent costly surprises after closing.
Reviewing Loan Documents
Another important reason to consider legal help when asking if you need an attorney to buy investment real estate is financing. Whether you are using traditional bank financing or seller financing, loan documents matter.
An attorney can review those documents, explain what they actually mean, and help you understand where your risks are as a buyer. This is especially helpful if the structure is unfamiliar or if the terms are not standard.
Having someone who can answer questions and advocate for your interests can make a significant difference in how comfortable you feel moving forward.
Preparing and Reviewing Closing Documents
Both title agents and attorneys prepare closing documents, but attorneys often go further in reviewing how those documents fit together legally.
This includes documents such as:
- deeds
- assignments of rents
- other instruments required to transfer ownership properly
An assignment of rents, for example, allows the right to collect rent under leases that were written in the seller’s name to transfer to you as the new owner. Making sure these documents are done correctly is essential to a smooth transition after closing.
Reviewing LLC Ownership
One area where attorneys are especially valuable involves ownership structures. Many investment properties are owned by LLCs with multiple members. Over time, those ownership structures can change.
Sometimes an owner passes away. Sometimes partners separate or divorce. In these cases, the original LLC documents may no longer reflect who actually has the authority to sell the property.
An attorney can dig through operating agreements, amendments, and other records to confirm that the person signing the deed is legally permitted to do so. This type of review protects you from buying a property from someone who does not have the authority to sell it.
Reviewing Leases
Leases are another area where legal review can be critical. Some leases are complicated. Others are simply poorly written.
An attorney can review leases and identify clauses that could cause problems for you after the purchase. This might include unusual renewal terms, unclear responsibilities, or provisions that limit your flexibility as the new owner.
Catching these issues before closing gives you the opportunity to renegotiate or at least go into the deal with your eyes open.
Final Thoughts
So, do you need an attorney to buy investment real estate? No, it is not required. But having one can add meaningful protection throughout the process. From reviewing title issues and loan documents to confirming ownership authority and evaluating leases, an attorney covers areas that are easy to overlook.
Many investors we work with appreciate having that extra layer of guidance when buying or selling property. If you are considering an investment real estate purchase in Pennsylvania or Maryland, contact us to discuss how to structure your transaction and assemble the right team to support it.
