When you decide to invest in real estate in Milwaukee, you may face various legal issues that you should have answers or solutions for. Buying income properties should involve more than simply conducting financial and market analyses. Some of the top legal issues to watch for when buying investment property include zoning/land use, title issues, landlord-tenant laws, building codes, and real estate taxes.
Zoning and Land Use Regulations
When buying property to develop into a specific use, you must first understand the zoning and land use regulations applicable to the piece of property you wish to buy to know whether you can use the property in the ways you plan to. For example, you may run into legal troubles if you wish to develop a mixed use or commercial property on a parcel located in a residential zone, as the zone may not permit commercial uses as of right. Similarly, zoning laws may prohibit you from developing multi-family properties in areas zoned for single-family residences. Developing a property for a use not permitted in the zoning district will require you to obtain a variance from the city government, a costly process that may ultimately prove unsuccessful. Understanding the zoning map in Milwaukee can help you identify properties suitable for your investment and development objectives.
Title and Ownership Issues
The due diligence process when buying investment property should include conducting a title search to confirm that the seller has marketable title and to uncover any liens, easements, or potential clouds on the property’s title. Properties located in older, more developed areas of Milwaukee may have a greater chance of title issues, such as breaks in the chain of title, easements belonging to the city government or neighboring parcels, or party wall agreements for adjoining structures. Buyers can protect themselves from title issues by purchasing title insurance, which can help cover legal costs incurred to resolve such issues.
Landlord-Tenant Laws
When buying residential investment properties, you should familiarize yourself with Milwaukee’s landlord-tenant ordinances and state landlord-tenant laws to understand your rights and obligations as a landlord. State and local laws may afford residential tenants various protections and rights, particularly with respect to security deposits, habitability standards, and eviction procedures. Violating tenant rights may subject you to significant financial liability in the form of fines or court judgments when tenants file lawsuits.
Building Code Compliance
Purchasing investment properties will require you to ensure that existing structures or new buildings you construct meet state and local building codes. When buying an already developed property, you should insist on building inspections that may reveal potential legal issues, such as unresolved code violations or unpermitted renovations/additions to structures. Older buildings may also face legal issues related to various environmental safety standards, including when structures contain lead paint.
Property Taxes
Finally, evaluating investment properties should include understanding the property tax liabilities you will face when you own the property and how those liabilities may affect your investment returns. In particular, you should consider the risk that the city may undertake a special assessment of a property you buy, which may dramatically increase property taxes. You will also need to consider how any further development of the property you undertake will affect tax assessments. Additionally, you should also review public records to check whether a property has existing tax liens, which you may need to satisfy if you purchase the property.
Contact a Real Estate Attorney Today
Before you buy investment property in Milwaukee, you should consult an experienced lawyer to learn more about the legal issues you need to remain cognizant of. Contact Farrow Legal today for an initial consultation with a real estate attorney to discuss the concerns you should have when purchasing investment properties.