Should I Have My Own Attorney for Residential Real Estate Transactions?

house-for-saleBuying a home will probably be the largest and most significant purchase you will make in your life. Having an experienced real estate attorney who will protect your interests can help you avoid problems with a home purchase or sale.

Residential real estate transactions involve the law of real property, which is unique and can involve issues that require an experienced real estate lawyer who is trained to deal with these problems.

If you’re selling your home and using a real estate agent, you’ll be asked to sign a brokerage contract which may be a standard form that might require certain provisions that aren’t suitable or does not cover unusual circumstances. In addition, these contracts determine who is liable to pay the brokerage commissions. Having an attorney review the brokerage contract before you sign is a good idea.

While the home is being marketed, real estate agents, representing each party, typically handle negotiations between the buyer and seller. Once an informal agreement is reached, buyer and seller enter into a purchase agreement, which is the formal written contract of the sale.

Even the most straightforward real estate transaction involves a large number of documents, all of which should be thoroughly reviewed by an attorney before you sign to ensure that the final documents accurately reflect what you’ve agreed to.

Most buyers need to finance the purchase with a mortgage. The legal commitments required for certain mortgages can be complex. In some cases, purchase agreements contain requirements to protect sellers that require the buyer to obtain a commitment for financing the purchase. Your attorney can review loan documents and explain the important provisions of the documents before you sign.

Your attorney can also verify that the property title is clear. The property title is searched to satisfy the lender and the buyer. Finally, the property is transferred from the seller to the buyer, and the seller receives the purchase price bargained for in the contract.

It’s not uncommon for issues to arise during a home inspection or final walk-through of the property. What happens if a buyer has an inspection of the property that uncovers problems with termites, asbestos or radon? What are the legal consequences if the closing does not take place? What happens to the down payment?

The closing is when the purchase and sale transactions are completed. The deed and other closing papers are signed and the title for the property passes from seller to buyer. Even at this late stage in the transaction, it’s not unheard of for issues to arise. There could be discrepancies in the final closing cost statement, required documents can be missing or the other party may attempt to change the agreement at the last minute. Having an experienced real estate attorney will help to protect your interests and resolve any problems.

Responding to Cell Tower and Similar Lease Offers

By: Jennifer Denchak Wetzel, Esquire

Responding to Cell Tower and Similar Lease Offers

Since agricultural land, almost by definition, is located in rural, sparsely-populated areas across the state, often in townships with loose, or even no, zoning requirements, many such landowners will be approached by a telecommunications company to lease a small portion of their land to construct a cellular tower and related equipment. Like the real estate market in general, location has a significant impact on the market rental price, with some geographic areas seeing significantly higher rental amounts. Having a proposed cellular lease negotiated and reviewed by an attorney who is familiar with these types of leases and aware of market values can be very important for ensuring fair terms and compensation for the landowner.

The standard lease presented to a landowner is written from the perspective of the cellular company tenant. It likely does not provide for the best rental payment and escalator, a signing bonus, payment of attorney fees for lease review and negotiation, and/or payment of a portion of the revenue received by the tower company for additional carriers that co-locate on the site. Further, if the property is enrolled in the Clean and Green program, the lease needs to contain language that requires the cellular company to cover any roll-back taxes attributable to the non-agricultural use of the property.

Agricultural landowners statewide have been, and continue to be, approached by telecommunications companies with leasing opportunities. In the counties bordering Philadelphia, telecommunications companies have entered into agreements with landowners to either lease space on an existing silo for placement of their antennae or to actually assist with the process and cost of constructing a silo for this purpose. In northern and central parts of the state, sites are often selected on the tops of wooded mountains. An optimal site in western Pennsylvania saw the use of a mobile temporary tower for immediate operation. No two telecommunications leases are exactly the same.

If a cellular company needs coverage in your geographic area, and if your site is preferable for any number of reasons, such as elevation, lack of other viable alternatives, preferable zoning requirements, etc., you will have a significant amount of bargaining power, and do not need to settle for the initial lease terms offered by the tower company. Since the duration of the standard cellular tower lease is approximately thirty (30) years, it is important to arrive at lease terms that will benefit the landowner into the future.

Aside from telecommunications leases, agricultural landowners are also often approached by companies to lease portions of their property for other purposes such as wind energy and solar energy. Most of the same concepts apply to the negotiation of the leases associated with these non-agricultural uses.

The attorneys at Mette, Evans and Woodside have experience representing landowners in the review and negotiation of lease agreements for all of the above-mentioned purposes, and are available to assist you in that regard.

Gaining Access to Landlocked Property After O’Reilly Case

By: Paula J. Leicht, Esq.

Gaining Access To Landlocked Property

For property owners whose property does not adjoin a public road and does not have access thereto either through an express access easement or easement across adjoining property by implication involving a common owner in the chain of title, the Private Road Act (the “Act”) of June 13, 1836 P.L. 551 as amended, 36 P.S. §§ 1781-2891, offered the landlocked property owner a remedy.

Since the Act was adopted in 1836, the owner of landlocked property could petition the court of common pleas in the county where the property is located for a Board of Viewers to lay out a road on adjoining properties for access to a public road for the landlocked property. The damages for same as determined by the Board of Viewers would be paid by the landlocked property owner.

Several recent appellate court cases on the subject, however, have called into question the constitutionality of this remedy and its availability to redress the problem. The argument goes that a petitioner must establish that the public be the primary and paramount beneficiary of the opening of the road to the landlocked property, otherwise the taking of another’s property for an access easement would in effect be an unconstitutional taking of another’s property in the absence of a public purpose.

The original case which brought us to this end is In the matter of: Opening a Private Road for benefit of O’Reilly, 954 A.2d 57 (Cmnwth., 2008) (the “First O’Reilly Appeal”). In this First O’Reilly Appeal to Commonwealth Court, the Commonwealth Court upheld the Court of Common Pleas of Allegheny County in determining that the Act is constitutional for many reasons, including the long history of the Act’s use to provide an access remedy for truly landlocked parcels. The Commonwealth Court held that the opening of a road to an otherwise landlocked property serves a public purpose because “otherwise inaccessible swaths of land in Pennsylvania would remain fallow and unproductive, . . . making the land virtually worthless and not contributing to commerce or the tax base of this Commonwealth.”

The parties whose land would be taken for the private access road appealed the First O’Reilly Appeal to the Pennsylvania Supreme Court, 5 A.3d 246 (2010) (the “Second O’Reilly Appeal”). The Pennsylvania Supreme Court sent the case back to the Commonwealth Court to “determine whether the public may be fairly regarded as the primary and paramount beneficiary of a taking under the Act.” Following a further remand by the Commonwealth Court, 22 A.3d 291 (Cmnwth., 2011) to the Court of Common Pleas of Allegheny County to develop additional evidence, the Court of Common Pleas concluded that the petitioner did not establish that the public would be the primary and paramount beneficiary of the O’Reilly application. The petitioner appealed this decision to the Commonwealth Court in the Third O’Reilly Appeal, 100 A.3d 689 (2014), which upheld the lower court’s last conclusion, i.e., that the public benefit was not established in this case.

In conclusion, the above series of appellate cases, although not outright determining that the Act is unconstitutional, certainly will make any future petitioner’s case for access to landlocked property over land of another a very difficult one to win. This result may affect members of the farming community because very often historically agricultural lands were conveyed together with a wood lot on the nearby forested hills, parcels which were not necessarily contiguous to the agricultural lands and parcels for which access easements to a public road were not granted.

Pipeline Right of Way Protection for Landowners

by Mark S. Silver

Pipeline Right Of Way Protection For Landowners

If a pipeline company has contacted you to install a pipeline on your property, you should contact an attorney experienced in this type of work. The process can be confusing and intimidating. Typically, pipeline companies will make repeated telephone and mail contact in an attempt to obtain signatures on documents that may contain provisions that are not fair to you. The landowner should insist that language protecting their rights is included in the written document. If it is not, there are no protections.

Experienced legal counsel can draft comprehensive revisions to documents and propose construction specifications to provide protections for the landowner.

Issues of full just compensation for the easement and its impact on remaining property are critical and best addressed by legal counsel who, together with an appraiser, can provide documented support for the compensation amount sought to be paid.

If you would like to better understand your rights and options, please contact Mark Silver, Esq. at (717) 232-5000 or at mssilver@mette.com.

Tax Assessment Appeal

by Mark D. Hipp and Brian J. Hinkle

Tax Assessment Appeal

Tax assessment appeal deadlines for Pennsylvania counties are quickly approaching. If you own commercial real estate, or if you are a tenant who is responsible for payment of real estate taxes, you may be entitled to a decrease in real estate taxes.

We are well prepared to assist commercial real estate owners, as well as tenants who are responsible for paying real estate taxes, evaluate whether an appeal should be filed. Fees can be hourly or on a contingency basis. Any individual or business with an interest in commercial real estate interested in discussing the prospects of an appeal should contact us immediately.

This article does not constitute legal advice and the transmission of information contained herein is not intended to create, nor does its receipt constitute, an attorney-client relationship between Mette, Evans & Woodside and the recipient.

What To Do when Faced with Eminent Domain

by Mark Silver

Faced With Eminent Domain

Q: I have received notification that my property is to be taken for public use; what do I do and what are my rights?

A: The answers vary depending on the type of property to be taken (residential; commercial; industrial; development; agricultural, etc.); the entity seeking to acquire the property and the expressed purpose; whether the taking is partial or total; whether there are structures or site improvements contained within the area of taking; if a business is involved whether the taking will interfere with its continued use and operation, and other factors specific to the property involved and the taking plans.

Both the United States Constitution (Amendment V) and the Pennsylvania Constitution (art.1, Sec. 10) provide: “…nor shall private property be taken…or applied…for public use, without just compensation…”. It is the quest for just compensation that requires assistance of experienced counsel early in the proceedings to seek to address issues that arise from the acquisition of part or all of the subject property that may include in addition to just compensation for the actual area of acquisition the recovery of specific statutory benefits for which the condemnee may be eligible.

The earlier the condemnee makes contact with counsel, the better. First, it must be determined that the taking is legal, and not subject to objections. Then the property must be inspected to determine existing conditions; plan revisions considered; a real estate appraiser and engineer, if necessary, employed…all to review current conditions and the relevant taking plans, to determine the impact of the taking, and if not total, the effect the taking will have on the remaining property (severance damage). Factors such as relevant zoning; availability of public/private utilities; access; topography; visibility, and the like are critical to the full understanding of the property, its current and potential highest and best uses, and how it may be impacted by the taking.

The Condemnee is to be paid “just compensation”, defined in the Pennsylvania Eminent Domain Code to: “…consist of the difference between the fair market value of the condemnee’s entire property interest immediately before the condemnation and as unaffected by the condemnation and the fair market value of the property interest remaining immediately after the condemnation and as affected by the condemnation”. Although the words that comprise the definition of “just compensation” in the Pennsylvania Eminent Domain Code seem straightforward, the experience and insight of counsel, the appraiser, and when necessary an engineer, can serve to identify and quantify elements of damage not initially appreciated, but compensable in accordance with applicable law.

Counsel can also serve to identify claims in addition to “just compensation” for which the condemnee may be eligible that may include interest; limited reimbursement of professional fees; moving and related expenses; business reestablishment expenses; replacement search costs; rent loss; and others where the facts and governing law so provide. In certain residential taking scenarios, the condemnee may be entitled to a replacement housing supplement; increased mortgage interest differential payment; and payments for title search, transfer tax, and other closing costs, in addition to moving expenses.

Pennsylvania law does not currently provide compensation or reimbursement for business loss or loss of business profits. Business Dislocation Damages; however, may be payable in certain circumstances (for example: where the taking is total and a business not part of a chain of three or more similar establishments is taken along with the real property), are limited to a maximum of $60,000, and are dependent on tax returns.

It is noteworthy to mention that the process of obtaining full and comprehensive just compensation for any taking, whether total or partial; residential, commercial, or otherwise; is time consuming and can include many legal, engineering, and appraisal issues not immediately obvious or known to professionals who do not have experience in this type of work.

Should you wish to discuss issues of importance to you that are involved in a taking of your property, I would be more than pleased to review them with you.

Mark S. Silver
717-232-5000
mssilver@mette.com

Stormwater Management – The New Burden on Property Owners

stormwater_runoffIt used to be the rule that rainwater runoff was not the responsibility of the landowner. The law recognized that water runs downhill. No longer. As EPA and the Pennsylvania DEP increase their emphasis on reducing pollutant discharges to the Chesapeake Bay, landowners are facing two challenges with regard to this previously minor concern.

First, any development of land that increases impervious surfaces (roofs, sidewalks, parking lots) is now heavily regulated. The rules now require that runoff after development be no greater than it was prior to development. DEP regulations require that the developer obtain a “discharge” permit for stormwater and contractually agree to limit runoff in perpetuity. And, to make things more challenging, mere storage of runoff in traditional stormwater basins, where it will evaporate or gradually soak into the ground, is no longer acceptable. Considerable engineering work now must be done to actively inject stormwater into the ground. The long term consequences of these new, unscientific requirements remain to be seen.

If you already own developed property you’re not off the hook. Municipalities are already being required to reduce their stormwater discharges and looming on the horizon is the threat of requiring treatment of stormwater. To address these issues, and to pay for them, municipalities are beginning to tax properties based on their stormwater runoff potential. Several Pennsylvania municipalities have already implemented a stormwater tax, and many more are considering it.

The purpose of the tax is two-fold: help pay for the unfunded mandate from EPA and DEP to reduce quantity and improve quality of municipal stormwater, and incentivize property owners to reduce their runoff into the municipal stormwater system. Many innovative solutions are being developed to help property owners cope with these new requirements, including pervious pavement, stormwater retention technology, and even “green” roofs.

Hence, whether you are buying property with an eye toward development; planning to further develop property you already own; or own commercial property with impervious surfaces, stormwater management should be near the top of your to-do list.

Flood Insurance Reform Act

by Paula Leicht

Flood Insurance Reform Act

Homeowners in flood prone areas will face increases in flood insurance premiums under provisions in the Biggert–Waters Flood Insurance Reform Act of 2012 (the “Act”), certain provisions of which went into effect October 1, 2013. For homeowners in designated areas, the National Flood Insurance Program provided federal subsidies for flood insurance premiums for flood prone properties since 1968. The purpose of the National Flood Insurance Program was to enable homeowners in flood prone areas to purchase flood insurance which was unavailable from private insurance providers.

In recent years, many more claims were made than were covered by the premiums paid. The Act was a response to address the losses to the National Flood Insurance Program from the increased number of claims. Many mid-state residents with homes on the New Jersey, Maryland or Delaware shores will likely see their flood insurance premiums rise as much as 25% per year until the rates are adjusted to accurately reflect the current risk of flood to such property. The Act requires that the increase to premiums in Special Flood Hazard Areas for renewal policies rise up to 25% per year until they meet full-risk premium rates.

The foregoing rate increases are applicable to renewal rates on existing properties. If you are planning to purchase a property in a flood prone shore area for which you will want to purchase a flood insurance policy, investigate the premiums for a new policy as the premiums will not be “grandfathered.”

A number of bills have been introduced in the United States Congress to delay the imposition of the rise in flood insurance premiums under the National Flood Insurance Program although such changes to the Act are uncertain.

Oil and Gas Act – Municipal Zoning Limitations

by Paula Leicht

Oil And Gas Act - Municipal Zoning Limitations

On February 14, 2012, the Unconventional Gas Well Impact Fee Act (Act 13 of 2012) which amends Title 58 (Oil and Gas) of the Pennsylvania Consolidated Statutes was signed into law by Governor Corbett. This Act among other matters required municipalities to amend their land use ordinances to allow unconventional gas wells, such as those associated with extraction of natural gas from the Marcellus Shale formation, as a permitted use in every zoning district and their related facilities in nearly every zoning district (58 Pa. C.S. §3304). The definition of oil and gas operations also was expanded to include construction, installation, use, maintenance and repair of oil and gas pipelines, natural gas processing plants or facilities performing equivalent functions and all equipment directly associated with the foregoing activities.

Under the Act, there are certain permissible limitations on the location of oil and gas operations within residential zoning districts. For example, a local zoning restriction may prohibit wells or well sites within a residential district if the well site cannot be placed so that the wellhead is at least 500 feet from any existing building. The well site may not be located so that the outer edge of the well pad is closer than 300 feet from an existing building in a residential district and oil and gas operations may not take place within 300 feet of an existing building. Impoundment areas for oil and gas operations also are permitted in all zoning districts provided that the edge of an impoundment cannot be located closer than 300 feet from an existing building.

The Act further provides that natural gas compressor stations must be authorized as a permitted use in agricultural and industrial zones and as a conditional use provided the compressor building is located at least 750 feet from the nearest existing building or 200 feet from the nearest lot line, whichever is greater and the noise level cannot exceed a noise standard of 600 dbA at the nearest property line or the applicable standard imposed by Federal law, whichever is less.

Other than the principal exceptions outlined above, among other lesser limitations, municipalities are preempted from regulating oil and gas operations as defined in Act 13 of 2012 (58 Pa. C.S. §3302).

In response to the above limitations on the ability of local government to regulate the location of oil and gas operations within their jurisdictions, a number of municipalities filed a Petition for Review with the Pennsylvania Commonwealth Court on March 29, 2012 challenging the constitutionality of state preemption of local regulation and, in particular, zoning regulations under Act 13.

The Commonwealth Court in an order dated July 26, 2012 held that Section 3304 of the Act which, in effect, requires a municipality to violate its comprehensive plan for growth and development violates substantive due process because it does not protect the interests of neighboring property owners from harm, it alters the character of the neighborhood and it makes zoning classifications a nullity as it requires a municipality to allow in all zones, drilling operations, impoundments, gas compressor stations and related facilities.

The Commonwealth was permanently enjoined from enforcing this Section 3304 and most of the remainder of Chapter 33 of the Act. The Commonwealth among others filed a Notice of Appeal of the Commonwealth Court’s decision with the Pennsylvania Supreme Court on July 27, 2012. Stay tuned for further developments in this very significant case.

Contractor Guidelines

Contractor-GuidelinesThe Pennsylvania Home Improvement Consumer Protection Act is designed to protect homeowners from unscrupulous contractors and to establish penalties against contractors who violate the Act. A year later, some legitimate contractors still do not know the requirements of the Act or whether they are violating the Act in the way they do business.

Pennsylvania Home Improvement Consumer Protection Act