How to Spot Unfair Terms in Real Estate Agreements
Picture this, you’re looking forward to buying or renting your first home, apartment, or a cozy spot for your brick-and-mortar store. However, after reviewing your purchasing agreement or landlord’s contract, you notice some alarming clauses. This includes auto-renewals, arbitrary price variations, and unlimited indemnity. Unless you know better, you might fall prey to these unfair terms in real estate agreements and step into a world of problems.
According to the latest Housing Vacancy Survey, the number of renter households increased by more than 870,000 to reach 44 million in 2021 and the number of homes for sale decreased. But with homes rising in demand, predatory real estate agreements are an unfortunate reality. They range from outright scams to borderline illegal provisions.
To protect yourself from unfair terms, contact the real estate attorneys at Mazzoni Valvano Szewczyk & Karam for help.
Watch Out for These 5 Unfair Terms in Real Estate Agreements
The real estate agreement is the cornerstone of the relationship between buyers and sellers or landlords and tenants. But exploitative terms can be used to prey on people unaware of their rights. The only way to protect yourself is to identify the red flags before signing the dotted line. Here are five unfair terms in real estate agreements to look out for.
1. Unusually Large Deposit
When buying a house, you need a down payment. It’s similar to moving into a new apartment, where you’ll likely have to pay a security deposit. In either case, there are amounts that are appropriate and some that are not. You agree to a down payment ahead of time, so you need to make sure no changes have been made to any contract demanding something different in the down payment, interest rate, or anything else. With a lease, you want to make sure things like your security deposit are never more than several month’s rent and that you’re promised that money back.
Remember, there might be restrictions on how much a landlord can charge you for a security deposit based on where you live. For example, landlords in Pennsylvania can charge no more than two months’ rent as a security deposit. After that, they must only charge the monthly rent. With home purchases and interest rates on loans, there are no laws restricting your interest rates in Pennsylvania. This means it’s even more important to make sure there are no hidden clauses where your interest rate rises beyond what was originally agreed upon.
2. Unnecessary Pressure to Sign
You may be pressured to sign an agreement quickly without giving it a proper read. They might tell you they have other people interested in the property or they have an urgent appointment lined up.
If this happens to you, don’t let yourself be rushed. Take your time to review the real estate agreement and ask questions. See if you can spot any other unfair terms that don’t fit your needs. The goal is to ensure you understand and are comfortable with all the clauses before signing.
Also, beware of oral transactions. Never trust a real estate agent, landlord, or listing agent who asks you to ‘trust’ them. All terms of your real estate agreements should be in writing to protect all parties in the long run.
3. Unrestricted Fees
Predatory real estate agreements are notorious for tacking on additional fees that aren’t standard. For instance, new homeowners and renters can be asked to pay:
- Convenience Fees: Fees for paying your rent by credit card.
- Move-in Fees: Fees that cover any damage to the rental or home while you’re moving in.
- Internet/Telecom Fees: Set fees for internet or phone services, even if you use a separate provider.
- Common area maintenance Fees: Fees for repairs to large common areas.
These fees, although technically legal, can impose a substantial financial burden on you. You must challenge any fees you believe to be unwarranted.
You should never have to pay any occasional expenses in the real estate purchase process or unanticipated increases in rent. Talk to a Pennsylvania real estate attorney if you’re confused about what you should/shouldn’t be charged for.
Consult an Experienced Pennsylvania Real Estate Attorney Today!
As you know, buying a house or signing a lease are huge financial commitments. Unfortunately, loaners and landlords can often force or trick trusting people into a tight spot. That’s why you should read your real estate agreement carefully, be alert to possible red flags, and ask questions until you’re satisfied with the answers. Hopefully, these examples of unfair terms in real estate agreements will help you recognize and steer clear of a bad deal.
Have any more real estate-related queries? The team at MVSK Law will be happy to answer them. Our team of Pennsylvania real estate attorneys offers a full range of services, including sales and acquisitions, leasing agreements, property issues, development, and financing. We’re here to help you every step of the way. For more information, give us a call today.