Morris Law Center
Weird and Common Legal Issues in Real Estate: An Interview with Darcy Dauderis
This is part of an interview between Sarah Morris and Darcy Dauderis, transcribed from an episode of Around the Gavel by Morris Law Center.
What is the most unusual issue that you’ve seen in your real estate career and illegal issue related to real estate?
So, um, the, there are two that are, you know, this year issues that have come up. One is, um, you know, the, I think the intricacies of probate and, um, as the buyer’s agent being certain that you understand the process well enough to make up for any, um, lack of information. The listing agent might have, um, because in, in, in this particular instance, um, being told as the buyer’s agent that probates complete and the sale is approved and not knowing underneath that, that that wasn’t actually the case and that there were, you know, liens, IRS liens in particular that needed to be handled and can’t even be released, not even a pay-off could be released until the probate was approved. And I think it’s really important for agents on both sides to know what questions to ask around that. Um, because the, the sellers gone and um, their executors don’t necessarily know the questions to ask and the buyers certainly don’t know.
Um, they are, they’ve just got their move date and they’ve given their notice that their rental and they’re ready to move and delays are difficult to, to stave off when you’re waiting for it, it’s going to be delayed if you don’t have everything in line. And so I think that was a really interesting, um, situation where I think sometimes the assumption is the listing agent has all that handled because they’re the one that took him on a probate listing to begin with.
The other is around, um, you know, solar leases or power purchase agreements and um, either as the buyer’s agent or the listing agent, knowing what questions to ask, who to talk to, to start that at the very beginning of the transaction to make sure it doesn’t hold up closing, um, that the buyer understands they have to have their credit checked in a lot of instances, it has to qualify with their lender. It’s all of those pieces and then educating sellers about, you know, um, having all of that documentation at the outset before you’re ever live on the market because that too can delay the process.
Yeah. It’s funny you bring up the solar panels because I just last week was dealing with the transaction as the lawyer. Sure. A realtor at least with option to buy. Okay. There’s a solar panels that are being leased on the property. I, I looked, but I’m going to ask you while we’re here, there’s no forms on solar panels, right?
No. No there’s not. There’s um, depending on who is the, who the provider is, right. Um, I’ve been seeing most recently power purchase agreements rather than leases. Okay. And I was, um, my solar expert that I was actually consulting with this morning told me that the only real difference in the two documents is that the power purchase will fluctuate based on what you’re producing from the panels that then you pay for as the owner or the, the person that’s in the home that has the panels, right. Cause you don’t own them. Um, versus the lease where they’ve estimated that you’re going to produce X amount throughout the year and they evenly divided that lease payment into 12 monthly installments. And I just think it’s fascinating and it’s certainly an area that I want to get more knowledgeable about because we are, you know, sunshine pretty much all the time. And how that, how that works for the homeowner and the, and the new buyer in terms of really being able to explain this isn’t based necessarily on your usage, but on your production that you’re actually paying for your production. Where with the energy company you’re paying for your usage and tying those together and how it works with the sun cycle. I mean, it, it’s quite something so, okay. Almost like the Zodiac of energy.
Yeah. I mean that’s why I was surprised at some point the Greater Las Vegas Association of Realtors will have to have some forms for having solar panels. I’m surprised they don’t. Yeah. Just cause when I was reviewing documents, I didn’t see anything.
The only place where there’s even really a place to designate anything is in the listing agreement. There is a section where, you know, it’s one of the questions we’re asking the seller is do you have solar panels? Are they owned or leased? Well, there’s not a place to even say, is it a power purchase agreement? There’s just owned or leased. And so even as you’re putting that listing in the MLS as the realtor, your words count because it’s saying it’s a lease with no payments. It’s really not. And that was, you know, on my part that was wow, this really isn’t a lease. And if you don’t have all that paperwork upfront, you don’t even know what your, what your client thinks they’ve got. They just know their bills are better than they used to be. They don’t necessarily know what they’ve agreed to for the next 20 years, whatever it is and what that looks like when you sell the house.
So, what is the most common legal issues you see with real estate?
Most common I think is um, consumers not knowing how they want to hold title. I think it comes up, you know, it’s a question that gets asked by the escrow when they fill out their buyer information or sellers. Obviously they’ve already made that decision at some point, either by default or consciously. Um, but really being able to, for me, being really clear with clients that that’s something you should speak with your attorney or CPA about or both you know, not advising on that. But, um, you know, particularly if the, the loan is only being put in one person’s name and who’s going to quit claim off of what and back onto things. And so, um, I think that’s, with every transaction it’s not, there’s, there’s a few clients that know absolutely joint tenants with right of survivorship and you know, that’s what we want. And, um, and there’s always the funny, you know, at, at the signing of why do they have to Sam, you know, an unmarried woman. Yeah. Cause it looks very judgy on paper. And then the other is sort of the, who pays for what? And while it’s not necessarily a legal issue, it doesn’t get there. There’s not a lot of understanding on people’s part about like, why do I have to pay for title insurance? Why does the lender require that? Why? And so sort of just the mechanics of, of who pays for what I think is well, shouldn’t they be, you know, like I’m giving them, I’m giving them the privilege of buying my home. They shouldn’t, they pay for everything.