The real estate market has been in the news for months now. The combination of pent-up demand for real estate and a scarce supply of real estate, has sent prices through the roof. Median existing-house prices reached an all-time record this June. What the media does not discuss is that in order for all these real estate deals to go through, they have to follow certain regulations. Interpreting those regulations and ensuring that either party adheres to them, is the business of a real estate lawyer. The other boom in this market is for the services of real estate lawyers, who help their clients navigate through federal, state and local laws governing the use and exchange of real estate. In this article, I will make a case for why you should study real estate.
What is Real Estate Law and What Do Real Estate Lawyers Do?
Real estate law, which refers to the laws around undeveloped and developed property, is a fascinating branch of law. It tells us who has the right to occupy a specific area, how long they can do so, and what use they can put that property to. It deals with the rights of landlords and their tenants. It tackles issues of the preservation of historical sites, the protection of the environment, construction safety and making properties accessible to those with disabilities. It also deals with the penalties for not meeting obligations such as mortgage payments or rent. Penalties range from eviction to foreclosures.
Real estate law often places restrictions on the use a property owner can put a property to. For instance, just because you own your house does not necessarily mean that you can convert it into a motel. Such laws are guided by the need to balance your rights with those of your community. Consequently, restrictions are placed where it is felt that certain use-forms would lead to negative outcomes for the surrounding community. So when you hear about how something will create an eyesore, or that it will obstruct views of some natural scenery, or that it will endanger the community, for example, through pollution, you should know that these debates arise from that balancing act. This balancing act is reflected in the tension between the rights of homeowners association and co-op or condo boards and residents and property owners. The law tries to balance the needs of each such that owners and residents can enjoy the use of a property without hurting their communities. Obviously, each side may interpret what this means differently. This makes the field very exciting and also incredibly important.
Where you stay, or work or go for recreation is governed by real estate law. The streets you walk or drive on, the shopping malls you shop at, all these places are governed by real estate law. Real estate law even covers a certain portion of airspace. You see, when you buy property, you also buy the rights to the airspace above that property, up to a certain limit, defined by state law.
Real estate lawyers often specialize in either commercial or residential real estate law, though many offer a combination of services. Some lawyers will specialize in certain aspects of real estate law, such as contracts and the drafting of other documents such as deeds, litigation, and the negotiating and facilitating of transactions.
Real estate lawyers will often be called upon to interpret zoning ordinances as well as building codes. These are the regulations which govern what use a property can be put. For instance, in a city’s commercial centre, business activity is permitted, whereas in residential areas, homes can be built. They may be asked to help their clients with the legal ramifications of financing a real estate transaction using some method or vehicle. They may even help to create a vehicle, such as a joint venture partnership, to secure financing for a real estate transaction.
Often, they are well versed with an area’s tax regime and can help their clients minimize their tax bill. If a real estate deal can no longer proceed, a real estate lawyer will be able to restructure the deal in a way that makes it possible to continue, assuming both parties want it to.
Job Opportunities for Real Estate Lawyers
The overall market for real estate lawyers depends a lot on the broader economy. In other words, as well as on the type of real estate law. For instance, in times of economic recovery growth, there will be a big demand for real estate lawyers in general, to work on things like leases, deeds, negotiating and facilitating contracts, and financing real estate deals. In times of economic distress, the demand for real estate lawyers may fall, but some classes of real estate lawyers may experience a rise in demand. For instance, there may be a need for people to restructure real estate deals as financing falls through. There will be a need for real estate lawyers who work on foreclosures. How the market impacts your job opportunities really depends on the kind of real estate law you practice and the economic conditions at the time.
According to ZipRecruiter, the average salary for an entry-level real estate lawyer is around $77,000. At the state level, there will be a great divergence from state to state, from the national average. Because the market is so fragmented, there will also be a large difference in compensation between lawyers who work for small firms and those who work for Big Law.
In this current climate, with housing prices going through the roof, the demand for real estate lawyers is rising. Even without this surge in housing prices, as we have noted, there is a demand for real estate lawyers across economic cycles. Even in times of economic recovery and growth, there is still a need for real estate lawyers who understand foreclosures, restructuring deals and other such activities normally associated with depressed markets. The same goes for times of economic distress. There will still be people buying homes, needing to raise funding for real estate deals, and other such activities typically associated with periods of economic recovery and growth. As you will discover here, the risks involved in real estate development mean that real estate law is truly a field for all seasons.