real estate closing attorney danbury ct

Do I Need a Real Estate Closing Attorney to Sell My Home?

Selling a Home in CT? You Need a Real Estate Closing Attorney

If you are looking to sell your home, you may or may not want to hire a real estate agent, but you will definitely want to hire a real estate closing attorney. While the marketing of your home to potential buyers is something you might be able to handle yourself, the services of a seller’s real estate closing attorney are essential to a legally compliant real estate sale.

What does a seller’s real estate closing attorney do?

A seller’s real estate closing attorney provides many services to the Seller that legally legitimize the sale and make it binding, while at the same time protecting the liability and financial interests of their client. A seller’s real estate closing attorney performs the following closing tasks:

  • Reviews Exclusive Right to Sell Agreement and Dual Representation Waiver with real estate agent/broker (if hired early enough);
  • Reviews and assists with Listing and Mandatory Disclosures (once again, if hired early enough);
  • Negotiates with buyer’s attorney and drafts Purchase and Sale Contract;
  • Works to resolve any inspection, appraisal or title issues to meet buyer’s needs;
  • Prepares closing documents such as power of attorney, Deed and affidavits;
  • Obtains payoff statements for outstanding liens or mortgages;
  • Attends the closing with, or on behalf of, the client;
  • Handles cash flow in escrow, receiving purchase funds and making any payments or disbursements; and
  • Secures and records releases for mortgages after closing.

When issues arise in real estate deals it is the attorneys that defuse situations and save deals by coming up with solutions that are acceptable to both parties. A seller’s real estate closing attorney can save a seller of real estate property a lot of stress and worry.


 

If you are looking to sell a house or condo in Connecticut, let us handle your real estate closing matters. We charge flat rate fees on closings, and we offer FREE phone consultations, so you can make sure we are the right attorney for you.

SCHEDULE A CALL WITH OUR REAL ESTATE ATTORNEY

buyers real estate closing attorney

Why Do I Need a Real Estate Closing Attorney to Buy a House in Connecticut?

Buying a House in CT? You will need to hire a Real Estate Closing Attorney

If you are looking to buy a home in Connecticut, you will need the services of a real estate closing attorney. A buyer’s closing attorney’s job is to protect their client legally and financially. This includes handling all of the contracts, clearing title and securing title insurance, and meeting all lender requirements.

What does a buyer’s real estate closing attorney do?

A buyer’s real estate  closing attorney helps coordinate the purchase of the property by making sure all laws are followed, his client is getting the property as promised, and by managing the finances. A buyer’s closing attorney performs the following functions:

  • Review the Exclusive Right to Buy or Sell Agreement and Dual Representation Waiver between the buyer and their real estate agent (if hired early enough);
  • Review preliminary title report Seller ownership issues;
  • Review and negotiate Purchase and Sale Contract with seller’s closing attorney;
  • Review mortgage commitment issued by the mortgage company and any conditions;
  • Order and review the title search to find any liens, mortgages, judgments or other issues;
  • Prepare buyer’s closing documents such as power of attorney;
  • Review seller’s closing documents including Deed;
  • Review loan documents and meet all lender requirements;
  • Attend closing with, or on behalf of, the client;
  • Act as Settlement Agent for the Lender;
  • Handle all funds through escrow and make all necessary payments and disbursements;
  • Provide an accounting of funds to the client; and
  • Record all documents at Town Hall such as Deed, Mortgage and any Power of Attorney.

A buyer’s real estate closing attorney can minimize the stress and anxiety of buying a home by giving you somebody you can turn to with literally any question throughout the process. This is perhaps the biggest benefit.


 

If you are looking to buy a house or condo in Connecticut, let us handle your real estate closing matters. We charge flat rate fees on closings, and we offer FREE phone consultations, so you can make sure we are the right attorney for you.

SCHEDULE A CALL WITH OUR REAL ESTATE ATTORNEY

delays in real estate closings

Hazard Insurance Delays Real Estate Closings Under New TRID Laws

Hazard Insurance may Delay Your Real Estate Closing

Under the new TILA/RESPA Integrated Disclosures (“TRID”) real estate settlement practices, consumers (those taking out a mortgage to buy a home) must receive and acknowledge the Closing Disclosure, a document showing where all the money is going, a minimum of 3 business days before the actual closing can occur. This means that if any dollar amount changes on the Closing Disclosure, and it has to be acknowledged again, the closing will be delayed for at least another 3 days.

How is Hazard Insurance delaying closing?

One of the biggest issue is old custom. Prior to TRID, it was common for hazard insurance quotes to be obtained a day before closing or even the night before closing. This is because previously there was some leeway regarding dollar amounts and time tables, but not anymore.

So, if the the realtor or real estate attorney do not remind the client to get hazard insurance lined up, the closing could be delayed until a quote is received, updated on the Closing Disclosure, received and acknowledged by the client and a new closing date can be arranged between all parties.

Conversely, I have also seen a closing delayed because the hazard insurance quote was obtained TOO EARLY. Due to changes in the purchase price, the appraised value, or issues discovered during inspection or the walk through, the cost of hazard insurance could change. If the insurance salesman or broker does not take the proper steps to keep everybody informed of any such changes delays may occur.


With the change in laws and the addition of stricter requirements and guidelines, it is more important than ever to hire an experienced real estate attorney to handle your closing. Do problems happen? Sure they do. But you want somebody with the experience and the know-how to limit problems, to spot them when they occur, and to resolve them in a quick and painless manner.

If you are looking to buy a house or condo in Connecticut, let us handle your real estate closing matters. We charge flat rate fees on closings, and we offer FREE phone consultations, so you can make sure we are the right attorney for you.

SCHEDULE A CALL WITH OUR REAL ESTATE ATTORNEY

 

business owners need to avoid successor liability for unpaid business taxes

Successor Liability for Business Tax Debts in Connecticut

Successor Liability: You May Be Liable for Unpaid Business Taxes When Buying a Business

If you rush into buying a business you may receive a nice little gift from the State of Connecticut. Except it’s not a gift, it’s a bill, for the unpaid state tax liabilities of the previous business owner. That is because Connecticut has Successor Tax Liability for unpaid state business taxes, but the liability is avoidable.


 

What is Successor Liability?

Successor Liability is a statutorily created obligation for the Buyer (“successor”) of a business to hold, from the purchase funds, any amounts of business tax that are owed and unpaid by the Seller at the time of the sale, and use it to pay off the Seller’s tax debts to the State. If the Buyer fails to do so, they are liable for those unpaid business taxes.

What taxes can a Successor be liable for?

The Buyer of a business can be hit with successor liability for Sale and Use Tax, Admissions and Dues Tax, and Income Tax Withholdings.

This would theoretically apply to both amounts that were collected and not remitted to the State and amounts that should have been collected but were not. The successor liability also extends to penalties and interest on the unpaid tax amount.

What kind of business succession transactions give rise to successor liability?

Successor Liability will be created when:

  1. one or more persons buy the business or stock of goods of a seller
  2. a co-owner quits or transfers ownership for little or no consideration
  3. a change in the form of ownership occurs

Successor Liability does not arise when:

  1. transfer of a business or stock of goods is part of a foreclosure, repossession, bankruptcy or receivership
  2. the purchase is of a controlling interest in a business entity

Is there a limit to the amount of successor liability?

The Buyer is liable for the unpaid business taxes of the Seller ONLY to the extent of the purchase price, valued in money.

The “purchase price” could involve cash, property, assumption of liabilities, cancellation of debt, and the taking of property subject to liability.

So, if the Buyer is receiving a business, in exchange for $10,000 cash, a Derek Jeter rookie card valued at $1,000, the assumption of liability for two outstanding small claims cases (max payout $5,000 each), the forgiveness of $500 in debt owed by Seller to Buyer for a lost bet on the Super Bowl, and the assumption of a $200,000 mortgage on the business property, the Buyer would potentially be liable for up to $221,500 of unpaid business taxes of the Seller.

How can Successor Liability be avoided?

This is the million dollar question. How does a Buyer protect themselves from being liable for the Seller’s unpaid business taxes?

The short answer is that the Buyer needs to meet their obligations under Connecticut law and withhold any tax amounts owed by the Seller. But how does that Buyer know if the Seller owes the State of Connecticut any taxes and the amount owed?

It is the Buyers responsibility, or the responsibility of their appointed agent, to request Tax Clearance Certificates for each type of business tax they want to be protected against owing. The State will review the file of the Seller, and either issue a Tax Clearance Certificate stating that no taxes are due, or an Escrow Letter, telling the Buyer how much money needs to be withheld from the purchase price to pay off the Seller’s state business tax liabilities.

Of course, if an Escrow Letter is issued, the Buyer still needs to follow through with holding onto the funds and actually paying off those tax liabilities or they are still on the hook.


At Glouzgal Ramos Groth LLP, our business attorneys represent Buyers in the purchase of businesses and business assets. Part of our job is doing the due diligence necessary to protect the interests of our clients and minimize their exposure to liability. For all our business purchase clients, we take on the responsibility of getting Tax Clearance Certificates for the business tax liabilities our clients may be exposed to. If an Escrow Letter is issued instead, we make all parties aware of the unpaid tax debt, make arrangements to hold the necessary amounts in escrow, and follow through with paying off those business tax liabilities.

Successor Liability is just one of the considerations when buying a business or business assets. If you are in the process of buying a business or business assets, schedule a free 20 minute phone call with one of our business attorneys to discuss your goals and needs.

SCHEDULE A CALL WITH A BUSINESS ATTORNEY

 

Can Tax Debt Be Discharged in Bankruptcy? It Depends.

Tax Problems with the IRS or State Usually Are Not the Reason People File for Chapter 7 Bankruptcy

It seems to all come at once, doesn’t it? Generally when a person makes the decision to file for “bankruptcy protection,” tax debts are an afterthought. Other debts are usually the driving force behind a bankruptcy petition. But not carefully considering whether or not tax debts will be discharged through bankruptcy is a mistake, that – unfortunately – too many clients with tax problems make before they talk to an Attorney familiar with IRS procedures.

It usually goes something like this: a small business owner who has personally guaranteed loans for his or her business can no longer stand the constant calls from creditors. Business has fallen drastically, and it seems that there is no way for the client to dig himself out of the hole he is in. Since he is self-employed, and struggling to make ends meet, he probably hasn’t paid (and perhaps hasn’t even filed) his taxes for several years.


 

Wondering whether the bankruptcy route is the best way to dispose of your tax debts?

Set up a phone call with our Tax Attorney to discuss your options. ☎ Schedule with Attorney Groth


I’ve seen court transcripts of judges and lawyers in family court all agreeing that income taxes are non-dischargeable. This is a common misconception within the legal community. I have also heard the same types of statements from actual bankruptcy attorneys or other tax professionals. The truth is that the most common type of tax debt – income tax liabilities –  will almost always be dischargeable in a Chapter 7 bankruptcy at some point. The trick is knowing the rules and understanding what has gone on with a taxpayer’s account before filing the petition. (I have personally seen clients miss out on discharging a liability because they filed a petition two weeks  too early.)

Tax debts usually are not the driving force between filing for a Chapter 7 Bankruptcy liquidation because the IRS, a government agency, is slow (at first) to collect the liabilities, and the IRS does not call business owners non-stop or send threatening letters as often as other creditors. Couple that with the assumption that too many clients and other attorneys make – that income taxes cannot be discharged in bankruptcy – and costly mistakes happen. So what are the rules for discharging tax debts in bankruptcy? Keep reading to find out.

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