22 Types Of Law that May Affect Real Estate Investors


That is not a typo. In fact, I may be off by a number or two. Given today’s chaos and confusion in the real estate realm, it is a definite possibility we could find ourselves in a court room answering a complaint under one of the following 22 types of law:

Common Law
Equity Law
Admiralty/Maritime Law
Administrative Law
Private Law
Public Law
International Law
Constitutional Law
Treaty Law
Federal Law
State Law
Municipal Law
Probate Law
Family Law
Corporate Law
Contract Law
Tax Law
Civil Law
Criminal Law
Labor Law
Bankruptcy Law
Martial Law

I don’t know about you, but my imagination boggles at the mines that await us in the field. As real estate investors, we probably don’t pay much attention to most of them. We generally are pretty adept at contract law, tax law and state law and might even have a handle on civil law, but the rest of them are mere shadows. We can see them when the sun shines but otherwise they are invisible.

The intent of this post isn’t to define each one or give a dissertation on them. Rather, the intent is to provide what I call an awareness list especially with the investment arena what it is at this moment in real estate.

Desperate People Do Desperate Things

A lot of people are desperate – who can blame them, right? – and are willing to entertain any kind of “remedy” that may be presented as a sure cure to their problems. For example, look at equity law. It is supposedly the law that provides the remedy non existent in common law.

If common law doesn’t provide a remedy to foreclosure but equity law holds out a glimmer of hope, won’t people use it? Of course they will.

Let’s say you buy a foreclosed home, whether at auction or as an REO, and the homeowner (former homeowner to be more precise) decides to take you to court under a principle in equity. The ramifications can produce a phrase that has become common in our vocabulary – shock and awe.

You are not only shocked that you are the “defendant” but you are in awe at the sheer volume of the pleading called a complaint. The complaint has you painted as the evil villain in a land grab of magnitudinous proportions.

Imagine getting served this type of complaint. How would you answer? Would you even bother? Would you hire an attorney? The questions go on and on.

I put this on the table not to rattle you but because in my surfing of the web I’ve noticed a host of “solutions” being propounded as the way out for those in foreclosure or as a remedy for those about to be foreclosed upon. To me, I can’t imagine anyone falling for some of this stuff but, again, desperate people do desperate things. And, some of this stuff is touted as the silver bullet and it sounds real, real good.


I also realize the courts should cull out the so called frivolous suits but that usually doesn’t happen until the first appearance. I don’t know about you but I don’t want to be the guy who has to go to court even the first time. Hence, awareness of not only how we conduct business but the wording of our forms and contracts becomes imperative. After all, the menu of law types doesn’t seem to be diminishing.

Again, this isn’t meant to scare anyone or be negative. It is meant to heighten awareness in an arena that most of us only have peripheral knowledge. To me, it is better to be prepared than to be surprised or shocked.

I believe you will agree.

Photo Credit: bimurch

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