LITIGATION & REAL ESTATE
As someone who owns, buys or sells real estate, there’re many reasons why you might be party to a lawsuit. Litigation is common in real estate, and real estate agents, property owners and residents can find themselves suing or being sued.
Real estate is legally defined as physical, real property (or “land”) and the buildings on that property. The practice of real estate law refers to the various local, state and federal laws that govern the ownership, purchase, sale, management and all other activities related to the real property.
Litigation is when one party files a lawsuit against another party. In the world of real estate and real estate law, an owner, REALTOR®, or tenant may be party to litigation. These may include but are not limited to:
- Development and Construction Disputes
- Contract and Title Disputes
- Failure to Disclose Property Defects
Your best defense against potential real estate litigation is information and preparation. Be knowledgeable of any property you’re buying or selling. Don’t misrepresent yourself or your real estate in any way. Be aware of the legal requirements associated with buying or selling property.
If you do need to sue someone, or you end up being sued as a result of your real estate dealings, the best thing to do is hire a lawyer. Since litigation is always a possibility in real estate, it’s better to find the right lawyer BEFORE you need one. Retain a real estate attorney that can make sure you’re following the letter of the law, and you may NEVER have to go to court.
Examples of Lawsuits in Real Estate
America is a litigious society. There’s practically no limit on the reasons why you might sue or be sued. However, there are some common examples of lawsuits and litigation as it relates to real estate.
Here are some common examples of real estate lawsuits:
– Failure of Payment
If you decide to provide owner financing to a purchaser and the buyer stops making their payments for the usage of that property, you may need to take them to court for failure of payment and eventually foreclose on the property. This is a common reason for ligation in commercial and residential real estate mortgage holders.
– Landlord / Tenant Lawsuits
There are times when a dispute cannot be settled between the owner of the property (landlord) and the person using that property (tenant.) These cases can result in litigation. You may file a lawsuit against a tenant that has violated your lease and won’t leave the property. As a tenant, you may sue your landlord after you move out if they don’t refund your security deposit.
– Suing for Extensive Property Damage
If you rent or lease your property to someone, and they leave your property in a state of terrible disrepair, you have the choice to take them to court. This can result in your problem tenant being evicted and forced to pay for the extensive property damage.
– Failure to Disclose Defects or True Nature of Property to the Buyer
Failure to disclose a property defect is the most common reason a real estate agent or a property owner gets sued by their buyer. Common things that don’t get disclosed include issues related to construction, non-permitted construction, cracks in the foundation or walls and leaks.
The best way to avoid this type of litigation is with inspections and property disclosure forms.
Owners and real estate agents must always be honest, not hide known issues and be responsible with property maintenance.
– Accidental Injury or Injury Caused by Negligence
If someone gets hurt on property that you own, they may sue you for causing that injury due to negligence. This could happen if you run a business and one of your customers slips and falls. This type of lawsuit may also occur if you rent a residential property and a structural failure causes injury or damage to your tenants.
– Breach of Contract
This is one of the broadest types of litigation you may find yourself a party to, as the defendant or the plaintiff. Any time there is a legal, written agreement between two parties, and one of those parties violates the agreement, they are in breach of contract.
In real estate, here are some ways a person or group may be in breach of contract:
– If a seller agrees to a buyer’s offer letter, but then gets a better offer and sells the property to someone else.
– If a renter violates the terms of their commercial or residential lease.
– If a seller agrees to make certain improvements or repairs to a buyer’s property, but never executes.
– If a seller or renter fails to vacate a property at the end of their term or ownership or rental.
As you can see, there are several examples of when an attorney may need to be retained. Alternatively, you may want to consider Alternative Dispute Resolutions (ADR).
Mediation – Alternative Dispute Litigation
Taking matters to trial is not always in line with a clients’ ultimate goals or the bottom line. Often times, contracts will include a clause requiring that any future disputes that arise must make a good faith effort to resolve the issue through mediation. Absent a contractual obligation, (often referred to as an arbitration clause) mediation can be a smart choice in preserving finances and relationships!
When mediation is advantageous to your business, the Saba Law Group, LLC can help to either facilitate a mediation as a neutral third party or negotiate on your behalf towards an equitable solution that serves your needs during alternate dispute resolutions.
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