Disputes over real property can happen whether the subject property is in residential or commercial in nature. While most people would rather resolve disputes outside of a courtroom, when two parties simply cannot agree on a solution, litigation frequently becomes the solution of last resort. Depending on the issue, or the circumstances surrounding a particular dispute, a qualified and experienced real estate attorney and title company are essential resources to have on your side. Do you think you have a dispute that might be boiling over? Here are some things to know, and consider, about the process of real estate litigation.
What Is Real Estate Litigation?
Real estate litigation is a lawsuit that occurs between parties to a real estate transaction, the participants in these disputes are wide ranging (e.g., purchasers vs sellers, landlords vs tenants, lenders vs. borrowers, etc.). Given the broad universe of issues and parties in real estate, it is important to understand the nuances in a transaction in order to distinguish the different types of disputes that could arise out of interest in real property.
A common type of real estate litigation relates to the disputes concerning the purchase and sale of real property. This can occur when there is a dispute regarding the terms of what the parties agreed to prior to closing, or over the property that was delivered in connection with that agreement. In this article, we will share some of the typical reasons for real estate litigation and when you should seek the help of a real estate attorney.
Common Reasons for Real Estate Litigation
There are many courses of action that may be taken to resolve disputes dealing with residential or commercial property. In some cases, a party may decide to pursue litigation because the actions of another individual or group threaten their title to the property or affect the value of real property. With that in mind, please consider a few of the most common reasons for real estate litigation.
Breach of a lease or sales contract
Purchase contracts and leases are both examples of agreements that set forth how a transaction involving real property will be governed. These agreements contain all of the conditions and terms that both parties have agreed to comply with. If one of the parties fails to abide by the terms laid out in the contract (e.g., Purchase price, Insurance, Closing Date, Title Curative, Financing, Rights of Inspection), then the other party may choose to file an action in order to enforce their rights in an action for breach of contract.
Breach of construction contracts or terms
Just like in the case of a purchase contract, these types of disputes occur when there is a construction contract and one of the parties to that agreement breaches a component of it. In a construction contract, these components can include: benchmarks for delivery, dates of inspections or occupancy, cost overruns, and the types of materials being used.
Zoning disputes
Frequently, litigation can occur when there is a disagreements over how property owners are using a particular property. When the use in controversy involves the use prescribed by a comprehensive plan, or whether such use is permissible under land use restrictions, these are called zoning disputes. These can include the process of obtaining or appealing zoning decisions or permits within the municipal or county government. Zoning disputes are extraordinarily complex, and fraught with details. If you find yourself involved in a zoning dispute, you will want to find an experienced litigator to counsel you on how best to address these items.
Landlord/tenant disputes
Disputes between landlords and tenants can take a variety of forms, but they are almost always connected to the terms of the Lease (the agreement that governs how the property will be used, for how long, and for what amount). These conflicts can include: how a tenant may use a property, whether the rent is paid, when the tenant is required to vacate the property. In cases where there is a disagreement over terms, these conflicts can result in one party being sued by another.
Encroachments and easements
Encroachments occur when someone places an object on the property of another (Such as a shed, or a driveway). Easements are a right of an individual to enter the property of another for a specific purpose (such as ingress or egress). Encroachments and easements can result in real estate litigation as they involve a property owner entering a neighbor’s property. While encroachments are generally not authorized, easements are usually the result of a written agreement between property owners. If a dispute arises regarding the use authorized by the easement, or the nature of the encroachment, litigation can frequently occur.
Title disputes or defects of title
“Title” is commonly described as the “bundle of rights involving real property”. A Title dispute can occur when another person or entity claims to have a legal right to the real property of another. Examples of title disputes include: rights of heirs, prior unreleased liens, or unresolved encroachments estate. Working with legal counsel who has specific title experience or a title company with real estate attorneys on staff can help you identify your rights in a parcel of real property and help clear the record on how best to resolve a dispute involving title.
Breach of duty or negligence
Negligence is frequently defined as “damage caused by the breach of a duty of a particular party”. This duty can extend to the fiduciary duty ( a duty to act in the best interest of their clients and not in their own interest or the interest of a third party) of a real estate agent to their clients. If an agent fails in that fiduciary duty by failing to act in their clients’ best interest, or by failing to represent their client truthfully and fairly, or by failing to keep sensitive information related to clients confidential, they can be sued for breach of duty.
Failure to disclose
Florida, like many other states, requires that sellers disclose any known defects of a property that could impact property’s value. If a defect is discovered that was not disclosed by a seller (WHETHER OR NOT THERE WAS AN INSPECTION), a buyer has a right to file a suit against the seller for failure to disclose the material defect. Common property defects include the potential for flooding, defective pipes, a leaky roof or the presence of mold.
Specific performance failure
Most form contracts in Florida provide the buyer with the option to pursue “Specific Performance” in the event of a Seller’s breach. As the name implies, this type of litigation involves asking the court to force a party to fulfil their obligations as required in the contract. In the case of a sales contract, if a seller breaches the contract by failing to complete the conveyance of the property, the Buyer can sue the Seller in a specific performance lawsuit in order to force the Seller to comply with the contract terms and complete the transaction.
Condominium or Homeowners’ Association issues
Condominium Associations (and sometimes Homeowners Associations) have an obligation to act within their recorded covenants and restrictions (aka the “Declaration”). In cases where an association fails to enforce the rules as set forth in the Declaration, or in cases where an association (or its property manager) seeks to enforce a rule that is not permitted under state law or the Declaration, litigation may be filed in order to resolve the rights and obligations of the owner and association or property manager as they pertain to that association.
Are you thinking about engaging a Real Estate Attorney or Title Company regarding potential Real Estate Litigation?
Each matter is different and the decision to enlist the services of a real estate attorney will ultimately depend on your location, state laws, and the nature of your transaction. In some cases, even if you feel comfortable proceeding without a lawyer, your state or lender may require you to have a real estate attorney for the issue in dispute.
A better approach is to take steps to avoid costly and time-consuming litigation by hiring an experienced and knowledgeable attorney at the beginning of your real property transaction. Having a real estate attorney to support you during the home buying or home selling is not only helpful for home buyers and sellers alike. But by your attorney can also assist you with :
Drafting and finalizing purchase and sale agreements or leases
Preparing amendments to contract or a lease.
Communicating transaction details with your real estate agent or lender
Completing and interpreting a property’s title search.
Conduct a closing and disbursing the proceeds to all appropriate parties
Issuing a title policy that by its terms and conditions will provide peace of mind that title to a property is insurable and marketable.
Final Thoughts
If you are in a situation that you are concerned might wind up in litigation, don’t hesitate to reach out to the attorneys and professionals at St. Johns Title. Working with qualified legal professionals can give you peace of mind throughout any real estate transaction. Visit here to contact us.
