Real Estate Litigation:
Whether you are buying, renting, or selling property, it can be extremely rewarding or stressful depending on how the transaction plays out with the renter, purchaser, or seller. Unfortunately, one can be subjected to real estate litigation no matter where they fall within the real estate purchase chain.
While most real estate agents try their best to cross all the T’s and dot all the I’s, issues can and do arise more often than one would like, and with today’s limited housing inventory along with the growing population, many individuals find themselves being rushed into purchasing decisions for fear of losing out on the purchase. Below are four reasons litigation can occur.
1. Failure to disclose property defects – Failure to disclose occurs when the property owners knowingly fail to disclose a defect. Typical defects that are often not disclosed include:
c. Rotted wood or termites
d. Huge cracks in driveways or house foundation
e. Inadequate ventilation or windows
f. Issues with the septic or heating system
g. Radon leaks
h. Outdated or problematic wiring
i. Leaks in roofing
j. Issues with electrical, plumbing, and HVAC systems
2. Breach of Contract – A breach of contract occurs when one fails, without legal excuse, to perform as promised all or part of the contract agreed upon. Including failure to act in a manner that meets the standards of the industry or the requirements of an expressed warranty or implied warranty, including the implied warranty of merchantability. To determine a breach of contract, the judge will ask the following questions:
a. Was there an existing contract?
b. What did the contract require each party to perform
c. Was there ever a modification of the contract
d. Do the facts support a breach of contract
e. If the breach occurred, was it material to the contract at hand
f. Does the breaching party have a legal defense to enforcement of the contract
g. And finally, what damages occurred due to the breach
It is always wise to have a contract attorney review the agreement before signing to avoid the unforeseen loopholes that can exist within contracts. Protecting your interest upfront is always much cheaper than waiting until you’ve entered the mary-go-round of the legal system.
3. Breach of Duty or Negligence – Exists when an individual fails to meet the standard of care required by law gauged by how the standards of a reasonable person within that profession would perform. Once established that the defendant owed the claimant a duty of care, claimants must demonstrate that the defendant was in breach of duty. To do so, there are four factors looked at by the courts:
a. Likelihood of Harm – defendants are not expected to guard against unforeseen events.
b. Seriousness of Harm – meaning any harm rather it be physical or nonphysical, including psychological, financial, or reputational damage, was sufficiently severe enough to cause one to continue to perform the act to avoid incurring further harm.
c. Cost of Prevention – Expenditures incurred intended to minimize the number of defects in products or services.
d. Utility of the Defendant’s Conduct – The relationship of proximity must exist between the defendant and the claimant, and it must be fair, just, and reasonable to impose liability.
To avoid these issues, choose a reputable realtor and builder by doing your due diligence ahead of time. Ask family and friends for references, and don’t be afraid to ask current owners in the neighborhoods that you’re interested in about their experiences with their realtors or builders. Asking for references from builders and realtors will not always give you the results you are looking for since most of these are cherry-picked.
4. Boundary Disputes – Boundary disputes arise when neighboring owners disagree upon property boundary lines between the neighboring properties, often due to a fence or building being constructed. Conflicts usually occur shortly after purchasing the property when the owner realizes that a structure crosses the plotted boundary. Common disputes are as follows:
a. Lot Line Disputes – Misconceptions of where the property line lies or the said line conflicts with a survey line.
b. Driveway Issues – Often found in older neighborhoods, driveways will encroach onto the neighboring property by a few inches or feet. The issue arises when a new homeowner purchases the property and decides to enforce the property line.
c. Fence Placement – Happens when an owner decides to replace a damaged fence and the new neighbor informs them that their survey shows the fence extends upon their property.
d. Landscaping – The neighbor has been landscaping a portion of what was believed to be their property only to find out from the new neighbors that the survey shows it to be on their property.
e. House Encroachment – A new survey done during the home buying shows that the house or the neighbor’s house encroaches onto the other’s property.
f. Garage Encroachment – More common than one would think, especially in older neighborhoods where garages were added after the fact can often encroach upon the neighboring property.
g. Access Issues – With the influx of growth, many are subdividing off part of their land to sale. Doing so frequently requires a neighboring property to provide access via an ingress or egress so that the property does not become landlocked.
Keeping Yourself Protected is always the ideal way to avoid litigation. Therefore, doing your research before committing to purchase by investigating whom you are working with and having a qualified real estate attorney review the contracts to protect your interest can be the deciding factor between an easy purchase and sell or future litigation.
Here at Dean Law, we have extensive experience in dealing with real estate law disputes such as:
- Easement Issues
- Obtaining Licensing
- Filing ejectment or trespass claims
- Settling Land Issues
- Settling Leasing Land Issues
- Filing Quiet Title