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Civil LitigationSeptember 16, 20220 comments

What Are The 4 Most Common Causes Of Real Estate Litigation?

Be proactive and learn how to avoid these common real estate litigations.

Real estate litigation can be as unpleasant as it sounds. Obviously, no one wants to get tied up in a legal dispute while buying or selling commercial or residential property, but sometimes it’s an inevitable burden. Typically, these disputes can be resolved out of court, but real estate litigation can be an appropriate solution if an agreement simply can’t be made. 

Today, our experts at MUNGER DENKER RUIZ BARBOUR discuss the most common causes of real estate litigation and how to overcome some of these scenarios.

Breach of Contract

As one of the topmost common reasons for real estate litigation, contract breaches can occur any time the conditions of the sale are broken. The plaintiff, which is the wronged party, can sue a defendant, or the accused party, and will only win the litigation if they can prove the breach of contract. If the plaintiff wins, they could receive compensation for any of their losses. 

It is recommended to have a real estate attorney carefully read through any property contract before your final signature to ensure the terms are understood, met, and most importantly, legal.

Failure to Disclose Property Defects

It is the seller’s responsibility to disclose all known and possible defects on the property. If any defects are not reported, but the buyer finds them, it is possible for the buyer to sue based on failure to disclose. The challenge with this real estate litigation is that it’s hard to prove that a seller did not know, or would not have reasonably known, about the property defect and purposefully withheld that information. 

The most common defects that lead to lawsuits include roof damage, mold, or leaks. All of these should be detected during a property inspection or an adjustor so it’s important to make sure these steps are never overlooked during the buying process.

Breach of Duty or Negligence

Real estate agents have a duty to provide the best deal to their clients and disclose any pertinent information that could be beneficial. Contrarily, they cannot disclose any private information about their clients, such as financial information. If a real estate agent fails to comply with these responsibilities, a plaintiff could file a lawsuit. The real estate litigation could lead to serious consequences for the agent, such as having their license revoked.

Boundary Dispute

Boundary disputes are a fairly common reason for real estate litigation and are often an easy conflict to resolve. In most scenarios, the cause of these litigation cases occurs when the legally registered property lines do not match the practical property lines that are being recognized or vice versa. These real estate litigations can be avoided by looking up the legal property lines and making sure these match before the contract is finalized.

Most people don’t like reading every line of lengthy contracts, especially if the jargon seems like a foreign language. Luckily, it’s the responsibility of real estate attorneys to pore over these documents. Our experienced attorneys know what issues to look for and how to make sure you’re getting a fair and honest agreement that keeps your best interest in mind.