There are many different types of disputes that can occur during the course of a real estate transaction, and some issues related to real estate can even occur after the transaction has already been completed. While many controversies can be settled through negotiation or mediation, some must be litigated in order to be resolved. Critically, legal disputes can arise in the areas of both commercial and residential real estate. It is essential to have a real estate attorney on your side who is aware of the scenarios that can lead to real estate litigation, who knows how to avoid going to court, and who understands how to prevail when the situation requires litigation.
The following are some of the most commonly litigated issues related to real estate:
A breach of contract is generally the most common cause of real estate litigation. It is essential that all parties fully comply with all terms and conditions contained in a real estate contract. These can include details regarding the closing date, financing, title clearance, and more. If one party does not adhere to the obligations set forth under the contract, the non-breaching party may be entitled to pursue the damages incurred as a result of the breach.
An anticipatory breach of contract occurs before the terms of the contract are to be performed. In these cases, the party who has been wronged may be able to choose between terminating the contract and seeking a remedy immediately or waiting until the time for performance has passed and suing for their damages. Whether the wronged party waits or takes immediate action, these issues related to real estate can give rise to rigorous litigation.
Boundary disputes are commonly litigated in California. These disputes may arise because of misunderstandings or over disagreements regarding ownership and property lines. For example, a homeowner may install a fence or add landscaping that encroaches onto a neighbor’s property. Boundary issues can be complicated and may even require a property survey, appraisal, and full title search. If a resolution cannot be reached, litigation may be necessary to settle the matter.
In California, those who own property with another are either joint tenants or tenants in common. Common disputes that can arise among parties who own land or real estate together include disagreements about how the property should be used and discord regarding improvements made on the land. In some cases, parties might want to avoid sharing ownership entirely. In the event the co-owners cannot work out a mutually acceptable plan, the matter may need to be determined by a judge.
Under California law, a seller must disclose certain problems with the property, such as structural issues or other defects that could affect the value of the property. Failure to do so is a violation of the law, and the buyer may be able to commence a lawsuit for misrepresentation, fraud, and breach of contract to recover their damages.
A California real estate broker has a fiduciary duty to the client. This means that brokers owe their clients the highest duty of good faith, honesty, loyalty, and fair dealing. In other words, the broker must disclose all material information, whether actually known or reasonably obtainable, regarding the property or in connection with the transaction. If a broker intentionally or negligently fails to disclose a fact that is known about the property and causes financial loss to the buyer, a claim for breach of fiduciary duty or negligence may be raised.
There are two types of warranties that apply to real estate transactions: express warranties and implied warranties. Under California’s commercial code, an express warranty is “any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain. . . .” Significantly, in cases involving real estate or construction, the warranty or representation of the quality of the structure becomes part of the bargained-for exchange. Strict liability can be imposed on a seller if a breach of express warranty is established.
A title dispute is any disagreement concerning the ownership of real property, such as those involving improper liens or easements. One way of resolving these issues and determining the true property owner is through the quiet title process. In addition, a quiet title lawsuit can be used to correct errors in the chain of title — even when there is no dispute concerning ownership.
There are various types of fraud that can give rise to litigation. Fraudulent disclosure, falsification of documents, predatory lending, and fraudulent deeds are just a few examples of real estate fraud. Not only can the wrongful party be subjected to criminal penalties, but the victim of fraud may be entitled to pursue civil remedies in litigation.
In California, a builder can be held strictly liable for construction defects in residential property. In such cases, claims may also be asserted for negligence and breach of warranty. Recoverable damages may include the reasonable value of repair, storage expenses, relocation, lost business income if the home was the primary place of business, and other financial losses.
There are a number of issues related to real estate that can give rise to litigation. Real estate litigation is complex; no matter which side you are on, it is always best to have the guidance of a knowledgeable attorney when facing a dispute. Our attorneys have considerable experience handling a wide variety of real estate matters and litigating successful outcomes in the courtroom. Call us to schedule a consultation and ensure your real estate rights are fully protected.