Real estate is a complex and valuable asset. When you become a homeowner, every mortgage payment you make increases your equity, which means that you own more of the property. Home values tend to increase over time as well, which makes real estate a highly appealing asset. It’s also why legal issues often arise. The types of real estate disputes that homeowners might contend with include everything from title disputes to boundary challenges.
If you’re a developer, tenant, or property owner, it’s crucial that you learn about the complexities of real estate litigation and how to navigate these legal battles. While the litigation process may begin with filing a complaint, it may eventually become serious enough to involve a trial. By understanding the common types of real estate disputes, you’ll have a better chance of successfully resolving them. In this guide, you’ll learn how to properly navigate real estate litigation.
Common Types of Real Estate Disputes
There are many types of real estate disputes that can occur when you own a home. For example, a title and ownership dispute could be made by someone who believes they have a stake in a house. If title documents are unclear or fraudulent, these disputes might arise. When you perform a title search, you might discover an issue with the current documentation. In many cases, the only way to resolve this type of dispute is with legal action that establishes clear ownership.
It’s also common for a boundary dispute to be made if a neighbor has an issue with an easement or property line. If property lines are unclear, neither owner will likely want to cede ground, which means that the case might lead to litigation. When a property owner uses the land of a neighboring property without first seeking permission, a dispute could occur. Real estate attorneys will likely need to help you understand local zoning laws to resolve a boundary dispute.
Contract disputes are a common part of real estate litigation as well. There are numerous scenarios that can lead to this type of dispute. For example, if a buyer and owner have a conflict over the terms and conditions of a real estate transaction, a contractual dispute can be made. These conflicts often revolve around contingencies, financing, and closing dates.
If a landowner hires a general contractor to build a residential home or commercial building, a contract dispute might occur because of cost overruns, delays, or poor quality of work. Contractual disputes tend to take place between tenants and landlords over rent payments, property maintenance responsibilities, and lease terms. If a breach of contract takes place, one party may be responsible for monetary damages. The contract could also be terminated.
When a general contractor constructs a building, a dispute might occur if the owner finds a construction defect. This type of dispute includes problems with the materials or the quality of work. Along with structural defects, this dispute could involve code violations or water intrusion issues.
If a lender wants to foreclose on a property because of unpaid mortgage payments, litigation could be necessary. The current owner may attempt to challenge the foreclosure by filing a claim and seeking litigation. While the lender might ultimately win the case, this form of legal action often delays the foreclosure process.
The Real Estate Litigation Process
The real estate litigation process begins with an initial consultation and an assessment of the case. Once a potential client meets with a law firm, an attorney will evaluate the case to identify legal options and detail the possible outcomes. Clients must provide the attorney with extensive documentation to ensure they can develop a strong case.
You may be able to negotiate with the other party to determine if an agreement can be made before the case goes further. Dropping the case now can save you a lot of money. If an agreement isn’t made, the next step involves filing a complaint. The complaint should outline the compensation or relief that you’re asking for. Once this documentation is drafted, it must be sent to the other party and filed in the proper court.
After a complaint is filed, response and discovery occur. The other party is given a short period of time to respond, which may involve defenses and counterclaims. During the discovery phase, parties are tasked with exchanging relevant information, which attorneys will use to gather evidence. The types of information that can be sought during discovery include documents, interrogatories, and depositions.
Before the trial takes place, each party can file pre-trial motions, which aim to dismiss portions of the case or resolve smaller issues. These motions can focus on substantive issues or procedural matters. For example, one party could state that some of the evidence shouldn’t be admissible. Pre-trial motions can be addressed by the judge in a short hearing.
At this point, mediation and arbitration could take place before the case goes to trial. It’s common for real estate disputes to be settled out of court. You can handle settlement negotiations during any stage of litigation. Mediation occurs when a third-party individual helps the disputants come to an agreement on their own. During arbitration, a neutral arbitrator will act as a judge and resolve the dispute.
If the case goes to trial, each party will be responsible for presenting their evidence and making arguments that support their claims. While some cases are overseen solely by a judge, they can also take place in front of a jury. Trials can be complicated and lengthy, which is why it’s best to avoid them during a real estate dispute.
Once the trial concludes, either party should be able to file an appeal or post-trial motion if they think that the final decision was inaccurate. Appeals can often be made to a higher court. However, this process adds costs and complexity to litigation.
The Role of Real Estate Attorneys
Real estate attorneys can be invaluable during litigation as well as transactions. They have comprehensive knowledge of property law, which allows them to provide you with excellent legal representation and advocacy. They’ll analyze your case and create a comprehensive strategy with the information available to them.
Attorneys also prepare all of the documents that are needed during litigation. If you intend to go to trial, your real estate attorney will file the initial claim and handle appeals if you lose the case. An attorney can provide negotiation support as well to ensure a favorable settlement agreement.
Alternative Dispute Resolution (ADR)
As touched upon previously, mediation and arbitration can take place during litigation. These legal techniques are known as alternative dispute resolution (ADR). The two most common forms of ADR are mediation and arbitration. During mediation, a neutral individual will help both parties reach an acceptable resolution. However, the mediator doesn’t make a final decision on the case. Their goal is to help both parties settle the dispute. This option is commonly sought when the dispute involves neighbors or family members.
If you seek arbitration, a neutral arbitrator will serve as a judge in your case, which means that they will hear evidence and arguments from each side. Once these arguments are heard, a decision is made. Arbitration isn’t as formal as a trial. The costs are lower as well. Parties agree that the arbitrator’s decision is final with binding arbitration, which means that the decision can’t be appealed. If you take part in nonbinding arbitration, you can request a trial if you don’t agree with the decision.
ADR offers many advantages, the primary of which is that it’s usually much more affordable than going to trial. The process can also be completed faster. Since the process is handled by a neutral third party, it’s usually less antagonistic than a trial.
Legal Considerations and Best Practices
Before you seek litigation, there are some legal considerations you should take into account. For example, your case might fall outside of the statute of limitations. Let’s say that a general contractor made a serious mistake when constructing your home. If you didn’t find the mistake until years after it took place, you may no longer be able to file a lawsuit or make a legal claim.
Consult early on with attorneys to obtain legal advice on your rights and the strengths of your case. Your attorney might be able to help you resolve the matter without going to trial.
Successful litigation depends on document preservation. Keep thorough records of all payments, communications, and agreements with the parties involved in the case. Contractors, emails, and photographs can be used as evidence if your case is taken before a judge.
You can bolster your case if you have expert witnesses on your side. Depending on the nature of the dispute, you can ask for testimony from construction experts, appraisers, and surveyors.
Even if you have a strong case, there are times when it’s best to settle out of court. Your attorney can help you assess settlement offers and understand the costs associated with going to court.
Conclusion
Real estate litigation is an important process that you can pursue when involved in a boundary dispute, contract issue, or tenant-landlord disagreement. The complexities of litigation are challenging to navigate without a seasoned real estate attorney by your side. Seek legal expertise to strengthen your case. To avoid the costs associated with a lengthy trial, consider ADR for a swift resolution.