Anyone who has purchased or leased a home, a building or any type of real estate is familiar with the stack of contracts, releases, amendments, disclosures, riders, inspection certificates, title work, deeds and other legal documents that are associated with a real estate transaction.
There are good reasons for all of the paper work.
Real estate related disputes are some of the most common types of matters resulting in litigation in the U.S. Considering all that is associated with real estate transactions – property lines, utilities, drainage issues, construction defects or hidden damage, various contracts, disclosures, etc. – the opportunities for conflict, simple misunderstandings or communication failures are nearly endless.
What are the most common real estate disputes?
Every component of a real estate transaction, even one as simple as renting a storage locker or apartment, can be the source of conflict and lead to a legal battle. While the list of potential issues is certainly lengthy, the most common issues include:
- Failure to disclose property defects. Sellers of real estate in Missouri and Illinois (as is the case in other states) are required by law to disclose any known defects that may affect the value of the property involved in the transaction. For example, hiding a cracked foundation behind newly-installed drywall in a recently finished basement can lead to a lawsuit for failure to disclose a defect once those cracks are discovered by the new homeowner.
- Breach of contract. Real estate sales or lease contracts are filled with obligations for all parties involved in the transaction. Sellers, buyers, real estate agents, lessees and lessors all have specific duties spelled out in a legally binding contract. Failure to meet a deadline, complete title work properly, finish required repairs to the property or literally countless other obligations can lead to a lawsuit alleging breach of contract.
- Breach of duty. Virtually all real estate industry professionals – real estate agents, inspectors, loan officers, title company professionals, etc. – are legally bound to meet certain obligations and act in the best interest of the party or parties they represent in the transaction. For example, a buyer’s real estate agent must maintain absolute confidentiality regarding sensitive information about his or her client. These professionals are also legally obligated to disclose any information that may benefit their client. Any failure by one of the professionals involved in the transaction to carry out duties, protect confidential information or provide essential information to a party can lead to financial damages to the party they represent. And that can lead to a lawsuit.
What are the options for resolving real estate issues?
Even with the numerous contracts, agreements, checklists and other tools used in real estate transactions, disputes still occur. When they do, there are three primary options for resolving those disputes:
- Resolving the dispute between the parties involved. Communication and cooperation can make this the quickest, least expensive path to take in resolving a conflict. This does require that all parties involved be committed to resolving the issue and that all are prepared to act in a reasonable manner.
- Filing a law suit. “I’ll see you in court” may sound good and at times it’s the only viable option. But it’s important to understand that filing suit and going to court can be expensive and time consuming. And now, with the Covid-19 pandemic shutting down courts, court dockets are backlogged and getting a court date can take even longer than normal.
- Mediation. Your best option may well be mediation and is certainly worthy of consideration. In mediation the disputing parties work with an independent mediator to develop a mutually agreeable settlement of theirs dispute. Mediation can be completed quickly, at times in one meeting. Legal fees are miniscule when compared to the expenses associated with a lengthy court battle. With some degree of commitment to staying out of court by all parties in the dispute, many real estate disputes can be efficiently and effectively resolved in mediation.
Book a free consultation with KIM L. KIRN todayto learn more about resolving real estate disputes through mediation.