Common Causes of Real Estate Litigation
As the real estate market continues to flourish, so does the real estate litigation field. Claims and lawsuits range from residential and commercial sale and purchases to landlord-tenant disputes, and condominium or homeowner association disputes. Even disputes between neighbors over property lines or easements are increasingly more common. Regardless of what side you are on or whom you are dealing with, getting involved in a lawsuit can be a time-consuming and extremely expensive endeavor. While this is by no means an exhaustive list of real estate issues that frequently arise, here are several of the more common real estate problems that lead to litigation and some tips on how to try to avoid them.
Breach of contract: The standard FAR/BAR forms for residential property, “AS IS” contracts, and even vacant land contracts, all contain provisions that must be complied with, such as clearing title, closing date, financing, due diligence inspections, and much more. Failure to honor any of the terms may give the buyer grounds to sue the seller for breach of contract. And the reverse is also true. To avoid this possible result, have a qualified real estate attorney review the sale and purchase contract, explain any provisions that are unclear, and consider including additional language that may address any unusual or unique situations related to the sale and purchase.
Failure to disclose a defect on the property: Simply put, Florida law requires that if you are aware that something is wrong with a home or commercial property you are trying to sell or lease, it must be disclosed. Examples of defects include: prior flooding issues; plumbing leaks; mold; non-permitted improvements; and insurance claims. For example, if a seller sells his/her home, failed to disclose that there was a prior plumbing leak, and the buyer discovers water damage or mold that may be related to this problem, the buyer can claim that the seller should have been aware of the defects and failed to disclose them before closing. Three simple tips to reduce the likelihood of being sued for a failure to disclose: disclose, disclose, disclose it! If you are not sure if a minor electrical issue or some water damage that was cleaned and repaired by the seller needs to be disclosed, it is a better practice to place the buyer on notice rather than having to deal with it through the litigation process.
Negligence or breach of standard of care: In Florida, tenants have the legal right to the private, peaceful possession of their rented premises and to occupy a safe and livable property. If a landlord fails to maintain the residence in a fit and livable manner (like making necessary repairs or maintenance), and someone is injured as a result, a lawsuit may be right around the corner. Examples vary from a non-working air conditioning unit resulting in mold and unlivable conditions related to heat and breathing to a poorly maintained parking lot with holes resulting in someone falling and getting injured. To limit exposure to potential negligence or breach of duty claims, timely respond to any reasonable repair and maintenance requests, and make sure you are familiar with your legal obligation under Florida law by periodically reviewing it with a qualified real estate attorney and.
Specific performance matters: In basic terms, “specific performance” is when one party to a contract fails to perform certain terms, the other party requires that the non-complying party do what the contract requires. For example, if a buyer comes to closing ready, willing, and able to close and the seller simply refuses to close, the buyer can demand that the seller sell the property to the buyer in accordance with the contract. To try and avoid such an outcome, if there is a provision or a condition that may result in a possible “specific performance” claim, discuss it with the other party up front, preferably before the contract is signed, and make it an exclusion or contingency to the contract. Of course, consulting with a qualified real estate attorney to help negotiate the terms and advise on other potential pitfalls related to specific performance is always good practice.
Boundary and easement disputes: Problems can occur when buyers rely on a previous survey, when property boundaries have not been correctly registered, an historic property line is inconsistent with the legal one, or an easement, a shared strip of land, that has not been used now becomes an issue. To attempt to prevent issues surrounding boundaries and/or easements, follow one controlling tenet: due diligence. Make sure a new survey is done when you purchase real estate, check the public records for recorded easements, and most importantly, use a qualified real estate attorney that can research easements and legal boundaries to warn you about any possible disputed conditions.
Homeowner/Condominium Association disputes: As more and more developments pop up, more and more disputes between home/condominium owners and the Associations that govern these developments arise. These can range from where to park to making improvements to a home. While it may be time-consuming proper to closing, you should review the Association’s by-laws, declarations, restrictions, and covenants, which all should be recorded in public records. If there is an issue particular to the purchase, look for how it is addressed in the Association’s documents as those will govern what can and cannot be done, how to get it done, and the consequences if the rules are not followed. Make sure to review these Association documents with a qualified real estate attorney who can guide and advise you about obligations and restrictions of a homeowner/condominium owner when buying a home/unit that is controlled by an Association.
By now, I’m sure you have gotten the message: if you have any questions about possible issues with the sale or purchase of a home or with your property and your neighbors, tenants, landlords, or Associations, please consult with a qualified local real estate attorney – whether it is to prevent possible litigation or to help you navigate through the litigation process.”
Sincerely,
Mark C. Mann, Esq. mmann@berlinpatten.com
Berlin Patten Ebling, PLLC
This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.
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