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Three Common Reasons For Real Estate Litigation

On behalf of Sayer Regan & Thayer of Sayer Regan & Thayer, LLP posted on Wednesday, April 27, 2022.

No one wants to get caught up in real estate litigation. It can be time consuming and expensive, but in the event you find yourself involved in any of these situations, call a real estate lawyer right away.

From breach of contract to negligence, there are many circumstances that can lead to the need for real estate litigation. Here we will go over the three most common reasons and explore what each one means.

1. Breach of Contract

In real estate, a breach of contract happens when one party fails to perform any or all of the terms outlined in the contract. It’s common in any real estate transaction for the terms to include details related to things like title clearance, closing date, or assets that are included in the transaction.

The plaintiff may be entitled to compensation for losses they have suffered due to the contract breach. To avoid ever getting to this point, it’s wise to have a real estate attorney on your side who is skilled in all aspects of real estate law and breach of contract in particular. They can review the contract and go over it with their client to ensure everyone understands all clauses and the duties they entail.

In order to sue someone for breach of contract, specific conditions must be met, such as:

• The contract must be valid according to contract laws.
• The party bringing the lawsuit must provide evidence that they performed their part of the duties in the contract even though the other party failed to fulfill theirs.
• The party bringing the lawsuit must prove that the breach was a substantial violation of the terms, and not a minor or technical error.
• The party bringing the lawsuit has to show that their losses were directly caused by the breach with a reasonable degree of certainty.

2. Failure to Disclose Property Defects

The next most common reason for real estate litigation is a failure to disclose any defects present on the property in question. The term “failure to disclose” means the seller failed to provide essential information about the property to the buyer. These disclosures could possibly impact the value of the property in question. In any real estate transaction, sellers and their agents are required by law to make full material disclosures to the buyers and their agents regarding the property being sold.

The seller must provide all disclosures to the buyer prior to closing or they could face a failure to disclose violation as well as a breach of contract by the seller -- a serious legal violation.

Common disclosures include:

Health and safety hazards: Mold, radon, lead paint, and asbestos disclosures, foundation issues, and sewer disclosures
Mechanical issues: HVAC condition or age, water, and appliances
Structural defects: Foundation or roof issues
Flooding: Prior water damage, whether due to environmental or plumbing issues
Renovations: Includes work that has previously been done on the home, permitted or not
Pests: Termites, rodents, etc.
Legal issues: Liens on the property or bankruptcy proceedings

3. Negligence or Breach of Duty

This one refers to the behavior and conduct of real estate agents on behalf of their clients. Agents are legally obligated to act in the best interests of their clients, and not in those of an outside party or salesperson. They are obligated to keep sensitive information about their client confidential, including financial details.

They also must disclose information that could be beneficial to their client, performing all services to the best of their knowledge and abilities. Being negligent in any way could warrant a lawsuit.

Common instances of breach of duty include:

• Real estate agents who act in their own interests and not their clients’
• An agent receives undisclosed commissions or profits
• An agent fails to disclose information about the property, such as material defects or anything that may influence the sale price or decision to purchase
• Dual representation without the client’s knowledge
• Violation of client privacy through the sharing of personal information or financial details
• Failure to submit an offer on a property, or accepting or declining an offer without telling the client

Sometimes, there are “accidental” breaches of duty on the part of the real estate agent, but in these cases, the agent can still be held liable. Yet another good reason to consult with a real estate litigation attorney!

Contact Sayer, Regan & Thayer for Real Estate Litigation Services

Call us today for your free, no-obligation consultation at 866-378-5836. Our real estate litigation attorneys are skilled in anything from adverse possession and boundary disputes to breach of contract or duty.

These materials have been prepared by SRT for informational purposes only and are not intended and should not be construed as legal advice.

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