What Are the Most Common Causes of Real Estate Litigation?

For most people, real estate is their most valuable asset, whether it is a family home, another piece of residential property, or a commercial space used as an investment property. When the property owner passes away, the deceased’s estate will be distributed to the beneficiaries specified in their last will. However, if no legal document is in place, or grieving family members argue over the details of the will, and who should or should not inherit the property, disputes can arise. This can make a painful process even more difficult and contentious. Real estate litigation may become necessary if the parties involved cannot agree on a solution.

If an airtight last will is in place, or the disputes can be resolved out of court, the parties involved may be able to avoid litigation, which can be time-consuming, expensive, and emotionally draining. Unfortunately, this is not always possible. The following are examples of some of the most common causes of real estate litigation:

• Breach of contract: A real estate agreement is a contract, and when both parties sign the contract, they must comply with all of the terms and conditions. This can include everything from the closing date and the title clearance to financing and which assets will be included with the purchase of the property. If either party does not comply with the contract terms, the other party has the right to sue for breach of contract. An experienced real estate lawyer can thoroughly review your real estate sales contract, identify any red flags that may negatively impact you in the long run, and negotiate with the other party to resolve the issue and ensure the best possible outcome.
• Failure to disclose a defect on the property: When selling a property, the owner has a legal obligation to disclose any defects that may not be obvious but could affect the property’s value. If the buyer discovers an undisclosed defect after the property has already been sold, the buyer may file a failure to disclose a lawsuit against the seller. The buyer must prove that the seller was aware of the defect or should have been aware yet intentionally concealed it from the seller. Depending on the nature of the defect, this can be challenging to prove. For example, if you discover mold in the walls, leaks, or other issues after closing on a property, and you can prove that the seller failed to disclose these defects, you may file a lawsuit against the seller seeking damages for the costs to repair the defects.
• Breach of duty or negligence: In some cases, the seller’s real estate agent may be sued for negligence or breach of duty if they failed to act in their clients’ best interest or shared confidential or sensitive information about them. In addition, if a real estate agent makes a mistake due to negligence, which costs their client a significant amount of money, their client may sue for breach of duty and seek damages for the money they lost.
• Specific performance failure: Property owners must perform all obligations stated in the contract. When the seller of a residential or commercial property fails to perform a necessary action, the buyer can take legal action and pursue real estate litigation.
• Boundary dispute: Every piece of real estate has property lines that designate where the legal boundaries of the property end. Real estate litigation can result if those property lines have not been correctly set forth or registered.

In addition to real estate property, the deceased’s estate may include other financial holdings. These may also be disputed if family members disagree about how those investments should be distributed and who should benefit from those assets. The following are examples of common causes of estate litigation:

• Disagreements over beneficiary designations: Whoever has been designated as a beneficiary of a particular property or asset will receive that asset upon the person’s passing. However, disputes often arise when other parties believe there has been misconduct or significant changes made to the deceased’s will towards the end of their life, and there are concerns about the deceased’s state of mind at the time the changes were made.
• Disagreements over unequal distribution of property: This is another situation where disagreements over property may lead to estate litigation. For example, if it is discovered that the decedent gave away property or assets while they were still alive, there are other disagreements that warrant legal action, and this can lead to estate litigation.
• Compensation for services: While estate trustees are entitled to compensation, this may be questioned if they do not execute the trust as directed. This can be a complicated issue to navigate. An experienced estate lawyer can provide guidance and recommend the best legal course of action.
• Disagreements of executor duties: The executor oversees the administration of the decedent’s estate. The decedent generally selects this person. Disputes may arise if the executor and the surviving family members disagree on issues like how the estate is distributed, the amount of time it takes to distribute the estate, and if certain assets are sold for less than market value or without getting permission from the beneficiaries to sell.

How Are Real Estate Disputes Resolved?

Real estate disputes are usually resolved after negotiating a settlement agreement. Depending on the issues that need to be resolved, the lawyers representing both parties may be able to negotiate a resolution without going to court. However, if both parties cannot reach an agreement, they may try to resolve their issues through mediation. However, one or both parties will often decide to litigate the case in court.

The Somerville Real Estate Lawyers at Lyons & Associates, P.C. Represent Clients in Real Estate Litigation Cases

If you have questions about real estate litigation or require legal representation in an estate dispute, do not hesitate to contact the Somerville real estate lawyers at Lyons & Associates, P.C. We will determine whether you have a legitimate claim, recommend the most effective legal course of action, and protect the assets and property to which you are entitled. To schedule a free consultation, call us today at 908-575-9777 or contact us online. Located in Somerville, Morristown, and Freehold, New Jersey, we serve clients throughout Somerset, Woodbridge, Morristown, Parsippany, Rockaway, Short Hills, Chatham, Randolph, Madison, Morris Plains, and Monmouth County.

• Category: Real Estate