Real estate litigation is a broad practice area and encompasses many types of litigation. The laws, both statutory and judge-made, concerning real property are often very different and written independently of other types of laws because of the unique nature of real property, (unlike “chattels” or any type of personal property, every piece of real estate is one of a kind and cannot be duplicated).
The purchase agreement between a buyer and seller of real estate is governed by the general principles of contract law. An agreement to sell a piece of real estate falls within the Statute of Frauds which requires certain types of contracts to be in writing in order to be valid. Thus, in order for a court to recognize a real estate transaction, the agreement must be in writing, with a signature, and full performance by one side. If one party has only partially performed, the Statute of Frauds can still be satisfied if one party can show partial performance, by either making a partial payment, taking possession of the real estate or making improvements to the property, (the same principles apply for leasing real property). If the lease is for a period longer than one year, the contract must be in writing.
Because of the unique nature of real property and laws surrounding it, remedies for many types of claims concerning real estate are also handled differently than other types of civil claims. Most importantly, specific performance, the requirement that a party performs on a breached contract, (as opposed to simply paying money damages), is an especially critical remedy in many real estate disputes.
Many real estate purchase agreements have a mandatory mediation clause that requires the parties to attempt to mediate any dispute prior to litigating the disagreement (mediation involves a neutral party who attempts to resolve problems or issues that the parties may believe could lead to a lawsuit). This can often present a problem because a lis pendens, which places an encumbrance on a property so that it cannot be sold, is only available in the context of litigation, once a lawsuit over the disputed real estate has been filed and is pending. Therefore, an attempt to mediate can delay the filing of a lawsuit and consequently delay the filing of a lis pendens. The best course of action in a situation like this is to contact an experienced real estate litigation attorney who can advise you concerning the best way to preserve your rights while simultaneously adhering to any purchase agreement that may be in place.
Realty and Real Property
The term “real estate” is often used interchangeably the terms “realty” and “real property” to refer to land and buildings on the land. However, real estate covers more than tangible objects generally thought of as real property. For example, the term real estate covers land, things attached to the land like buildings, houses, trees, as well as rights and interests legally attached to the real property. For example, owning a piece of land gives the owner more than possession of the physical land and the structures on it. The owner, when he or she takes possession, is conveyed the right to use and enjoy your land, however, he or she sees fit, (subject to statutory and zoning restrictions), including the right to use the airspace above the land, (as well as certain rights to the ground beneath the land).
Parties to a Real Estate Dispute
While many lawsuits involving real estate can be avoided with careful and strategic contract formation, there are times that disputes cannot be avoided for any reason.
Our firm regularly represents various types of parties in real estate-related litigation, including:
- Architects and engineers;
- Real Estate Agents; and
- Real Estate Brokers
Many different types of disputes related to different types of real estate transactions can occur. Real estate disputes can concern various types of properties, (single family residential, multi-family residential, commercial and industrial), and can stem from disagreements that take many forms such as:
- Construction defect allegations;
- Construction liens;
- General contractual disputes between buyer and seller;
- Contractual disputes between agents and brokers regarding commission;
- Title disputes between parties or between title insurers and parties;
- Breach of escrow provisions;
- Land use disagreements;
- Zoning restrictions; and
- Indemnity claims.
Our firm regularly pursues real estate claims and defends them, and our experience allows us to assist our Clients to a degree that many attorneys with limited real estate experience cannot.
Significant litigation experience is especially valuable in real estate disputes because of the high number of types of disputes (as opposed to a personal injury claim stemming from a car accident; where an obviously more limited number of factual scenarios exist).
Real Estate & Commercial Property Litigation
When real estate prices increase in Los Angeles County, the number of real estate disputes will increase as well. While foreclosure actions (and resulting wrongful foreclosure actions as well) will decrease over time, other types of problems arise.
As the cost of homes goes up, the number of construction projects will also rise, leading to more disputes and lawsuits over performance of duties and terms (these disputes can occur between agent and broker, agent and seller, agent and buyer, seller and buyer, contractor and owner, and contractor and sub-contractor). This occurs with both residential and commercial real estate transactions. While commercial real estate projects often tend to be larger than an average residential project, significant amounts of litigation exists in the context of residential construction as well.
Residential construction projects often have different requirements than commercial projects that can lead to litigation, often because increased regulations or criteria exist for structures where people will live, as opposed to regulations for other types of buildings. Further, disclosure requirements in residential real estate transactions are numerous, and a lack of disclosure can lead to litigation.
Another result of prices increasing in the real estate market is that more homeowners will no longer be “underwater” in their homes and will instead have increased equity, leading to disagreements between co-owners regarding the percentage of equity each is entitled to.
In addition to the plethora of issues related to commercial real estate transactions, a number of issues that lead to disputes arise regularly in the context of residential real estate. In California, a common issue in residential real estate litigation is a failure to disclose various items. The required disclosure list is very long, whereas the items exempted from disclosure are more concise. In California, the following items are not required to be disclosed in the context of a residential real estate transaction:
- Foreclosure sales;
- Court ordered transfers;
- Transfers (except by former owner) by a fiduciary involved in estate administration, a guardianship, conservatorship, or trust.
- Transfers to a spouse or to a person or persons in the lineal line of consanguinity;
- Transfers resulting from a judgment of dissolution of marriage, or of legal separation;
- Transfers from an property settlement agreement incidental to such a judgment (above);
- Transfers from one co-owner to another;
- Transfers by the State Controller for unclaimed property; Transfers resulting from failure to pay taxes; and
- Transfers to or from any governmental entity.