Residential real estate transactions give rise to many similar disputes as in commercial real estate. However, there are some key differences, including the fact that the buyers and sellers tend to be less sophisticated than in the commercial arena. Some common residential real estate disputes are as follows:
Fraud and Non-Disclosure: A common form of fraud or non-disclosure is when the seller fails to disclose material defects in the property. The fraud or non-disclosure may also relate to issues such as title, zoning or permitting, which are covered in more detail below.
Rescission and Specific Performance: Depending on the type of misrepresentation, one of the parties to the purchase agreement may seek to cancel the contract through rescission. Or the opposite may occur, where one party seeks to force the other party to proceed with the agreement through specific performance.
Title Disputes: Often there are unsettled title issues that impede the ability of one party to buy or sell the property. These unsettled issues act as clouds on title, and a quiet title action may be necessary to remedy the issues.
Government Regulations: Zoning, land use and permitting are all forms of government property regulations which can give rise to disputes.
Construction or Renovation Disputes: With new home construction, disputes can arise between the builder and the new owner, often involving express or implied warranties. The same types of disputes may occur with major home renovations.
If you are having trouble resolving any of the above on your own, seek legal guidance from a skilled attorney who can assist you with handling your residential real estate disputes.
Challenges Regarding Drafting or Execution of Purchase Contracts
Real estate disputes often start with the drafting of the purchase-sale agreements. If the real estate contract is not clear and precise, this can leave room for misinterpretation of the contract terms. Some common problems with real estate contract drafting are as follows:
Indefinite Contract Terms: If a court finds that a contract term is indefinite, this may result in the contract term being unenforceable. For example, a contract term that stated a home seller would remain in the home and make rental payments “as long as necessary until the seller finds another home” was found too indefinite for enforcement by the Georgia Court of Appeals. It is possible for the indefinite contract term to render the entire contract null and void.
Ambiguous Contract Terms: Instead of being indefinite, a court may find a contract term is ambiguous. An ambiguous contract term is capable of more than one reasonable interpretation. Unlike an indefinite contract term, an ambiguity will not result in that contract term being nullified, nor will it cause the entire contract to be nullified. Instead, the court will attempt to select the correct interpretation based on accepted principles of contractual law, such as the parties’ intent. It is easy to see how ambiguities in real estate contracts can result in disputes, many of which can only be resolved through litigation.
Contract Drafting Mistakes: Beyond lack of clarity or ambiguity, real estate contracts can also contain drafting mistakes that do not reflect the parties’ original intent. Disputes arising from contract drafting mistakes can turn on whether the mistake was mutual or unilateral.
If you have a real estate dispute that arises from an issue with the drafting or execution of the purchase-sale agreement, it is important for you to spot the legal issues as soon as possible in order to determine the most appropriate course of action.