What Is a Real Estate Lawsuit?
A real estate lawsuit is a claim brought against a party to resolve an issue that involves a house, land, or some other form of real property.
Real estate lawsuits can include both commercial and residential real estate and cover a variety of disputes involving real estate transactions, property boundaries, property defects, or seller non-disclosure.
Most real estate lawsuits never end up in court. Instead, they are resolved through dispute-resolution processes like mediation.
If mediation does not work, both sides will have a chance to convince a judge or jury that they are right and receive a formal judgment.
Real Estate Lawsuit Case Types
Real estate lawsuits involve all aspects of real estate law and the real estate industry.
Some broad real estate case types include:
- Bankruptcy, which often involves foreclosures and property liens
- Class actions, which are filed by a group, or class, of people who have suffered similar injuries because of a defendant’s actions.
- Commercial real estate, which includes stores, office buildings, and other properties used to conduct business
- Construction/development, which involves contractors, subcontractors, architects, and others who play a role in building and developing properties
- Environmental, which deals with issues like water and soil contamination
- Investment and financing, which involves financing agreements or investment properties
- Landlord and tenant, which deals with lease agreements and tenant rights
- Residential real estate, which includes houses, apartments, and condominiums
- Real estate agents and brokers, which includes issues such as misrepresentation, fees, and broker commissions
A real estate class action lawsuit alleges that the National Association of Realtors and several real estate brokerages conspired to raise commission rates. The suit seeks more than $13 billion in damages on behalf of home sellers.
The real estate commission class action — Moehrl v. The National Association of Realtors — includes home sellers who paid a commission from 2015-20 in states including Colorado, Florida, New Jersey, North Carolina, Ohio, Pennsylvania, Texas, and Virginia. The defendants include HomeServices of America, RE/MAX, and Keller Williams.
Real Estate Lawsuit Causes
A number of unresolved issues involving the real estate industry can lead to a real estate lawsuit.
Here are some of the most common issues that can cause real estate lawsuits:
- Agents: A real estate agent lawsuit can involve commissions, failure to disclose property defects, fraud, misrepresentation, and other issues.
- Contracts: A failure to uphold one’s contractual obligations is known as a breach of contract. A renter who fails to pay rent or a property owner that refuses to transfer a title could be sued for breach of contract.
- Construction: Homeowners may file a real estate lawsuit against contractors or subcontractors for poor quality work, design errors, or failure to meet building codes or regulations.
- Foreclosures: Lenders can bring lawsuits against borrowers who fail to pay their mortgages with the goal of taking back the property and reselling it to recoup the financial loss.
- Landlord and tenants: Conflicts between landlords and tenants often involve issues like an increase in rent, evictions, security deposits, and terms of a lease.
- Neighbors and co-owners: Neighbors or property co-owners may disagree over rights of access, property lines, shared expenses, or property improvements.
- Non-disclosure: Home buyers may be able to sue for non-disclosure if the seller fails to reveal an issue that poses a safety risk or affects the value of the property. In these lawsuits, the buyer is usually seeking damages (compensation) or to rescind (take back) the contract.
- Property boundaries: People may disagree about property lines or related issues such as easements or encroachments (building or extending into a neighboring property line).
- Titles: Common title issues include ownership disputes, liens, and encumbrances (limits to what an owner can do with a property). Resolving title issues can, in some cases, affect a property’s marketability.
- Zoning: Landowners sometimes file lawsuits to challenge government regulations that may affect their property. Zoning issues often include permitted use of land, development restrictions, or zoning regulations that impact the use of the property or its development potential.
Regardless of the cause of your dispute, a real estate attorney can help you protect your rights and represent you in a real estate lawsuit. Additionally, they can advise you on how to protect real estate from a lawsuit.
Parties in Real Estate Lawsuits
Several different parties may take part in a real estate lawsuit. The person or business who files the lawsuit is known as the plaintiff, while the party the suit is being filed against is known as the defendant.
Parties who are often involved in real estate lawsuits include: If parties cannot be present during the lawsuit process for some reason, they may have a spokesperson appointed to serve on their behalf. Each lawsuit will resolve a bit differently from others since the remedy for each case is unique to the situation and the claim. However, here are the basic steps involved in a real estate lawsuit. Before starting your lawsuit, you should review any relevant evidence, including photos, contracts, property records, or written correspondence with the party you’re bringing the claim against. Tip: Scour public records to find vital information about the property’s title history, if applicable. The title history may offer information about ownership, liens, and encumbrances that may affect the title and your case. A real estate lawyer can review your case and provide legal advice on the best way to resolve your dispute. Many real estate lawsuit cases are complex. An attorney experienced in real estate matters can improve your chances of a favorable outcome. Attempting to resolve your real estate case through arbitration or another alternative dispute-resolution method before heading to court will save you time — and likely money and stress. Some real estate contracts contain mandatory arbitration agreements, which require parties to negotiate with each other to resolve a problem. Again, a real estate lawyer can help you with this process. If you have been unable to resolve your dispute, a real estate law firm or lawyer can file a lawsuit on your behalf. Your lawyer can advise on where to file for the best results and keep you informed as your suit moves forward. Your lawyer may try to settle your lawsuit. A settlement can occur at any stage of the litigation. The stronger your case, the more likely the other side will agree to a settlement. Some advantages of real estate lawsuit settlements include: Real estate lawsuits offer a number of protective and restorative benefits when successful. Some benefits of taking legal action include: People who file lawsuits with help from a real estate lawyer will be able to rely on the lawyer’s guidance and expertise. An experienced lawyer can help you get through the real estate lawsuit process with ease and fight for the best possible outcome. A real estate dispute can be frustrating and costly. Knowing the potential benefits of a real estate lawsuit can help you determine if filing a suit is the right decision for you. It’s difficult to say how long a real estate lawsuit will take. However, it’s not unusual for a case to take a year or more to make its way to a courtroom. The court in which the suit is filed plays a large role in how long the lawsuit will take. A real estate lawyer should be able to tell you the timeline for your specific lawsuit. The most common real estate disputes are breach-of-contract disputes, boundary issues, non-disclosure issues, and landlord-tenant conflicts. Other disputes stem from issues with real estate agents and brokers, such as commission rates, problems with a “for sale” sign, home values, and non-disclosure agreements. A real estate broker lawsuit is one way for affected homebuyers and sellers to obtain justice. You may be able to settle a real estate lawsuit by negotiating with the other party or through arbitration or mediation. These methods are less expensive than taking a case to court and result in quicker resolution. No, you don’t need a lawyer for a real estate lawsuit. However, working with a lawyer provides several advantages as real estate litigation can be complex and difficult for the average person to understand. A lawyer can offer legal services such as drafting a lawsuit, filing it in the right court before any deadlines, and negotiating on your behalf as the suit moves forward. They can also represent you in court and fight for the best possible outcome. The cost of a real estate lawsuit depends on several factors, such as the case’s complexity and length and the lawyer’s fees. It is always best to seek a real estate law firm with an upfront fee agreement before signing a contract with them to avoid any unanticipated costs.
The Real Estate Lawsuit Process
1. Review Case Evidence
2. Meet With a Real Estate Lawyer
3. Consider Alternative-Dispute Resolution
4. File a Real Estate Lawsuit
5. Engage in Settlement Negotiations
Benefits of a Real Estate Lawsuit
Real Estate Civil Lawsuit FAQs
How long does a real estate lawsuit take?
What are the most common real estate disputes?
How do you settle a real estate lawsuit?
Do you need a lawyer for a real estate lawsuit?
How much will a real estate lawsuit cost?
