What Are Some Situations That Could Lead To Litigation When Buying Or Selling A Home?
A common situation that could lead to litigation is when the Seller tries to keep the down payment or refuses to refund the down payment because they believe that the Buyer has defaulted on the Buyer’s obligations in the Contract of Sale. For example, if a Buyer tries to back out of the deal for no good reason or does not pursue a mortgage diligently as required by the contract, the Seller may try to retain the down payment based on this default. Certainly, if the Seller decides they wish to pursue this avenue, the result is often a lawsuit and litigation.
Also, If the Seller refuses to close after signing the Contract of Sale, the Buyer may sue for a specific performance, which is a lawsuit seeking a Court Order effectuating the transfer of the property from Seller to Buyer. If a Buyer has his or her heart set on a certain property and they have not defaulted on the Contract of Sale, this option is available to the Purchaser.
It should be noted that litigation is often very time consuming and expensive. It is often a lose-lose for all parties involved. Even the winning party has lost precious time and spent thousands of dollars or even tens of thousands of dollars on legal fees. Therefore, it is usually a good idea for both parties to compromise and agree to an out of court solution where possible.
Is Litigation The Only Option To Resolve A Real Estate Dispute?
Litigation is not the only option to resolve a real estate dispute. The first step is for the parties to pursue an out of court resolution, which often requires all parties to compromise. Usually, if a real estate dispute arises, the Buyer is attorney and the Seller’s attorney will negotiate and try to reach a resolution. Litigation is expensive, and it should be avoided whenever possible. Even when parties start litigation, cases are often settled before it goes to trial. The parties can get exhausted or dejected if the case drags on and the attorney fees and related expenses grow large.
Although this is not the case with the standard residential real estate Contract of Sale used in Westchester County, NYC, Long Island, or Connecticut, there may be a contract provision that requires the parties to engage in mediation or arbitration should there be a disagreement and controversy between the parties. Even if there is no contract provision, the tools of mediation and arbitration can be useful tools to avoid litigation. Mediation and arbitration are often referred to as Alternative Dispute Resolution and can often save the parties money, time, and stress associated with litigation.
However, there are times when the parties to a real estate contract cannot settle their differences and the case goes to Court and the Court will enforce the terms of the Contract of Sale based on the terms of the contract, statutory law, caselaw, and the facts of the specific case.
For more information on Issues Litigated In A Real Estate Transaction, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (800) 619-3570 today.
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