What is a Real Estate Lawsuit?
Real estate laws vary by state and are largely governed by state rather than federal laws. Violations of the laws can result in a criminal or a civil lawsuit. Negligence in real estate can also lead to a lawsuit. A real estate lawsuit is any action related to the buying, selling, or renting of residential or commercial property.
When Should I File a Real Estate Lawsuit?
Real estate transactions can go smoothly or end in disputes and legal disagreements. When you cannot resolve the issue, you may need to file a lawsuit. Some situations that may warrant a lawsuit include:
- The seller or their agent failed to disclose a serious property defect before you bought it.
- A real estate agent intentionally misled or deceived you about a property.
- A real estate agent shares your personal information with a seller, causing them to raise the property price.
- A buyer walks away from the contract after agreeing to buy your home.
- A home inspector was negligent in failing to uncover a defect before you bought a home.
- You suffered injuries from an accident at an open house or home viewing.
- A developer or contractor breached a contract to build your home or built it with defects and cheaper materials than promised.
- A real estate agent discriminated against you based on protected factors, like race or disability.
- You have a dispute with the municipal government over zoning.
- You have a dispute with a neighbor over property boundaries.
How Can I Avoid a Lawsuit?
You may be able to avoid a lawsuit by hiring a lawyer to negotiate and communicate with the other party. For instance, if you have a home defect you believe should have been disclosed by the seller or realtor, your lawyer can send them a demand letter and then negotiate a solution. You can also request mediation, which is a type of dispute resolution that does not involve the court system.
Where Should I File a Real Estate Lawsuit?
A lawyer can advise you on this, but your two main choices are small claims court and a state court. Smaller issues can usually be resolved in small claims court. You don’t need a lawyer to take this action, and in fact, in some states, lawyers are not allowed.
The process of going through small claims court is much faster and easier than state court. The downside is that recovery of damages is limited. If your issue amounts to no more than $15,000, it could make sense to take this legal action. The actual limit on claims varies by state, so check the law before you make that choice.
Bigger cases go to the state court. You’ll need a lawyer to represent you. You may be going up against a development company, a real estate agent, or a commercial property owner with strong legal backing. A real estate lawyer can file your lawsuit and take you through the process with the best chance of recovering damages.
Who Will I Sue in a Real Estate Lawsuit?
There are several possibilities for who you may sue in a real estate lawsuit. The defendants depend on the situation and who is liable. Some possibilities include:
- Your real estate agent
- The real estate agent representing the other party
- The seller of a property
- The buyer of a property who backs out of a contract
- The home inspector
- A municipal government or government agency
- A contractor or developer
- A construction company
- A housing development association
- Your neighbor
What is the Statute of Limitations on Real Estate Lawsuits?
The time limit on filing a lawsuit over a real estate issue depends on the nature of the complaint and the state. State laws vary on statutes for civil lawsuits, between about one year and six years. The time limit also varies depending on the law that applies. For instance, a negligence claim may have a different statute of limitations than a claim for breach of contract. Talk to a lawyer as soon as possible to ensure you do not miss the opportunity to sue.
What Are the Steps in a Real Estate Lawsuit?
The steps in a real estate lawsuit depend on the situation but generally follow the guidelines of any civil lawsuit. Before filing, your lawyer will likely recommend you try to settle the dispute. They can represent you and get a good deal to avoid a lawsuit. If the other party is unwilling to work with you, your lawyer can begin a lawsuit with an official complaint.
A complaint notifies the defendants of the action against them. It also triggers a period of investigation and discovery. Both sides collect evidence, speak to witnesses and experts, and hold depositions. They may also share information.
If the defendants are willing to negotiate at this point, your lawyer will try to get you a fair deal, once again, to avoid going to court. If the negotiations fail, you can go to trial and get a jury verdict. It is usually in everyone’s best interests to settle, and most cases do not go to trial.
Damages and Specific Performance
Many civil lawsuits are filed to recover damages. This may be the case in a real estate lawsuit. For example, if your new home has asbestos that should have been disclosed, you may seek damages to cover abatement costs.
In other cases, you may seek specific performance, requiring the defendant to perform a specific act as outlined in a contract they breached. A judge may allow this if the damages would be inadequate to solve the problem. For example, if a seller agrees to let you buy their house and then backs out, you may sue to force them to go through with it. Because the house is unique, damages do not remedy the situation.
If you think you have a case for a real estate lawsuit, talk to a lawyer with expertise in this area of the law. They can help you understand your case if it is strong enough for a lawsuit and what steps you should take next.