A real estate contract dispute is when parties involved in the purchase or sale of a property don’t see eye-to-eye or meet their obligations, which are usually outlined in the agreement. This can cause stress, financial losses, and sometimes even legal proceedings.
To ensure you don’t end up in court, here’s what you need to know about real estate contract disputes. Read the rest of this article to explore the different types of real estate contract disputes, learn how to prevent them and deal with them, and when you should call a lawyer.
What are the Most Common Real Estate Contract Disputes?
Real estate arguments over contracts can arise for various reasons. Some of the most common include:
- Lack of defect disclosure. Sellers need to let buyers know if there are any significant problems with the property, from structural issues to hazards on site.
- Contract breach. This is when one party violates terms in the agreement, such as concerning project deadlines.
- Deposits. The buyer will make a deposit to show they’re interested in purchasing the property, but if the transaction doesn’t go through, this could cause arguments between parties over who is entitled to the money.
- Ownership. Title defects can cause a lack of clear property ownership, giving the buyer hassles and causing disputes.
- Inspections. Parties might disagree over the inspection process or its results.
What Should You Do During a Real Estate Dispute?
To protect yourself and avoid legal or financial woes, there are some things you should do immediately if you find yourself in a real estate dispute.
Review Your Real Estate Contract
This document will outline important terms and clauses governing the property deal. See if the other party is in violation of anything mentioned. A contract review by a lawyer will help you to see your duties and rights as mentioned in the contract, while the lawyer can advise you on the best dispute-resolution method.
If you require a contract review, you should post a request on ContractsCounsel, an online legal network connecting vetted lawyers with clients for contract drafting and review. Posting is free and you’ll gain peace of mind by having your agreement analyzed by an experienced, skilled lawyer with years of experience in real estate disputes.
Keep Track of All Communication
You should try to create and maintain a record of communication with the other party. Write down notes in meetings, and save all emails and letters. This record will help you gain a bit more clarity on the situation and can help you if you need to seek legal advice. Having proof of the dispute can make a huge difference in the success of your claim.
Send a Letter to the Other Party
You should speak to the other party about your concerns and the issue, such as if they breached the contract. It’s advisable to send them a written letter so that you have proof of it. In the letter, you should request action so that the situation can be rectified, helping you both to move forward.
Drafting this notice should be taken seriously as it requires a professional approach without heated emotions that can cause you legal trouble. It’s wise to get it drafted by a lawyer from ContractsCounsel so that it’s legally compliant, clear, and fair to both parties.
Chat to a Lawyer
If your attempts at resolving the issue don’t work, you should contact a real estate lawyer. They will help you by:
- Negotiating with the other party to reach a resolution. A letter from a lawyer oftenl carries more weight and triggers a response.
- Reviewing all documents to explain your rights and gain perspective on the situation, such as if you’re dealing with a breach.
- Recommend alternative dispute-resolution methods.
- Help you collect appropriate evidence to validate your claim.
How are Real Estate Contract Disputes Handled?
To deal with a real estate contract dispute that can’t be resolved through informal conversation, you have various options. Your lawyer will help you select the best option according to your specific situation and concerns.
Alternative Dispute-Resolution Methods (ADR)
Alternative dispute resolution is about trying to keep your dispute out of court. There are two popular types that clients find effective.
- Mediation. This is a private yet informal conversation with the other party that involves the presence of a neutral third-party mediator. They won’t enforce a resolution but encourage you both to find a solution yourselves. By the end of the mediation, you might agree on a settlement.
- Arbitration. A bit more formal than mediation, arbitration involves hiring a neutral third-party arbitrator who will listen to both parties’ evidence and then deliver a final, usually legally-binding, resolution to help you move forward from the disagreement.
Litigation
If ADR methods don’t work, your lawyer will help you navigate litigation. This is usually a last resort because it’s time consuming and costly.
Your lawyer will create a litigation strategy based on your situation. For example, you might be able to file a lawsuit against the other party to recover damages or end the contract and get a refund of your deposit.
How Can You Prevent a Real Estate Contract Dispute?
To guard against real estate contract disputes in the future, there are important things you can do.
Review Documents Before Signing
Make sure you understand all the contract terms and clauses, and how they will affect you. Since these contracts can be complex, you want them reviewed by a lawyer before you sign.
Document all Conditions
You don’t want to rely on verbal agreements that can lead to misunderstandings or disputes in the future. If you and the other party agree on something, write it down into the contract so that it’s legally enforceable.
Do you need a real estate lawyer?
If you’re in the middle of a stressful real estate contract dispute, you should seek legal guidance by contacting a lawyer on ContractsCounsel. All lawyers are vetted on the platform, and have many years of experience in assisting clients with real estate contract disputes. They’ll protect your interests, help you find the best solution to the dispute, and strive to keep your argument out of court.
