Real estate law is hundreds of years old, dating back to the days of early English kings and queens. One might think that in light of that ancient heritage there would not be many real estate disputes for the courts to settle. One would be wrong. For whatever reason, real estate is one of the most litigious areas of business, and the courts spend great amounts of time settling real estate cases.
One common area of dispute involves sales of real estate that for one reason or another don’t go through. It is common in most real estate transactions for the intended buyer to put up a deposit in escrow to show their good faith, and to compensate the seller in the event of a default. Many sales don’t succeed, either because the buyer finds something out about the property that convinces him or her to back out, or because the buyer is unable to qualify for financing. Often, the seller feels betrayed and wants to keep the deposit. The escrow holder may not know what to do, and sometimes initiates a special proceeding in the court called an interpleader, which is where they go to the court and ask the court to determine who is entitled to receive the deposit money.
Another common dispute involves homeowner’s associations. The HOAs are almost like another branch of government. They have elected officials, rules, and enforcement. Unlike the government, there are few checks and balances on them. Disputes with HOAs often come about when a homeowner makes changes to his house or townhouse that is not strictly within the rules of the association. For example, a homeowner may paint their front door a non-approved color, or erect a fence that his higher (or lower) than the HOA supports. The HOA sometimes has very arbitrary enforcement policies – some minor violations are tolerated, while with the disfavored homeowners the rules are strictly enforced. The association’s committees can be dominated by factions and the neighborhood power elite. Unfortunately, the homeowner on the receiving end finds out that the rules of the association were written years ago by lawyers who had in mind to make it impossible to fight the association. In fact, most associations win in court and often collect attorney’s fees from the beleaguered homeowners.
Lot line disputes can come up with neighbors even on friendly terms. Although surveying has progressed a great deal in the past 30 years, the earth shifts and fences, trees, and driveways are sometimes found to be in a different parcel than believed when a house was being purchased. Pouring over old plat diagrams can be an exercise in discovery. They often are in conflict with one another, even though the same property is being measured only a few years apart.
What happens when a homebuyer discovers, shortly after moving in, that the house he or she just purchased is riddled with ants/termites/rodents/or other pests? It can be an occasion for “let the buyer beware.” Even if the home were inspected prior to purchase, the home inspection contract usually contains an escape clause relieving the inspector from responsibility for any defects or infestations that may be missed. Similarly, the sales contact often absolves the seller from responsibility since the opportunity for inspection was given.
Real estate, because of the high dollar amounts typically at issue, often gives rise to legal disputes.