Tips on Resolving Real Estate Disputes
Disputes involving real estate are often costly, and the detrimental effects flowing from them frequently extend far beyond the land itself. The best way to resolve such disputes is to avoid them in the first place. Clear communication and maintaining a flexible attitude go a long way toward achieving that objective.
But disputes sometimes erupt despite your best efforts. When they do, the wisest course of action is to consult immediately with an attorney who has experience in resolving the type of dispute you are involved in. That will often prevent a dispute from growing into a problem that can only be resolved in a lawsuit or an arbitration.
Breach and Disclosure Issues
Real estate disputes often arise from a party’s perceived failure to fulfill his contractual promises. Other common problem areas include contingencies in a contract that give a party the option of canceling a contract, and a seller’s failure to disclose defects in property, or a buyer’s failure to disclose issues that affect his or her ability to perform contractual obligations. When these issues arise, they can quickly expand into disputes that cannot be easily resolved.
Disputes that Arise Before Closing
Many of these disputes arise just before closing on a real estate sale or lease. This is because the contracts associated with these transactions are specifically designed to address issues that commonly result in disputes. Often, such contracts will assign liability for such issues to one party or the other after closing. Closing thus becomes the event that where each party must choose either to take a stand or to accept the consequences of whatever issue is at stake. If they choose to take a stand, a dispute has already arisen.
Disputes that Arise After Closing
Other disputes arise after closing. These typically occur when one or more parties fail to fulfill their promises, or when a party discovers a problem that another party should have disclosed before closing.
Methods to Resolve Disputes
If the parties cannot settle their dispute by mutual agreement, they generally have three options to resolve the dispute:
- Mediation: In a mediation, the parties meet with a neutral third party who will try to persuade the parties to agree to a solution. Some contracts have mandatory mediation requirements, but the parties are always free to use mediation as a means of resolving a conflict. It is important to understand that a mediator does not decide who is right or wrong, or how issues should be resolved. A mediator simply tries to help the parties negotiate a mutually acceptable solution.
- Arbitration: An arbitration gives a third party (the arbitrator) the power to make a final decision on how a dispute should be resolved. The arbitrator listens to both sides’ arguments and evidence, and then decides who wins and who loses. Many commercial contracts require mandatory arbitration of any dispute that arises. Unlike a court decision, there is generally no way to appeal an adverse decision by an arbitrator, and that is an important consideration in deciding whether to accept a mandatory arbitration clause in a contract.
- Litigation: The other method for resolving disputes is to file a lawsuit. In a lawsuit, a judge or jury will decide who is wrong and who is right. Parties who are dissatisfied with the result have a right to appeal the decision to the Arizona Court of Appeals. There, a three-judge panel reviews the lower court’s decision, and may reverse it or allow it to stand. The right to appeal is an important consideration in many real estate contracts, and should not lightly be discarded. Because most real estate disputes involve the interpretation of contracts, the losing party in a lawsuit will often be required to pay some or all of the prevailing party’s attorney’s fees.
Resolving real estate disputes often requires considerable thought and effort. If you have a real estate dispute, be sure to consult with an attorney at Udall Shumway, PLC to explore your options.
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding Resolving Real Estate Disputes, or any other litigation matters, please feel free to contact Udall Shumway PLC at 480.461..5300, or log on to udallshumway.com, or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.