Is it Time to Pursue Real Estate Litigation?

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By: Bill Henry
PublishedOct 10, 2022
3 minute read

Real estate is not just about the buying, selling, and leasing of property. It’s about building and sustaining wealth. Many people invest in real estate, but not everyone knows what they’re doing or intends to be fair. Disputes are common. Some can be resolved in good faith negotiations. Some can’t. Is it time for you to pursue real estate litigation? We’ll explore the answer to that question here.

Bottom Line:

Any impasse or dispute involving real estate can harm your financial interests. Real estate litigation can untie the knots holding up your investment.

In this Guide:

Get in Touch With a Real Estate Litigation Attorney

If you’re considering pursuing a real estate lawsuit or you need a lawyer to defend you in one, Robinson & Henry Real Estate Lawyers have the experience to guide you to a satisfactory outcome. Call 303-688-0944 to begin your case assessment.

Four Common Causes for Real Estate Litigation 

Real estate litigation is any type of dispute arising out of real property or an interest in real property. Real property is the legal term for a fixed parcel of land and everything that is permanently attached to it.

Disputes can arise during or after the acquisition of a property or from disagreements over ownership rights or other interests in a property.

Common disputes leading to real estate litigation include:

Breach of Contract 

Real estate transaction agreements are contracts. These contracts lay out terms and conditions all parties to the sale must abide by relating to title clearance, financing, closing date, and any assets included in the purchase of the property. When one party fails to abide by the contract’s terms, the other party may sue for breach of contract.

The wronged party (plaintiff) must prove they have fulfilled their contractual obligations while the other party (defendant) has not.

Colorado courts have held, particularly in Western Distribution Co. v. Diodosio (Colo. 1992), that a breach of contract lawsuit must show the following four elements:

  1. a contract existed
  2. plaintiff fulfilled their contractual obligations or was justified in not fulfilling them
  3. defendant failed to fulfill their contractual obligations
  4. plaintiff was damaged as a result

Failure to Disclose Defects

In Colorado, a seller must let the buyer know about any known defects that could hurt property value, such as water damage, mold in the walls, holes in the roof, bad wiring, toxic insulation, and more.

When a buyer finds a previously undisclosed defect after closing on the property, they may pursue legal action against the seller.

To succeed with the lawsuit, the plaintiff must prove the defect was known to the defendant – or reasonably should have been known – and that it was deliberately concealed.

Breach of Duty or Negligence

Agents and realtors are legally obliged to act in the best interest of their clients. They must prioritize their clients’ interests over those of a salesperson, a third party, or even themselves during a real estate transaction.

This duty goes even further. Agents must protect their clients’ sensitive data, such as financial details, and disclose any beneficial information to the client. Any poor performance or neglect by an agent that leads to an adverse outcome or a loss could warrant a lawsuit.

Boundary Disputes

All parties to a real estate transaction should understand the property’s legal boundaries and stay within them. It is possible during a transaction to detail incorrect boundary lines. It’s even more likely that people who use the property will adhere to a practical boundary that’s not consistent with the registered lines.

Boundary disputes can lead to lawsuits. The best way to avoid litigation is to research the property’s actual legal boundaries, or have a lawyer do it, and warn of any potential disputes that might arise.

How Litigation Affects Titles and Deeds 

While real estate litigation can resolve many conflicts, there’s one hitch: lawsuits take time, leaving the disputed property in a state of limbo, or with a “clouded” title.

Filing a Lis Pendens

When two or more parties are in dispute over real property, one of them may file a lis pendens. In Latin, lis pendens means “suit pending.” A lis pendens is a warning flag for the property’s potential outside buyers or investors.

A lis pendens prevents the owner of a disputed property from disposing of their interest. It puts possible buyers on notice that a legal dispute hangs over the property, and could affect its value. It does not prohibit anyone from buying the disputed property, but it makes clear they could be subject to the outcome of the litigation. Colorado Revised Statutes 38-35-110

Removing Lis Pendens 

A lis pendens can be removed only with the consent of the party who filed it or by obtaining a court order after showing:

  • there has been an unreasonable delay in the litigation
  • the lis pendens has not been prosecuted in good faith
Quieting a Title 

Quieting a title is filing a circuit court action to remove competing claims or challenges to title to real property. A quiet title is a “clear” title, free from dispute or ambiguity.

Quiet title actions are common after mortgage lender disputes, the death of a title owner, cases of adverse possession, and long periods of time where the property has been unoccupied or unclaimed.

Adverse possession is whenever someone occupies property they do not own with the intention of keeping it as their own, regardless of what the title says.

Get a Real Estate Litigator to Handle Your Real Estate Dispute

At Robinson & Henry, we focus on making our clients whole again. If you’ve been damaged financially by a bad real estate transaction, we can help. Our experienced and unyielding attorneys may pursue a number of different actions to achieve this goal, including attorneys’ fees. Do you want a resolution? Call 303-688-0944 to begin your case assessment.

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