Real Estate Dispute Resolution Methods

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 What Are Real Estate Disputes?

Real estate disputes are legal conflicts that involve real property. Real property is property that is affixed to the land or a piece of land itself, as opposed to personal property, which can be moved. These types of disputes can involve properties that are worth large amounts of money. Many of these disputes can take a long time to resolve, and may involve many financial and court resources. Thus, it is often common for people involved in a real estate dispute to seek alternative forms of dispute resolution.

For instance, many real estate disputes involve the breach of a contract pertaining to the sale of real property. In such cases, both real estate laws and the law of contract remedies may apply, making the situation more complex.

How to Resolve Real Estate Disputes

The first step in any dispute is to attempt to negotiate a solution. This is the preferred way to resolve any legal dispute, because prosecuting a lawsuit is a very expensive endeavor.

Failing a resolution out of court, a person can hire an experienced real estate attorney and file a lawsuit in the court in which the property is located. Legal actions involving real property must be brought in the state in which the land is located. This is known as the “local action doctrine”

Federal courts apply the local action doctrine as do state courts. If a lawsuit involves property located in different districts of the federal court system, a lawsuit can be brought in any of the districts in which any of the properties are located.

In most lawsuits involving real property, an award of money damages will resolve a real estate dispute. An award of money damages serves to compensate the non-liable party for its losses. Other possible kinds of remedies that might be available in real estate disputes include:

  • Injunctions: a court might issue an injunction ordering a party to cease additional construction efforts, etc.;
  • Mediation or arbitration: this involves a neutral party helping to facilitate resolution of a dispute between the parties; arbitration and mediation use different procedures, but the goal of each is the same – to get the parties to a resolution of their legal issue;
  • Various fines or fees: the imposition of fines or fees are a common remedy in cases involving violations of city or county zoning or land use violations, for example;
  • Specific performance: a court might require one party to a contract to perform their contractual obligation;
  • Various other remedies: a court might place a judicial lien on the property.

Is Dispute Resolution Available?

Prosecuting a lawsuit can be an expensive proposition, so it is preferable to resolve disputes short of litigation in courts. Of course, there are cases in which the value of the issue involved warrants a large expenditure on legal fees. However, in many cases, alternative methods of resolving a dispute might be preferable.

If a contract is involved in a real property dispute, the parties should review the contract carefully to see if it contains an arbitration provision. Today many parties to contracts include arbitration clauses in their contracts in order to avoid incurring the cost of expensive litigation in the event of a dispute.

An arbitration clause in a contract might lay out how the arbitration should proceed. But generally, in arbitration, a neutral third party is appointed to serve as a judge. The judge assumes responsibility for resolving the dispute. The arbitration judge acts like a judge in a court of law; the judge listens as each side presents its evidence and argues its case. The arbitration judge then renders a binding decision.

If there is no arbitration clause in a relevant contract that prescribes a certain procedure, the parties can negotiate how they want an arbitration to proceed. The parties can decide whether lawyers will be present and the standard of proof that will apply. Usually the decisions of arbitrators are confidential and they cannot be appealed. This means that the decision of the arbitrator is usually the final decision in the case.

Decisions of arbitrators are something like contracts that a court of law will enforce if one party fails to respect the decision of the arbitrator. Arbitration awards can be set aside by a court only in very limited circumstances. For example, if the arbitrator engaged in some kind of misconduct that affected the decision in the case, a court might set aside the arbitrator’s decision.

Another method for dispute resolution is mediation. In mediation, a neutral third-party serves as a mediator. The mediator brings the parties together to talk and present their arguments in an informal manner and setting. The mediator works to bring the parties to a compromise solution to their dispute.

The result should be written up in a settlement to which both sides agree and put their signatures. This is known as a Memorandum of Settlement (MOS). An MOS should specifically state that it is admissible in evidence in any action or legal proceeding to enforce its terms. This ensures that the MOS can be enforced by a court if any party to it decides not to respect the agreement. The MOS then becomes an enforceable contract between the parties.

If arbitration and mediation cannot bring parties to a resolution of their differences, either party is free to pursue a lawsuit in court. Remember that a lawsuit must be filed in the court of the state and judicial district where the property at issue in the lawsuit is located.

A civil lawsuit entails pre-trial procedures for the discovery of evidence by both sides. Courts today also mandate appearances of the parties at settlement conferences, where the judge and lawyers will work to settle the case. Most lawsuits are settled before trial.

If the case goes to trial, then the parties will present evidence to a judge or a jury, whichever is selected by the person who files the suit. The judge or jury decides the case and the nature of the award if it finds that an award is appropriate. The exact nature of the remedy declared by the judge or jury will depend on the nature of the case and the remedy that the plaintiff requested in their initial complaint.

For instance, in a breach of real estate contract claim, the party may need to choose between a monetary damages award or specific performance. Also, state laws might influence which types of remedies are available. This is something with which an experienced real estate lawyer can help, i.e. analyzing the facts and the applicable law and determining what type of remedy is the most appropriate to ask for in a particular case.

Do I Need a Lawyer for Help with Real Estate Disputes?

Real estate disputes might involve a number of possible legal remedies. You may need to hire an experienced property attorney if you need help with any type of real estate conflict. Your attorney can research the law in your area and can help determine your best course of action.

If a solution cannot be found through negotiation or other alternative dispute resolution process and the case has to go to court, your attorney will be able to represent you at court hearings and at trial, if necessary. You are likely to get the best outcome if you have an experienced real estate lawyer representing your interests.

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