Legal Disclaimer: This article provides general information for educational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change frequently. For advice specific to your situation, consult a licensed attorney in your area.
Real estate transactions involve large sums of money and complex processes, making disputes common and consequential. The Consumer Financial Protection Bureau (CFPB) provides resources for homebuyers and homeowners facing disputes. Whether you're fighting over disclosure failures, earnest money, or agent misconduct, understanding your rights protects your investment.
Disclosure Laws: Most states require sellers to disclose known material defects. Failure to disclose can be grounds for rescission or damages even after closing.
Common Real Estate Disputes
Buyer Issues
- Undisclosed defects discovered after purchase
- Seller misrepresentation
- Title problems
- Agent conflicts of interest
- Financing falls through
- Inspection issues
Seller Issues
- Buyer backs out
- Earnest money disputes
- Lowball offers after inspection
- Agent not acting in seller's interest
- Delays in closing
Agent/Broker Issues
- Breach of fiduciary duty
- Commission disputes
- Failure to disclose material facts
- Dual agency conflicts
- Negligent advice
Disclosure Failures
What Must Be Disclosed
- Known material defects
- Water/flood damage history
- Foundation issues
- Roof problems
- Pest infestations
- Deaths on property (some states)
- Neighborhood issues (some states)
Proving Non-Disclosure
- Seller knew of the problem
- Problem existed before sale
- Seller failed to disclose
- You wouldn't have bought or would have paid less
- You suffered damages
Remedies for Non-Disclosure
- Rescission (undo the sale)
- Damages (cost to repair)
- Diminished value
- Punitive damages (fraud)
Time Limits: Disclosure claims have statutes of limitations - often 2-4 years from discovery. Don't wait to take action if you discover undisclosed defects.
Earnest Money Disputes
When Buyer Can Get It Back
- Contract contingencies not met
- Financing denied
- Inspection reveals major issues
- Seller can't deliver clear title
- Appraisal too low
- Seller breach of contract
When Seller Keeps It
- Buyer backs out without valid reason
- Buyer fails to perform
- Contingencies were satisfied or waived
- Contract terms specify forfeiture
Resolving Disputes
- Review contract terms carefully
- Determine if contingency applies
- Submit release request to escrow
- Negotiate with other party
- Mediation if required by contract
- Legal action if unresolved
Agent Misconduct
Agent Obligations
- Fiduciary duty to client
- Disclose material facts
- Act in client's best interest
- Maintain confidentiality
- Account for money and property
- Exercise reasonable skill
Common Violations
- Dual agency without consent
- Failing to present all offers
- Misrepresenting property condition
- Steering to preferred lenders
- Hidden kickbacks or referral fees
Filing Complaints
- State real estate commission
- Local real estate board
- Broker's supervising office
- Civil lawsuit for damages
Dual Agency: When one agent represents both buyer and seller, conflicts are inherent. Dual agency must be disclosed and consented to - you can refuse and request separate representation.
Title Issues
Common Problems
- Liens not cleared
- Boundary disputes
- Easement issues
- Errors in deed
- Forgery or fraud
- Missing heirs
Title Insurance
- Protects against covered defects
- File claim with title company
- Review policy for coverage
- May pay for legal defense
Boundary Disputes
- Get professional survey
- Review deed and plat
- Negotiate with neighbor
- May need quiet title action
Contract Disputes
Common Issues
- Closing date disagreements
- Repair negotiations
- Contingency interpretation
- Included items disputes
- Walk-through problems
Reading Your Contract
- Know all contingencies
- Understand deadlines
- Review default provisions
- Check dispute resolution clause
- Understand earnest money terms
Breach of Contract
- Document the breach
- Provide written notice
- Allow cure period if required
- Preserve your remedies
- Consider specific performance
Specific Performance: In real estate, you may be able to force the sale to complete rather than just getting money damages. Courts recognize that each property is unique.
Taking Legal Action
Before Suing
- Review contract's dispute resolution
- Send demand letter
- Attempt negotiation
- Consider mediation
- Document all damages
Legal Options
- Small claims (within limits)
- Civil court for larger amounts
- Arbitration if required
- Real estate commission complaint
Calculating Damages
- Repair costs
- Diminished property value
- Lost earnest money
- Additional costs incurred
- Attorney fees (if contract provides)
Prevention Tips
Before Buying
- Get thorough inspection
- Research property history
- Review all disclosures carefully
- Use experienced agent
- Get title insurance
Before Selling
- Disclose everything known
- Get pre-sale inspection
- Fix known problems or price accordingly
- Keep documentation
Resolve Your Real Estate Dispute
Generate a demand letter for real estate transactions, disclosure issues, or agent disputes.
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