Real Estate Litigation
CPC Law has an active litigation practice and we handle a variety of lawsuits for investors, small businesses and consumers. Within our litigation practice area, we handle several kinds of matters relating to real estate.
We’ll discuss some of the most common real estate-related litigation matters our firm handles regularly. This isn’t an exhaustive list of how real property disputes can find you in court, but many of our cases fall into one of these categories of real estate litigation.
Quiet Title Actions
Quiet title lawsuits are filed under several scenarios. By far, the most common quiet title action we file is for a real estate investor acquiring title through a tax deed auction.
The title problem is effectively a real estate marketability issue. The title insurance industry, takes the position that tax deed title is risky. A tax deed investor may find a cash buyer willing to take the property without the assurance of a warranty deed and owner’s policy of title insurance, but that’s unlikely.
If the investor who buys a property through the tax sale wants to resell it to a buyer of a using bank mortgage financing, that lender will want its own title insurance coverage. This means the property is not marketable, unless the owner holds it for at least four years, which is the title insurance industry norm for considering that the coast is clear.
The main reason for the nervousness is that the legal process leading to the tax deed sale could be defective. All parties with an interest in the tax-delinquent property, including title owners, mortgage lenders and lien-holders found in the public record are entitled to notice and an opportunity to pay the tax bill or raise challenges prior to the tax sale. If the clerk of court makes mistakes and fails to notify interested parties, that could poison the underlying legal process and create a title problem.
The solution is generally found when the new owner files a quiet title action. This is a legal action against all other parties who may have a valid claim on the title based on information found in the public records. These potential claim-holders are named in the suit, served legal papers and given an opportunity to respond. In the tax deed world, most quiet title actions are won on default because the court system usually gets it right by giving notice to all the proper parties leading up to the tax deed sale and nobody has a defense to raise.
As an alternative to filing a quiet title suit, some investors pursue an alternate solution. There are some specialized title insurance underwriters who will, for a higher premium than a usual title policy, take on the risk and insure the title of a tax deed property. Many real estate attorneys would prefer that investors not know about this option. In many cases, the cost of the premium will be less than the legal fees and court costs associated with the quiet title suit.
In any given situation, there may be valid considerations aside from costs. The smart investor should get the advice of counsel, do a cost-benefit analysis and determine which option is right. The answer may be to hold the property for an extended period to remove the title issue, file the quiet title suit or buy the special title insurance policy. The main thing is to make a knowing and informed business decision that’s right for the investor in their situation.
Any title-owner of a residential, commercial, industrial or agricultural property is a potential candidate for an eminent domain action. Eminent domain is the legal process by which a government agency can actually force the transfer of title of real property in exchange for fair market value. The case may be brought by the state, county turnpike authority or other agencies needing property for public works projects, usually roads.
Most eminent domain actions don’t involve a serious dispute over whether the government can take title, but rather, how much it should pay the owner in this forced transfer. Accordingly, eminent domain lawsuits often amount to a battle of real estate appraisers contributing to the case as expert witnesses on the issue of value.
Fortunately for property-owners, there are very strong legal protections in place. It makes sense that such protections exist. From the inception of our nation and throughout the history of the United States, property rights have been considered supremely important. It follows that the Florida eminent domain laws give significant benefits and protections to the title owners the state sues to take their property.
The right to have the government pay the property owner’s attorney’s fees and court costs to be the greatest legal benefit. CPC Law helps clients negotiate and fight for the highest property value without requesting any advance legal fees. Most experts and other service providers, such as appraisers, will likewise wait until the end of the case to get paid because reasonable fees are guaranteed to be paid by the government.
Another benefit is, if you decide to take the case to trial in Florida, you’re entitled to a 12-person jury to decide the case. it’s important for property owners to get sound legal advice before entering into any discussions or negotiations with the government and certainly before trying to finalize a price.
Real Estate Contract Disputes
Every real estate deal should start with a contract. In Florida, a real estate contract needs to be in writing to be enforceable. Quite often, contract disputes arise between buyers and sellers and attorneys are brought in to help resolve, or litigate those disputes.
Many real estate contract disputes involve a fight over purchase deposit money. If a buyer breaches the contract and fails to close, the seller will seek to keep the “earnest money deposit” as damages. Most of these matters will result in the buyer and seller pointing fingers at each other regarding the issue of who actually breached the contract. Whichever side of the deal you’re on, it’s important to carefully write the contracts to protect you as much as possible from things that can go wrong.
For example, if you’re relying on mortgage lender financing to buy the property, you’ll want a “financing contingency” clause in the contract. This is language that will allow you to get out of the deal and reclaim your deposit if you fail to close for failure to qualify for the mortgage.
To understand real estate contract disputes generally, it’s helpful to master the basic points of contract law. In simple terms, here are the required elements of a legally enforceable contract. It starts with an offer. An offer is a proposal or request to another to do something. The offer carries an expectation of something in return. This can be an acceptance, counter-offer or a promise to do something in return for the offer.
For a contract to be enforceable, there has to be acceptance of the terms proposed in the offer. Someone may accept the original offer or make a counter-offer and have that accepted. Whether there’s acceptance comes down to the issue of whether there is a meeting of the minds. The acceptance should be clear and without any doubt.
The next essential element of a contract is consideration. This means something of value, or a benefit, needs to be given back in return for the other side’s promise. If there’s no consideration in the deal, it’s unenforceable.
For example, in real estate investing, options to purchase properties are very common. This is an agreement where a potential buyer buys an option, which is the right to buy the property from the owner at a set price within a certain period of time, often considered a right of first refusal. If the buyer, known as the “optionee,” fails to pay consideration for that right to buy, the promise to sell from the “optionor” can’t be enforced.
In real estate transactions, there are contractual requirements that may not apply in other types of deals. Florida law describes “essential terms” that must be included in a valid contract to sell real property.
The first essential term is that the contract must be in writing. In general, many types of verbal agreements can be fully enforceable in the legal system. There are specific kinds of contracts that need to be in writing, including real estate agreements. The “Statute of Frauds” addresses this issue and states that agreements to purchase and sell real estate must be in writing, in addition to other requirements discussed in this article. Additional essential terms for a Florida real estate contract require the property to be specifically described. The financing terms are also considered essential and must be clearly described to make the contract enforceable. If you find yourself in a situation where you may be sued or need to sue someone in a real estate matter, call CPC Law to schedule your attorney consultation.
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