Real Estate Litigation

Most Common Causes of Residential Real Estate Litigation

South Carolina’s real estate market presents unique opportunities and challenges for buyers, sellers, and real estate professionals. While real estate transactions are often exciting, they can also be fraught with legal complexities. Understanding the most common causes of litigation in this area is crucial for protecting your interests and ensuring a smooth and successful transaction.

Breach of Contract: The Root Cause of Most Real Estate Disputes

At the heart of most real estate transactions lies a contract, a legally binding agreement that outlines the rights and obligations of all parties involved. This document, whether it’s a purchase agreement, lease, or option contract, serves as the foundation for the entire transaction. When one party fails to uphold their end of the bargain, it is known as a breach of contract, and it can have serious legal consequences.

In South Carolina, some common examples of breach of contract in real estate include:

  • A buyer failing to secure financing by the agreed-upon deadline.
  • A seller refusing to make repairs or improvements that were included in the contract.
  • Either party delaying the closing date without a valid reason or mutual agreement.
  • A buyer or seller backing out of the deal without legal justification.

When a breach of contract occurs, the non-breaching party has several legal options to pursue. These may include:

  • Specific performance: This is a court order that requires the breaching party to follow through with their contractual obligations. For example, if a seller refuses to sell the property after signing a purchase agreement, the buyer may seek specific performance to force the sale.
  • Compensatory damages: If the breach of contract results in financial losses for the non-breaching party, they may be entitled to monetary compensation. This could include things like lost profits, additional expenses incurred, or the difference between the contract price and the property’s fair market value.
  • Termination of the contract: In some cases, the non-breaching party may choose to walk away from the deal entirely. This is known as contract termination, and it releases both parties from their obligations under the agreement.

To minimize the risk of breach of contract disputes, it is essential for all parties involved in a real estate transaction to:

  • Carefully review and understand the terms of the contract before signing.
  • Communicate openly and honestly with each other throughout the process.
  • Seek legal guidance from a qualified real estate attorney when drafting, reviewing, or negotiating contracts.
  • Keep detailed records of all communications and transactions related to the property.

The Seller’s Duty to Disclose: Hidden Defects and Material Facts

Sellers of real estate have a legal obligation to disclose any known defects or issues with the property that could affect its value, safety, or desirability. This duty to disclose is outlined in the South Carolina Residential Property Condition Disclosure Act, which requires sellers to provide potential buyers with a written disclosure statement detailing the property’s condition.

Some common issues that sellers must disclose include:

  • Water damage or leaks, whether from plumbing issues, roof problems, or flooding.
  • Structural defects, such as foundation cracks, settling, or poor construction.
  • Pest infestations, including termites, carpenter ants, or rodents.
  • Malfunctioning systems, like faulty wiring, leaky pipes, or inefficient HVAC units.
  • The presence of hazardous materials, such as lead-based paint, asbestos, or radon gas.

In addition to these specific defects, sellers must also disclose any “material facts” about the property. These are details that may not be obvious during a typical home inspection but could still influence a buyer’s decision to purchase the property. Examples of material facts include:

  • Neighborhood nuisances or disputes, such as noisy neighbors, barking dogs, or ongoing legal battles.
  • The property’s history, including past damage, repairs, or insurance claims.
  • Stigmatized properties, such as those that have been the site of a crime or alleged paranormal activity.

Failing to disclose known defects or material facts can have serious consequences for sellers. If a buyer discovers an undisclosed issue after closing, they may take legal action against the seller for misrepresentation, fraud, or breach of contract. In these cases, the seller may be liable for damages, including the cost of repairs, the difference in the property’s value, or even the rescission of the sale.

Boundary Disputes: When Fences Make Bad Neighbors

Good fences may make good neighbors, but when those fences are in the wrong place, they can lead to bitter boundary disputes. In South Carolina, disagreements over property lines are a common source of real estate litigation. These conflicts can arise for a variety of reasons, including:

  • Encroachments: This occurs when a neighbor’s structure, such as a fence, shed, or even a portion of their home, extends onto your property without permission. Encroachments can be intentional or accidental, but they can still cause significant legal headaches for property owners.
  • Easement disputes: An easement is a legal right to use another person’s property for a specific purpose, such as accessing a shared driveway or running utility lines. When the terms of an easement are unclear or violated, it can lead to conflicts between neighbors.
  • Conflicting surveys: Over time, property lines can become blurred or confused, especially if the land has been subdivided or transferred multiple times. When two surveys show different boundary lines, it can be challenging to determine which one is correct.
  • Adverse possession: In South Carolina, a person can claim ownership of someone else’s land if they have used it openly and continuously for a certain period (usually 10 years). This legal concept, known as adverse possession, can be a contentious issue when a neighbor tries to claim a portion of your property as their own.

To resolve boundary disputes, property owners in South Carolina have several options:

  • Hire a licensed surveyor to conduct a new survey and establish clear property lines.
  • Engage in mediation or negotiation with the neighboring property owner to reach a mutually agreeable solution.
  • File a quiet title action in court, which is a legal proceeding to determine the rightful owner of the disputed land.
  • Seek a court order for the removal of encroaching structures or the enforcement of easement rights.

Title Issues: Clouds on Your Real Estate Horizon

A clear and marketable title is essential for any successful real estate transaction. The title is the legal record of ownership, and it documents the property’s history, including past sales, transfers, and encumbrances. When there are issues with the title, it can create significant obstacles for buyers and sellers alike.

Some common title issues that can lead to real estate litigation in South Carolina include:

  • Undiscovered liens: A lien is a legal claim against a property for unpaid debts, such as taxes, mortgages, or contractor fees. If a lien is not discovered during the title search process, it can surface after the sale and create problems for the new owner.
  • Ownership disputes: In some cases, there may be multiple parties claiming ownership of the same property. This can happen when there are errors in the chain of title, such as a missing deed or an improperly executed transfer.
  • Fraudulent or forged documents: Unfortunately, real estate fraud is not uncommon. If a deed or other title document is found to be forged or fraudulently obtained, it can cast doubt on the property’s true ownership and lead to legal battles.
  • Undisclosed easements or restrictions: If an easement or restrictive covenant is not properly recorded or disclosed, it can come as an unpleasant surprise to the new owner and limit their use and enjoyment of the property.

To protect against title issues, most real estate transactions involve a thorough title search and the purchase of title insurance. A title search is a review of public records to ensure that the seller has a clear and marketable title to the property. Title insurance provides financial protection for buyers and lenders in case any undiscovered title defects or claims arise after the sale.

However, even with these precautions, title disputes can still occur. In these cases, the parties involved may need to take legal action to resolve the issue and establish clear ownership of the property. One common legal remedy is a quiet title action, which is a lawsuit filed to “quiet” any competing claims to the property and establish the rightful owner.

Johannesmeyer & Sawyer: Here to Help with Your Residential Real Estate Issues in SC

If you find yourself facing a residential real estate dispute in South Carolina, the experienced attorneys at Johannesmeyer & Sawyer, PLLC are here to help. Our team has the knowledge and experience to guide you through the legal process, protect your rights, and advocate for your best interests. Call us today at (803) 396-3800 or contact us online to schedule a consultation with a member of our legal team.

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