In any transfer of real estate, buyers and sellers alike have an interest in the transaction closing as quickly and smoothly as possible. However, obstacles are often lying in wait, and they can not only frustrate the parties’ objectives but also result in litigation. Disputes that commonly arise involve contractual issues, disclosures, title problems and third-party interference.

Real estate contracts are often sources of disagreements. Parties might contest the meaning of standard contract clauses and of any riders added by either party’s attorney. In addition, a typical contract provides for various contingencies. There is usually a clause that allows the buyer the opportunity to inspect the premises within a set number of days and to back out of the deal if the condition of the property is defective and the seller refuses adequate remediation. Also, contracts often contain a mortgage contingency clause, specifying the amount of financing the buyer needs to obtain for the sale to go through. These contingencies can be causes of major delays and sometimes can cause disputes and even derail the deal.

Issues often arise over sellers’ disclosures. In California, residential real estate sellers have a duty to disclose known defects on the property. Sometimes, the buyers’ home inspection does not reveal undisclosed defects. Many repairs such as leaking roofs and structural problems are extremely expensive. Buyers who unwittingly purchase homes with defects may have no other remedy than to sue the seller. Plus, if the new buyer wants to resell the property, defects on the property could mean getting a substantially lower price.

Another common problem in real estate transactions concerns title to the property. Sometimes there is an error in the chain of title that puts the current ownership of the property into question. There also may be an easement or boundary encroachment that affects the property rights being conveyed. Unreleased liens or mortgages can also delay the transaction. Some lenders fail to send a proper release once a mortgage is paid off and some homeowners do not record the written releases.

Disputes involving third party issues can jeopardize a purchase and sale. A relative or business associate of the seller might make an ownership claim on the property. If there is a tenant, the property is transferred subject to their continuing rights unless there are agreed upon terms for ending the tenancy. An experienced real estate attorney knows how to anticipate and seek resolutions of these issues in advance to as not to substantially delay the closing.

Favaro, Lavezzo, Gill, Caretti & Heppell, PC, with offices in Fairfield and Vallejo, California, is a general practice firm serving the North Bay area, with a strong concentration in real estate transactions. Contact us online or call 707-674-6057 for a free initial consultation.