8 reasons for commercial real estate litigation

On Behalf of | Jan 9, 2024 | Firm News |

Nearly any real estate transaction has the potential to be complicated, but this is particularly true in commercial real estate, where millions of dollars are on the line. The plaintiffs can be owners, corporations, tenants, contractors, developers, or neighbors.

The list

While two residential neighbors may be able to negotiate an equitable settlement among themselves or using a mediator, the complexity of commercial real estate and the sums involved often means that opposing legal teams and a judge strive to find a solution.

  1. Breach of contract: No real estate project or transaction gets far without a legal contract, which outlines the work, price, time frame and other expectations. It also should outline what happens when disputes arise, which triggers a breach of contract claim.
  2. Fraud: Not all potential business partners, buyers and sellers are reputable. The seller may claim that the foundation is solid or the property does not flood, but buyers may later find out that they were knowingly misled. It could also be a matter where the seller does not have complete or even partial legal ownership of the property
  3. Partnership disputes: Commercial real estate is often owned by a group or more than one business. Disagreements arise over maintenance, changes to the property, rent rates, the decision to sell, or other matters.
  4. Liens: While disputes over work done or not done are a potential breach, contractors, builders, or construction firms may do the work and then not get paid, which can prompt them to put a mechanic’s lien on the property. Owners cannot sell a property without resolving or paying the lien.
  5. Construction defects: The building owner or builder may find that materials did not last or function as promised by the manufacturer.
  6. Landlord-tenant disputes: Disputes often arise from non-payment of rent, lease violations, evictions, or disputes over deposits.
  7. Title issues: Title issues occur when there are problems with the ownership or transfer of property titles. Common examples include fraud, forgery, errors in public records, undisclosed liens or easements, or conflicting claims to ownership.
  8. Zoning or land disputes: This can involve disputes with neighbors or local government over property lines, compliance with applicable regulations or seeking a variance.

The details of each dispute are different, but in highlighting these examples, we hope to educate readers trying to determine if they or the plaintiff has grounds for a claim.