Real estate sales are some of the most complicated transactions any person or business will make. Real estate is considered non-fungible, as no two properties are identical. This makes resolving disputes after a sale particularly complicated, since every case is unique.
If you are involved in a buyer-seller real estate dispute, it’s important to take matters seriously. That does not necessarily mean taking the case to court, however. In many situations, it’s possible to resolve buyer-seller disputes through alternative dispute resolution (ADR), such as mediation or arbitration. In California, in fact, ADR is often mandatory before a case can be taken to court. Whether you are preparing for negotiations or it’s time to take the matter to court, the professional real estate attorneys at Peterson Law, LLP, have decades of experience handling unique buyer-seller disputes in and out of the court room.
Get in touch with our San Diego buyer-seller real estate attorneys today to learn more about how we can assist you, whether through ADR or litigation.
Common Buyer-Seller Disputes
We’ve found that many buyer-seller real estate disputes result from the same handful of causes.
Financing Contingency Disputes
A financing contingency gives real estate buyers the time to secure a loan, while providing sellers with an out if the buyer is not approved. However, if a seller issues a Notice to Buyer to Perform, the buyer may dispute whether the contingency has been properly removed. Similarly, the buyer may claim that their loan fell through due to no fault of their own. These cases can lead to substantial disputes over who receives the earnest money from the transaction.
Breach of Purchase Agreement Claims
A purchase agreement is a binding contract for all parties. Whether you’re dealing with a buyer who walked away from the contract against its terms or a seller who backed out because of a better offer, a breach of purchase agreement attorney can help you establish the terms that were breached, the damages that resulted, and whether the contract’s attorney’s fees provision shifts litigation costs to the losing party.
Failed Closings
Even with a purchase agreement on the table, it’s still possible for a sale to fail to close. In those situations, sellers may have the right to keep the buyer’s deposit. On the other hand, buyers may be able to pursue “specific performance” and request that the court order the sale to proceed under Civil Code § 3387. We can help you determine the best course of action after a sale fails to close.
Peterson Law represents both buyers and sellers in real estate purchase contract disputes across San Diego and Riverside in situations like these.
Mediation, Arbitration, or Litigation
Most California buyers and sellers using a C.A.R. Residential Purchase Agreement have already agreed to a mediation clause before signing, and many have also initialed a separate arbitration provision. That means a dispute often has to go through alternative dispute resolution before it can go to court, and skipping that step can cost a party their right to recover attorney’s fees even if they ultimately prevail.
We start by identifying exactly what the contract requires: whether mediation alone applies, whether arbitration was properly initialed by both parties, and what deadlines govern the process. From there, we represent clients through mediation or arbitration in good faith. But ADR isn’t always the end of the road. We move a dispute into litigation when the other side refuses to participate in good faith, when the contract’s ADR clause doesn’t apply to the claim at issue, or when a party needs court-ordered relief, such as a lis pendens or injunction, that mediation can’t provide.
FAQ
Do I have to go through mediation before suing over a real estate contract in California?
In most cases, yes, California real estate disputes must go through mediation. This is because most California purchase agreements include a C.A.R. mediation clause. If you refuse to attend mediation and negotiate in good faith, these clauses mean you are giving up the right to recover your legal costs from the case, even if you win. You may also be required to attend arbitration, depending on the terms of your contract. An experienced California real estate lawyer can help you determine your obligations based on the contract you signed.
What happens if a real estate deal falls through?
There are many ways a real estate transaction can fall through, so there is no one set outcome. Outcomes can range from the seller retaining the buyer’s deposit as liquidated damages, to a buyer pursuing specific performance to force the sale through, to either side pursuing damages for a breach of contract claim. The stage of escrow at which the deal fell apart also affects what remedies are realistically available.