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Common Real Estate Disputes

By Nicole Hauptman

Tell us a little bit about your experience, your firm's history and the services you offer related to real estate.

As a firm, we offer a variety of real estate services, including: review of property sales agreements, representation for property line disputes (including easements and right of ways), review and drafting of leases, preparation and filing of deeds, eminent domain cases, assessment appeals, and other litigation relating to real estate.

Flaherty Fardo was founded in 1997. We have successfully represented thousands of clients across Allegheny County and the state of Pennsylvania. In the area of property assessment appeals alone, we have saved our clients tens of millions of dollars.

What are the most common real estate disputes that you handle regarding the purchase and sale of homes in Western Pennsylvania?

We deal with a variety of issues for both buyers and sellers of homes. Buyers sometimes discover issues with the property after moving in that were not listed on the seller disclosure statement or otherwise known at the time of purchase, often called a "nondisclosure case". Additionally, many issues can arise with the hand money exchanged between a potential buyer and seller, especially if a deal falls apart before closing. Finally, many buyers of properties, both commercial and residential, are faced with an assessment appeal following their purchase.

Can you briefly describe what a nondisclosure case is?

Nondisclosure cases occur when questions arise after a real estate purchase, specifically in regards to the information listed on a seller's disclosure statement. A seller of real estate is required to accurately complete a seller's disclosure document prior to the selling of their property. They are required to list any known material defects in the property. Following the transfer of the property, if a buyer encounters a problem with the property that was not listed in the disclosure statement, they may have legal recourse against the sellers. In order to succeed in this type of case, the buyer typically must prove that the seller willfully and/or negligently failed to comply with disclosure law. Nondisclosure cases have a two-year statute of limitations.

How does an attorney help homebuyers when the seller failed to disclose a defect in the house or property that was sold?

Nondisclosure cases must be reviewed individually, to determine if litigation would be cost effective. It is always most important that the buyer thoroughly review the disclosure statement provided by the seller, and ensure that the appropriate inspections are thoroughly conducted at the property. Hiring inspectors for a real estate purchase is not the time to try to save money. Competent inspections can often help buyers avoid a nondisclosure situation at a later time.

If a significant and expensive defect is discovered after purchase, estimates for the work required must be obtained to determine the extent of the issue. These estimates can also be helpful in determining if the previous owners attempted to conceal this problem in any way, and if the problem would have been visible for an extended period of time. All of this documentation can be very important if litigation is necessary.

Unfortunately, litigation relating to nondisclosure is typically only warranted if the defect in the property is substantial and expensive, and if some type of concealment or knowledge about this problem on behalf of the seller can be proven. These cases can sometimes boil down to a "he said, she said" scenario, and these types of cases are very risky. As stated before, spending the time and money on the appropriate inspections prior to closing is strongly suggested. If problems can be dealt with prior to the transfer, this can often remove the necessity and expense of litigation later.

Are there circumstances when a buyer can back out of the sale of residential property?

Typically the language of the sales agreement would allow the buyers to back out of a real estate transaction for a variety of reasons. The most common reason that buyers have for backing out of a sale is when an inspection uncovers problems with the property. If the problem cannot be easily fixed, or if the seller is not willing to pay the repairs costs, buyers can typically back out of the purchase.

Are there circumstances when a seller can back out of the sale of residential property?

The laws controlling real estate transfers are friendlier for the homebuyer, not the home seller. Once an offer has been made by the buyer and formally accepted by the seller, a binding legal contract has been formed. If the seller gets cold feet, they will likely be able to eventually get out of having to sell the property, but this likely will come at a cost.

If the seller attempts to back out, the buyer has a few options about how to proceed. They can voluntarily back out of the deal. Alternatively, they can seek legal remedy against the seller. The buyer has the option of suing the seller for "specific performance" under the contract, which would essentially require the sellers to proceed with the sale of the house. This is an extreme remedy, which is not often granted by the courts. The seller can also sue for damages, including any costs incurred for realtor commissions, hand money, inspection costs, etc. The court is much more likely to grant these types of damages.

Ultimately, it is much more difficult for a seller to back out of the sale of their property after the agreement has been made between the parties. For this reason, a seller should not sign the sales agreement accepting the offer made by the buyers until they are sure they wish to proceed with the sale.

What would you recommend that a homebuyer should do before hiring a lawyer to help settle a real estate dispute?

It is important that a homebuyer makes an informed decision when hiring an attorney for any kind real estate dispute. This can include researching the law firm, reading what past clients have stated about the lawyer and the services they provide, and speaking with the lawyer about their specific situation. Feeling comfortable and confident with the attorney you select is the first step towards successful representation.

What impact will the sale of a property have on the property taxes owed?

Every County in Pennsylvania has a different assessment appeals process. Any interested party (property owner and each respective taxing entity) is permitted to file an assessment appeal every tax year. Some counties (Allegheny County for example) have thousands of assessment appeals every single tax year, while other counties have significantly less appeals.

The transfer of a property can often trigger an assessment appeal. New homeowners should familiarize themselves with the property assessment process in their respective County, because an assessment appeal can substantially impact the taxes owed, and therefore increase monthly mortgage payments if taxes are escrowed.

In Allegheny County specifically, thousands of assessment appeals are filed every year. Allegheny County underwent a County-wide reassessment in 2012, and the current base year for assessment purposes is January 1, 2012. For this reason, if a house is purchased within the County for substantially more than the current assessment value, an appeal is likely.

What's the best way for people to reach you and your firm?

We are available for free consultations by phone at (412) 802-6666, by email at info@pghfirm.com, or through our website at http://www.pghfirm.com

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About The Author

Ms. Hauptman's practice is focused in real estate, business and injury litigation. She...

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