What are Common Triggers for Commercial Real Estate Litigation?
Commercial real estate litigation typically stems from predictable patterns involving complex property relationships and contractual obligations. According to McCaslin Law, PC, the most frequent triggers include:
- Lease Disputes: This is the most common trigger for litigation. Key issues often involve rent defaults, where a tenant stops making payments, and valuation disagreements regarding rent escalations, renewal options, or common area maintenance charges.
- Title, Boundary, and Easement Conflicts: These disputes involve legal ownership rights or the rights attached to that ownership. Common examples include easement conflicts over the use of driveways or access roads, boundary inaccuracies discovered via surveys, and clouds on a property’s title that require a quiet title action to resolve.
- Construction Defects: Litigation frequently arises when completed work fails to meet industry standards or contractual specifications. This includes structural deficiencies, substandard materials, or professional negligence by architects and engineers. Additionally, delays that lead to lost revenue (delay damages) are a major source of conflict.
- Purchase and Sale Agreement Issues: Disputes often emerge during the transaction phase, involving concerns related to financing, property inspections, or closing terms.
- Partnership and Commission Disagreements: Real estate projects can trigger litigation through partnership dissolutions, profit allocation disagreements, or broker commission conflicts where payment entitlement is challenged.
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