Does Your Attorney Know What You Are Asking For?

Real estate litigation attorneys have a wide variety of remedies to choose from in most real estate lawsuits.  Not every attorney is alike and there are specific remedies in real estate disputes that are not available in many other types of lawsuits.  While most business lawsuits end up in awards of money, real estate lawsuits can also involve transfers of property or other resolutions.  Here are some of the potential remedies available in real estate litigation in Los Angeles.

Specific Performance:  This is perhaps the most well known of the potential real estate lawsuit remedies.  Because specific performance is often used in real estate litigation but not in other types of litigation, business litigation attorneys who are unfamiliar with real estate lawsuits may not be aware of how specific performance works.  Specific performance arises in conjunction with a breach of contract.  The damages in most breach of contract actions will involve a monetary award which puts the complaining party in the position he or she would have been had the contract been performed.  However, a court will rarely compel someone to perform on the contract.

Specific performance, however, is often used in California real estate litigation because California law considers real estate, especially residential real estate, to be unique.  The court is therefore willing to enforce the contract (assuming all of the elements of the specific performance cause of action are met).  A real estate litigation attorney will generally allege both breach of contract and specific performance in the lawsuit.

Breach of Contract:  The breach of contract cause of action is a staple of most business litigation and its elements and requirements are no different in real estate litigation.  In real estate lawsuits, the attorney will seek all of the damages proximately caused by the breach of contract.

Liquidated Damages:  The attorney must however review the contract since many real estate contracts, including the California Association of Realtors (CAR) standard form purchase agreement used to buy homes, includes a liquidated damages clause.  A liquidated damages clause states that the parties recognize that establishing damages in a breach of contract lawsuit relating to the purchase of the property would be extremely difficult and so the parties agree in advance to a certain sum of damages (the liquidated sum).  In most property purchases this liquidated sum is the amount of the deposit.  In other words the damages available in a lawsuit will be the amount of the deposit made by the buyer.

Attorneys Fees:  The recoverability of lawyers’ fees in real estate litigation can drastically alter your attorneys’ cost/benefit analysis of the litigation.  If attorneys’ fees are not recoverable by the prevailing party, the cost of the litigation may make the litigation uneconomic.  On the other hand the potential to recover attorneys’ fees may make a smaller case more feasible to pursue.

Rescission:  In some limited instances, your real estate litigation attorney may suggest rescission of the contract.  Rescission extinguishes the contract and restores the parties to their original positions, including returning any money paid.  It is as if the contract never existed.

Reformation:  Reformation is used by real estate litigation attorneys to correct errors in contracts so that they accurately reflect the intent of the parties.  Reformation can be based on fraud or mistake.

Real estate litigation involves not only marshalling the facts but also applying the specific real estate laws that pertain to the situation.  An experienced real estate litigation attorney can often spot the appropriate remedies.  There are also numerous statutes which apply to real estate transactions (and real estate brokers) which may affect your case.  The most important first step in any real estate litigation is to figure out where you want to end up, and that involves ascertaining your best remedies.

 Los Angeles real estate litigation attorney Laine T. Wagenseller specializes in real estate and partnership litigation.  He is the founder of Wagenseller Law Firm in downtown Los Angeles.  For more articles on real estate litigation issues, please visit www.wagensellerlaw.com.  You can contact Mr. Wagenseller at ltw@wagensellerlaw.com or (213) 286-0371.