Antonoplos & Associates Attorneys at Law group of recreational property dispute attorneys have over 20 years of experience working with local and international entities during the purchase, sale, and litigation regarding recreational properties.

The lawyers at Antonoplos & Associates Attorneys at Law can provide efficient and result-oriented solutions with respect to resolving the unique issues arising from recreational property disputes. Below are some of the most common reasons why litigation occurs relating to recreational properties.

Failure to Close Sale, Refusal to Sell, Refusal to Close Pre Construction Sale or Failure to Close Pre Construction Sale

One of the most common causes of recreational property disputes is when the sale or purchase of a property cannot be completed by either the buyer or seller. The most common reason why a purchase falls through is that the buyer was unable to receive sufficient funds by the closing date. A lack of financing can occur because the buyer of the property cannot obtain mortgage financing, has not terminated performance obligations within the timeframe permitted in the agreement of the purchase, or because the buyer did not receive their receipt of purchase from the sale of their previous home or other property before the closing date.

In most situations, if the buyer is not able, willing, or ready to complete the sale by the agreed-upon closing date yet the seller is ready to execute the sale, the buyer will forfeit any previous deposits. Furthermore, the seller of the property can pursue an additional financial remedy if they sustain any loss in property value, carrying costs, closing costs, and legal fees because the buyer did not close on the sale. One exception to this is that if real estate agents are holding deposits, they can only release these funds if both parties consent to this release. If both parties do not agree to release the funds, the seller must obtain a court order forcing the real estate agent to release the fund. 

Sellers Failure to Close

Below are some of the most common reasons why a seller may not be able to close on the sale of a property:

  • The seller could not complete or hire someone to complete previously agreed pre-closing repairs
  • There are previously undisclosed mortgages, interests, liens, or charges that prevented the sellers from providing a clean title

In addition to the reasoning above, a seller may not be able to close on the property because they cannot provide a clear title with the closing funds. Additionally, the seller’s real estate attorney must ensure that all interest holders are paid from the closing costs before the remaining balance is transferred back to the seller. Thus, if the charges on this account exceed the purchase price of the property or if one of the charge holders refuses to consent to payment out of the sale of the property, the seller cannot give the buyer a clear title.

If this issue or any of the problems listed above occur, the property buyer can claim damages from any financial losses they experience from not being able to purchase the property. If the buyer’s financial losses cannot be fixed with a simple transfer of money, the buyer may have their attorney seek specific performance. Specific performance allows the court to force the seller to close on the property so that the buyer can begin using the property. This would most commonly occur if the buyer already sold their home or was planning on using the property for commercial use. Furthermore, if a buyer seeks specific performance, they may also look to receive injunctive relief from the court to ensure that the seller does not sell the property to anyone else.

Issues Relating to Hidden Defects or Latent Defects

In most cases, a real property purchaser has the right to inspect the property. However, these inspections are not comprehensive. Thus, the initial home inspection may not reveal issues with the property if they are not readily visible. These are called latent defects and are defects to real property that are not easily discovered by a contract purchaser in the course of a home inspection or property walk through inspection. Latent defects often include things like, plumbing problems, flood damage, faulty electrical wiring, or structural problem but can also include problems with the roof or HVAC or other systems of the real property. In certain cases, these issues may not even become visible for a number of years after purchasing the property.

A seller will typically make representations, warranties, or claims that the property does not contain these defects. However, the buyer—if they find these defects after purchasing the property—can claim that the seller knew about these defects or should have reasonably known about them. If the buyer can convince the courts that this is the case, the buyer can seek monetary compensation in order to fix the issue and any subsequent issues.

Misrepresentations as to Profitability

One of the most common causes of recreational property litigation is when a seller of a property misrepresents the profitability of the property. For example, if someone purchases a property with the intention of making a profit, they may likely rely upon the information provided by the vendor, developer, or promoter as to the profitability of the property or its value. This information will typically include things like an average car or foot traffic past the location or additional development set to take place in the area. In cases where this information was misrepresented, greater investment loss is likely to occur. In cases where a buyer was told false information and relied on this information to create a profitable business, the buyer may obtain a court order requiring the seller of the property to pay back the damages the buyer incurred from purchasing the property.

Rent to Own Agreements

With District of Columbia housing prices constantly rising, a rent-to-own contract option has become increasingly attractive to potential buyers. This type of contract allows renters to invest in the future ownership of the property by using rental payments to pay down the total purchase price or closing cost of the property. In this case, the landlord and seller of the property will agree on a set purchase price if the renter opts to buy the property. In most cases, a rent-to-own contract allows the landlord to collect higher than the average rent for the property because of the benefits this agreement offers renters.

Recreational property disputes relating to rent-to-own agreements occur when the tenant exercises the option to purchase the property when the property value has risen significantly or if the option to purchase agreement has not been followed exactly. If this occurs—whether you are the buyer or seller of a property—it is important to receive legal advice immediately. For tenants specifically, legal assistance is important to ensure that the option to purchase is followed or, if necessary, to seek injunctive relief to purchase the property. For property owners, consulting a lawyer can assist them in deciding if the tenant met the option to purchase agreement, assist in maintaining ownership, and commence the eviction process if necessary.

Short-Term Rentals and Co-Sharing Agreements

With recreational property only being in use for a few months out of the year, it is common for two parties to purchase the property together. Co-purchasing a property can be a great idea as it allows each party to gain access to a nearby lake, beach, or resort. This agreement is even more useful if both parties would be using the property at different times of the year. However, because the parties that co-purchase a property are normally friends before the purchase, this arrangement typically does not involve a formal contract.

Litigation from a co-purchase arrangement typically occurs when one party disputes the other party’s right to the recreational property. Furthermore, a legal dispute could occur if one party does not pay their portion of the taxes, utilities, or mortgage payment. In certain cases, the parties that co-own the property will even rent out the recreational property over the course of the year. This issue can bring about legal conflict if the parties cannot agree on a profit-sharing arrangement. Legal advice during co-ownership of recreational property litigation could include injunctive relief to freeze profits until a court can determine the proper profit-sharing arrangement. Additionally, if the situation becomes so bad, a real estate attorney could also draft and mediate a departure agreement of one party so that they can sell their portion of the property.

Right of Way and Easements

Typically, you can access many residential properties through public roads that meet with the border of the private property. However, you can only reach some recreational properties by access roads. For example, on certain recreational properties, the road going to your specific property could be a private road that crosses over the property of another citizens or businesses. In this case, the party that owns the land and road may try to deny you access. Thus, it could be extremely difficult for your property which limits your ability to utilize your property to its full potential.

Misrepresentations of Property and Shoreline Access

Before purchasing a recreational property, it is important to obtain a survey of the property so that you know exactly what you are buying and what areas nearby your home you have access too. In most cases, a survey will demonstrate boundaries, road access, right of way, easements, unopened road allowance, and shoreline ownership.

Recreational property disputes regarding these surveys commonly arise when the land surveyed was misrepresented by real estate agents, venders, or solicitors relating to the common uses of the survey as listed above. If this occurs and you choose to seek legal advice, your real estate attorney will likely rescind your purchase offer or seek monetary damages equal to or greater than the reduced property value from the misrepresentations.