Common Issues that Lead to Litigation in Real Estate Transactions

Buying or selling real estate—whether residential, commercial, or land—is one of the most significant financial transactions most people will ever make. With so much at stake, it’s no surprise that when things go wrong, they can go very wrong.

At Daniel W. McKay & Associates, PLLC, we help Utah clients resolve complex real estate disputes and, whenever possible, prevent them in the first place. Here’s a look at the most common issues that lead to litigation—and how to protect yourself.

1. Breach of Contract

Real estate deals rely heavily on detailed purchase agreements. If either party fails to uphold the terms—like not closing on time, failing to deliver clear title, or backing out without a valid reason—it may be considered a breach of contract.

Examples in Utah:

• A seller refusing to make agreed-upon repairs
• A buyer missing the financing deadline or failing to close without excuse
• Disagreements over contingencies (like inspections or appraisals)

2. Failure to Disclose Defects

Utah law requires sellers to disclose known material defects that could affect the value or safety of the property. When sellers fail to do this, buyers may have grounds for legal action.

Common hidden defects include:

• Mold or water damage
• Structural issues or foundation problems
• Pest infestations
• Unpermitted renovations or additions

These cases often hinge on whether the defect was known and intentionally concealed.

3. Boundary or Easement Disputes

Disputes involving property lines, fences, or easements can lead to litigation even after the transaction is complete. These issues can delay construction, lower property value, or limit the buyer’s intended use.

Typical boundary disputes in Utah:

• Neighbors disagreeing on fence placement
• Shared driveways or access easements not properly recorded
• Encroachments discovered during or after the sale

4. Title Problems

Even with title insurance, issues like undisclosed liens, forged documents, or inheritance claims can surface. If the title isn’t clear, buyers may not receive the full legal ownership they paid for.

Title issues often involve:

• Unexpected liens or judgments
• Missing heirs or contested ownership
• Clerical errors in past deeds

5. Financing and Appraisal Disputes

Deals can fall apart—or head to court—when a buyer’s financing fails or the home appraises far below the offer price. While contracts often include protections like appraisal contingencies, failure to handle these properly can spark legal action.

6. Agent or Broker Misconduct

Buyers and sellers rely on real estate professionals for guidance. But if an agent misrepresents facts, fails to disclose a conflict of interest, or provides negligent advice, they could be liable for resulting damages.

How Daniel W. McKay & Associates, PLLC Can Help

Real estate litigation can be stressful, time-consuming, and expensive. Our firm offers legal support at every stage of the transaction:

• Contract review and drafting
• Risk assessment before closing
• Negotiation and dispute resolution
• Litigation, when necessary, in Utah courts

Whether you’re a buyer, seller, or real estate professional, having experienced legal counsel can make all the difference.

Call us at (801) 798-8000
Visit www.dmckaylaw.com to learn how we can help you with real estate transactions and disputes