What Happens If Someone Contests the Sale of a Property?

Posted by Darren KennedyJan 17, 20250 Comments

Contesting the sale of a property can create delays and complications for both buyers and sellers. When someone contests the sale, they're challenging the validity or legality of the transaction. There are a few common reasons why this might happen, and understanding them can help prevent issues during a property sale.

Common Reasons for Contesting a Sale:

  1. Ownership Disputes: If there's confusion about who legally owns the property, a sale can be contested. This is common in family situations or among business partners where multiple people claim ownership.

  2. Failure to Disclose Issues: Sellers are legally obligated to disclose significant property issues, such as structural damage or unpaid liens. If a buyer believes the seller hid these issues, they may contest the sale.

  3. Fraud or Misrepresentation: If a buyer feels misled about the property's value or condition, they may contest the sale, seeking compensation or cancellation of the transaction.

  4. Probate Disputes: If the property is part of an estate, family members or heirs may contest the sale if they believe it wasn't handled properly or that the sale price is too low.

What Happens After a Sale is Contested?

  1. Delays: A contested sale often leads to delays in closing, as the dispute needs to be resolved before the transaction can be finalized.

  2. Legal Action: If the dispute cannot be settled between the parties, it may need to go to court. A judge will determine whether the sale is valid or if it should be canceled.

  3. Escrow Issues: If the sale is contested, the funds in escrow may be tied up while the dispute is ongoing, and could be lost if the contesting party is unsuccessful.

  4. Financial Consequences: Both parties may face legal fees and, in some cases, could be required to return funds or face other financial penalties depending on the outcome.

How to Avoid Contesting a Sale:

  • Ensure Clear Title: Before selling, confirm that the property's ownership is clear and there are no disputes.
  • Full Disclosure: Sellers should fully disclose any property issues to avoid future claims.
  • Legal Advice: Consulting with a real estate attorney can help ensure that everything is in order and minimize the chance of a contested sale.

While contesting a property sale can complicate things, being proactive about ownership, transparency, and legal guidance can help ensure a smoother transaction. Always consult a real estate attorney in the event of contest of sale.