What Are Some Common Property Value Disputes?
Disputes regarding property value can arise from differing opinions or assessments concerning the worth of a piece of real estate. These can be between a buyer and seller, between neighbors over boundary impacts on value, or even between a homeowner and a local tax assessor.
Here are examples for each of these scenarios.
Between a Buyer and Seller
Example: Mr. Smith decided to sell his countryside house. He listed the property for $500,000, citing its historic significance and the recent renovations he had completed. Ms. Davis, a potential buyer, became interested. However, after having the property independently appraised, the valuation came back at $450,000. The appraiser believed that the historic significance added less value than Mr. Smith assumed, and some of the renovations, in the appraiser’s view, weren’t up to par. This difference in valuation led to a dispute between Mr. Smith and Ms. Davis about the fair selling price of the home.
Between Neighbors Over Boundary Impacts on Value
Example: The Martins and the Garcias lived next to each other in a suburban neighborhood. The Garcias decided to add an extension to their home, which would slightly encroach on what the Martins believed to be their property.
Besides being a boundary violation, the Martins felt that this encroachment would obstruct their view and negatively impact their property value. This led to a dispute regarding not just the boundary but also the potential decrease in Martin’s property value due to the Garcias’ extension.
Between a Homeowner and a Local Tax Assessor
Example: Mrs. Robinson had been living in her home for 20 years. The local tax assessor re-evaluated properties in the area and determined that her home’s value had significantly increased, leading to a substantial rise in her property taxes.
Mrs. Robinson disagreed with this new valuation, believing that the assessor had overestimated the worth of her home. She felt that they had not taken into account the age of her house and some structural issues she was facing. This difference in valuation opinion led to a dispute between Mrs. Robinson and the local tax assessor over the proper assessment and resulting tax obligations.
Divorce and Dividing Assets
Another common arena for such real estate disputes is during a divorce when dividing assets. Additionally, title defects such as a lien or an easement can affect property value, leading to further disagreements.
Let’s delve deeper into these specific situations.
1. Property Value Disputes During a Divorce
When a couple decides to divorce, the division of assets, including real estate properties, often becomes a significant point of contention. Determining the exact value of shared property is crucial because it affects how assets are split.
Example: Jack and Diane, after 15 years of marriage, decide to divorce. They own a family home, which they bought a decade ago. Jack believes the house has significantly appreciated in value due to a booming property market in their area. However, Diane argues that the value hasn’t increased as much as Jack thinks because the house requires extensive repairs.
Each party may get separate appraisals, leading to different valuations, thus causing disputes during asset division. Such disagreements may complicate the divorce process, potentially requiring legal intervention to ensure both parties feel they are getting a fair deal.
2. Disputes Arising from Title Defects
Lien
A lien is a claim or charge on property for payment of some debt, obligation, or duty. When a homeowner has unpaid debts, creditors might place a lien on the homeowner’s property, making it difficult to sell without first clearing the debt. This can lower the effective value of the property, as potential buyers will factor in the cost of resolving the lien.
Example: Maria decides to sell her home, but a potential buyer’s title search reveals an unpaid contractor lien from a renovation job Maria thought was paid in full. The buyer may argue for a lower price, considering the cost and hassle of resolving the lien. At the same time, Maria believes the house should be valued without the lien’s impact.
Easement
An easement gives someone the right to use a portion of another person’s property for a specific purpose, often related to access or utilities. Easements can affect property values, especially if they limit the owner’s ability to fully use or change their property.
Example: Robert’s property has a driveway that’s technically on his neighbor Sheila’s land. An easement allows Robert to use this driveway to access his house. When Sheila decides to sell her property, potential buyers may be concerned about the easement, believing it could limit potential uses for the land or impact its privacy. This can result in disputes regarding the property’s true value, given the existence of the easement.
How Are Property Value Disputes Resolved?
Resolving property value disputes will often begin with a reassessment of the property by a neutral third party, typically a licensed appraiser. The appraiser will provide an unbiased assessment based on comparable sales, the property’s condition, and other pertinent factors.
If the parties involved are still dissatisfied, they might choose to enter mediation or arbitration, where a neutral third party facilitates a resolution. In some cases, especially when title defects such as liens or easements are involved, the dispute may escalate to litigation. This will require a court to make a determination based on the presented evidence and relevant real estate laws.
Here’s an overview of how this litigation process typically works.
1. Filing the Lawsuit
The aggrieved party, referred to as the plaintiff, initiates the process by filing a lawsuit against the other party, known as the defendant. This lawsuit outlines the nature of the dispute, the title defect in question, and the relief or resolution sought.
2. Discovery
Once the lawsuit is filed, both parties enter the discovery phase, where they exchange relevant information and documents. These may include title searches, property appraisals, contracts, or any other relevant evidence that could influence the case.
3. Pre-trial Motions
Before the trial commences, either party can file motions to request the court make specific rulings on various aspects of the case. For instance, one party might file a motion to dismiss the case if they believe it lacks merit or a motion for summary judgment if they believe the facts are indisputable and the court can make a ruling without a full trial.
4. Trial
If pre-trial motions don’t resolve the case, it will proceed to trial. Both parties present their evidence and arguments before a judge (and possibly a jury, depending on the jurisdiction and nature of the case). Expert witnesses, such as property appraisers or specialists in real estate laws, might be called upon to offer testimony.
5. Judgment
After considering all presented evidence and arguments, the judge will make a ruling. This ruling might involve declaring a lien invalid, clarifying the terms of an easement, or ordering a party to take specific actions, such as paying off a lien or compensating for a reduction in property value.
6. Appeals
If either party believes the court made an error in its judgment, it might choose to appeal the decision to a higher court. The appellate court will review the case’s records and may either affirm the original decision, reverse it, or remand the case back to the lower court for further proceedings.
7. Enforcement
Once a final judgment is made, parties are legally bound to adhere to it. If a party fails to comply, the other can return to court to seek enforcement. This enforcement could involve property seizures, monetary judgments, or other legal remedies.
Do I Need a Lawyer for a Property Value Dispute?
When faced with a property value dispute, especially one that involves complex real estate laws or significant financial stakes, it’s advisable to consult with a legal professional. A property valuation lawyer can provide invaluable advice, represent your interests, and guide you through the complexities of the dispute resolution process.
If you find yourself embroiled in a property value dispute or simply need guidance on real estate laws, consider seeking experienced representation. With LegalMatch, you can effortlessly find a proficient real estate lawyer to help you navigate and potentially resolve your dispute. Connect with a professional today through LegalMatch.
