When Real Estate Transactions Become Litigation

The goal of a real estate transaction is generally to achieve a transfer of real property mutually sought by buyer and seller. But as a recent arbitration win secured by Arent Fox illustrates, a go-to litigator is sometimes required to address disputes involving real estate deals.

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The matter presented a fact pattern too familiar to parties involved in real estate transactions. A real estate broker made a claim against Arent Fox’s client, a tenant, asserting it was entitled to a commission. The transaction included the tenant’s surrender of its commercial lease and move to a different space in the same building. An agreement provided for arbitration before the Real Estate Board of New York (REBNY).

Principals on either side of the negotiating table may confront such a claim. In this instance, Arent Fox Partner Michael Cryan represented the tenant and secured a favorable arbitral award for the client. After convening a hearing involving witnesses and documents, the REBNY arbitration panel ruled that the broker was not entitled to a commission based on the facts presented.

Litigation is rarely, if ever, the goal of a transaction involving real estate. When a dispute develops, parties are well-advised to obtain representation by litigators experienced in handling real estate deals.

Takeaways

  • Be proactive. If there is potential litigation relating to a transaction, consult counsel right away to address or avoid any issues.
  • If a claim is asserted or threatened, consult counsel immediately – before responding.
  • If you even suspect a problem may be lurking concerning a transaction, reach out now for advice.

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