As I’ve mentioned before, my lawyer once said, “In a lawsuit, you may win and
you may lose, but I guarantee one thing: I will win.” Lawyers always get paid. Ouch.

     He’s right, of course. Resolving disputes by going to court will likely cost more
than other options. However, when you’ve exhausted all other dispute resolution
options, sometimes all you can do is take them to court.

      In real estate, as in many fields, if you’re going to take someone to court, you
must do so before the statute of limitations runs out. Your lawyer is the one to provide
you with details and advice, but here’s the timetable for common real estate disputes.

Adverse Possession

     Adverse possession occurs when someone with a tenuous claim on a property
moves onto the property, pays all property taxes, and based on their continuous and
open occupation of that property, claims it as their own. If you want to fight this person’s
claim, you need to do so before they’ve lived there and paid taxes for five years. After
that, it may be too late.

Breach of Contract/Lease
     Breach of contract lawsuits for oral agreements must be filed within two years
and for written agreements must be filed within four years.

Enforcement of Civil Judgments (in any state or federal court)
     Let’s say you take someone to court in a real estate matter and the judge rules in
your favor. You must then record an “abstract of judgment” to make the ruling public in
all the places it matters. Otherwise, it’s very difficult to collect on it. With a recorded
abstract of judgment, if the defendant tries to buy or sell property or borrow against
property, the abstract will show up on a public records search, and odds are good you’ll
get paid.
     If more than ten years lapses after the judgment (especially if you don’t have an
abstract), you may not get paid. Note, you can extend an abstract as long as you do it
before the ten years are up.

Fraud or Mistake

     If you want to file a lawsuit claiming fraud, you have three years from the
discovery of the fraudulent act to do so. Potentially, a lawsuit could be filed decades
after fraud was perpetrated, if that’s when you find out about it. Keep in mind that the
“reasonable person” doctrine applies here. You cannot, for example, claim that you
purchased a home based on the seller’s description of there being two bathrooms, and
then sue for fraud years after moving in, claiming you just noticed the house only has
one bathroom.

Injury to Trees
     The statute of limitations on injury to trees is five years. Let’s say a tree sits on
the property line between you and your neighbor. The neighbor doesn’t like the tree
overhanging their property for fear the tree will fall on their roof or because they believe
it poses a significant fire risk. So, they prune all the branches on their side. As a result,
the tree dies within three years. You could sue your neighbor.

Latent Defect in Real Property
     A latent defect is a fault in a property that even a reasonably thorough inspection
wouldn’t pick up, things like faulty wiring or bad plumbing that you wouldn’t know unless
you tore off the sheetrock and looked behind the walls. Or, let’s say there was a fire in
the house years ago, but the current owner was never told, and no one went into the
attic. The new owner decides to add insulation in the attic and discovers the beams
have so much fire damage that they are no longer structurally sound. If this is
discovered within ten years, the buyer may be able to bring a lawsuit.

     These are all legal in nature, so they are subject to legislative changes and
judicial discretion. This means you should absolutely talk to your attorney at the first
sign of a significant conflict.

     Next week, I’ll share more common real estate disputes and their statutes of
limitations.

     If you have questions about property management or real estate, please contact
me at [email protected] or call (707) 462-4000. If you have an idea for a future
column, share it with me and if I use it, I’ll send you a $25 gift certificate to Schat’s
Bakery.

     Dick Selzer is a real estate broker who has been in the business for more than
50 years. The opinions expressed here are his and do not necessarily represent his
affiliated organizations.