To Sell or Not to Sell, That is the Question2020-04-23T00:25:22+00:00
10.14.2013 // CONSTRUCTION LAW WATCH
To Sell or Not to Sell, That is the Question

One of the most frequently asked questions either during the initial stages of a construction defect lawsuit, or certainly somewhere during the lawsuit, is “What if I want to sell my house?” This rather simple question unfortunately has rather complicated response that boils down to “That depends.”

Putting aside the issue of whether there are any lenders who will finance the purchase of the home, the seller has essentially two decisions to make: First, how much to disclose of the lawsuit and the allegations of defects? Second, what to do with the lawsuit itself?

As to the first question, the seller must make a full disclosure of what is known (or be asking for trouble later). Generally, all states recognize a claim for fraud if a seller fails to disclose known construction defects that are not reasonably known to the buyer. For those owners living in a townhome or condominium community, the Homeowners Association records will have documentation of the litigation, which should be shared with the potential buyers.

As to the second question, for those owners living in a townhome or condominium community, most often the Homeowners Association is the named plaintiff so an individual unit sale should have little or no effect on the lawsuit itself.  If you are a single family homeowner, however, there are several options. You can assign your rights in the lawsuit to the new buyer. Or, you could choose to dismiss your lawsuit, leaving it to the new owner to pursue should he or she choose to do so. Or, you could retain your rights in the lawsuit, which may open a Pandora’s box new issues from how to calculate your damages to who is the real-party-in-interest.

In short, if you are considering litigation or currently in litigation involving the construction of your home, you should be aware that attempting to sell your home during the lawsuit is a complicated proposition, requiring careful consideration of all your options. A recent post in this blog contained an article explaining more on this topic.  Click here to read the article.  

Photo courtesy of Flickr, by Jeremy Hall

ABOUT BALL JANIK LLP

Ball Janik LLP was founded in 1982 with six lawyers and a four-person support staff in Portland, Oregon. Since our firm’s inception, we have expanded our capabilities, our professionals, and geographic footprint. What started as a firm focused in real property and land use (known then as Ball Janik & Novack), has grown to include the insights of a team of 30-plus attorneys, with a combined six centuries of experience, and capabilities including Real Estate and Land Use, Construction Defect, Commercial Litigation, Insurance Recovery, Construction and Design, Employment, Finance and Corporate, Public Agencies and Schools, and Community Associations. With offices in Florida and Oregon, our regional growth has earned us a national reputation for upholding the rights of our clients.

Ball Janik LLP has been recognized by Chambers USA, U.S. News & World Report and Best Lawyers®, The Best Lawyers in America©, and Corporate International. Ball Janik LLP’s success and integrity have repeatedly made it one of “Oregon’s Most Admired Professional Firms,” according to the Portland Business Journal’s survey results of CEOs throughout the region.

Heather J. Oden
Oregon , Portland
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