Commercial real estate litigation in California is very difficult. You've likely invested heavily in your commercial property, and now a legal issue has arisen. It might involve a lease dispute, a breach of contract, or construction problems. California's courts can be confusing, especially with the rise of complicated commercial real estate litigation laws in 2024.

This guide clarifies the process of commercial real estate litigation in California so you won't have to navigate the legal system blindly.

Table of Contents:

• Understanding Commercial Real Estate Litigation in California
• Commercial Litigation vs. General Litigation
• Common Issues in Commercial Real Estate Litigation
• Navigating the California Court System
• How a California Real Estate Lawyer Can Help
• FAQs about Commercial Real Estate Litigation in California
  • What is commercial real estate litigation?
  • What is the difference between commercial litigation and litigation?
  • What is California Prop 13 commercial real estate?
  • What is arbitration vs. litigation in real estate?
• Conclusion

Understanding Commercial Real Estate Litigation in California

Commercial real estate litigation encompasses any legal battle related to commercial property. This includes retail spaces, office buildings, and industrial complexes. These disputes can occur between landlords and tenants, buyers and sellers, lenders and borrowers, and property owners and contractors.

Common disputes involve property damage, construction defects, commercial leases, contracts, and even property ownership. Now, let's compare commercial litigation to general litigation.

Commercial Litigation vs. General Litigation

Commercial litigation is a subset of litigation. All litigation involves presenting your case in court. General litigation can include a variety of cases such as family disputes, criminal charges, or personal injury claims.

Commercial litigation focuses on business-related disputes. Within commercial litigation is our focus: California commercial real estate litigation.

Common Issues in Commercial Real Estate Litigation

Here are some frequent California commercial property disputes:

• Breach of Contract: A party violates a contract, such as a purchase agreement, lease, or a construction deal.
• Lease Disputes: These include disagreements over late rent, lease options, and property maintenance.
• Construction Defects: Issues range from poor workmanship to code violations, often leading to costly repairs and loss of rental income due to vacancy during repairs.
• Property Disputes: Disagreements over property lines, ownership, easements (the right to use another's property), and other property-related issues.
• Eminent Domain: The government's power to take private property for public use, often disputed regarding just compensation.
• Partnership Disputes: Conflicts between business partners, often stemming from breaches of operating agreements.

Navigating the California Court System

Here's a simplified overview of the California court process for real estate disputes:

1. Starting the Lawsuit: Filing a complaint with the correct California court, outlining the legal claims and relevant real estate law.
2. Serving the Defendant: Formally notifying the defendant of the lawsuit, giving them time to respond. Legal malpractice claims would also begin similarly.
3. Discovery: Both sides gather evidence through document exchange, interrogatories, depositions, and hearings. This often includes investigating financial services related to the property, or exploring alternative dispute resolution options like mediation.
4. Motions: Formal requests to the court, such as dismissing part of a case or compelling discovery compliance. This might involve addressing mechanic's lien issues, ADA lawsuits, or environmental litigation.
5. Settlement: Many cases resolve through negotiation, mediation, or arbitration before trial, sometimes assisted by a neutral party.
6. Trial: If a settlement isn't reached, evidence is presented in court, and a ruling is made. Litigants may choose to appeal if necessary. A real estate litigation lawyer can also provide risk management advice.

How a California Real Estate Lawyer Can Help

While you can represent yourself in a real estate dispute, it's not recommended. A commercial real estate lawyer understands the complexities of property disputes, California law, and relevant legal issues. They can help with class action defense and business law matters.

A real estate lawyer handles court procedures, legal jargon, and negotiations, reducing your stress. They have experience, resources, and knowledge of California's real estate market, including connections to expert witnesses. Their practice areas often include intellectual property, business litigation, and employment litigation. They handle disputes involving sale agreements, lease purchase options, and lien claims, and provide risk management services.

Estate planning attorneys in California are especially adept at assisting with various estate disputes including matters of bad faith, fiduciary duty and property litigation.

FAQs about Commercial Real Estate Litigation in California

What is commercial real estate litigation?

Commercial real estate litigation involves legal disputes related to commercial properties like office buildings, retail spaces, and industrial complexes. These disputes frequently include breach of contract, lease disagreements, construction defects, and property ownership issues.

What is the difference between commercial litigation and litigation?

Commercial litigation is a specific type of litigation. It focuses on business disputes, such as commercial real estate matters, intellectual property issues, and contract disputes. Litigation covers a broader range of legal disputes, including personal injury, family law, and criminal cases.

What is California Prop 13 commercial real estate?

California's Proposition 13, enacted in 1978, limits property tax increases. The increases are restricted to 1% of the assessed value when purchased or when new construction was finished. The assessed value rises by a maximum of 2% annually, unless ownership changes or new construction occurs.

While seemingly low, given California's substantial real estate appreciation since 1978, Prop 13 provides considerable savings for long-term property owners. There is ongoing litigation about its application to leasehold interests, leading to more commercial litigation as California interprets the law. Property owners also can consider legal issues such as ADA defense and website design, for California real estate specifically.

What is arbitration vs. litigation in real estate?

Arbitration, a form of alternative dispute resolution, is a private process where a neutral arbitrator decides the dispute. Like a trial, it involves presenting evidence and arguments. Arbitration can be non-binding or binding.

Arbitration is often favored over litigation because it is usually faster and less expensive, making it appealing for real estate disputes. Binding arbitration is most similar to court since those found responsible must comply with the arbitrator's decision, increasing efficiency. Some California lawyers handle disputes regarding mechanic's liens. A California real estate attorney can offer additional insights on issues including eminent domain or property dispute cases.

Conclusion

Commercial real estate litigation in California is complex. Preparation is crucial for fair resolution. Understanding property law, contract language, and legal procedures is essential. Having legal representation and insight are invaluable resources to navigate real estate legal battles, regardless of their nature, be it over eminent domain, commercial lease disputes, fiduciary duty, or other.

If you face real estate legal challenges in California, whether eminent domain challenges or commercial lease disputes, use the information in this guide. With knowledge and strategy, you can navigate California commercial real estate litigation and potentially maximize your investment's full potential.