Resolving Post-Closing Housing Disputes: How Credible is the Threat of Litigation?

Double-Edged Sword

“What’s sauce for the goose is sauce for the gander.”

–Proverb.

[Editor’s Note: The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway, or any other entity referenced.  If you need legal advice, please consult an attorney.]

Even though litigation is notoriously expensive, at least a few home buyers elect to preserve their right to sue — rather than arbitrate** — any post-closing disputes.

Their logic?

Precisely because lawsuits are so expensive, they believe the mere threat of litigation is a negotiating club that can be used to extract a settlement from the Seller.

Pyrrhic Victory?

Unfortunately, there’s one, major defect in that thinking:  before the Seller will incur legal fees, the Buyer will — and their legal fees will come first.

And while some plaintiffs are under the impression that, if they prevail in court, the judge will order the defendant to pay their legal fees, in practice that almost never happens.

**In Minnesota, home Buyers and Sellers choose between arbitration and litigation (lawyers, courtrooms, etc.) to resolve most issues above $15,000.  Effective August 1, any issues below that amount must be dealt with in Small Claims (Conciliation) court.



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