Here Are The Most Common Reasons Why Commercial Real Estate Litigation in Arizona Occurs

Commercial real estate litigation in Arizona is an increasingly common occurrence. As businesses in the state strive to purchase and develop commercial properties, they are often met with a variety of challenges that can lead to litigation. From ownership and contract disputes to zoning issues and more, there are a variety of reasons why commercial real estate litigation can occur in Arizona. In this article, we will explore some of the most common causes of commercial real estate litigation in the Grand Canyon State.

Breach of Contract

Contract disputes typically occur when one party fails to adhere to the contractually agreed upon terms. If you have entered into a contract to purchase a piece of property and the seller fails to live up to their end of the deal, you may have grounds for a breach of contract lawsuit. 

Zoning and Land Use Disputes

When zoning and land use laws are in dispute, a zoning lawsuit can often result. In the state of Arizona, zoning laws and other land use ordinances are created at the local level by the city or town where the property is located.

If a commercial property owner’s proposed use of the land is not permitted under local zoning regulations, a zoning dispute can result. The property owner may challenge the city’s decision at the local level, or they choose to file a zoning lawsuit in order to seek a legal remedy for the zoning issue. 

Environmental Issues

Environmental issues can cause significant disputes in commercial real estate. These issues can include groundwater contamination, soil pollution, and surface water contamination. A real estate owner may be held financially responsible for cleaning up contamination on the property if it occurred prior to the ownership of the land.

In addition, the government may require that the property be remediated if it was contaminated after the property was purchased. An owner who fails to clean up contamination may face significant fines, and may also be forced to sell the property.

Construction Defects

Construction defects can occur in any type of real estate development. These defects can include shoddy workmanship, faulty materials, and more.

If you discover construction issues with the property you purchased, it’s important to act quickly. It’s crucial to note that the statute of limitations for construction defects is very short: two years from the date that the issues were discovered or should have been discovered. If you fail to file suit within this timeframe, you may lose your ability to file a lawsuit.

Eminent Domain Disputes

Eminent domain is the process by which the government seizes private property for public use. If a government agency seizes your land for a public project and offers you a fair amount of compensation for the property, there is likely nothing that you can do to stop the seizure.

However, if the government does not offer you a fair amount of compensation for the property, you may have legal grounds to file a lawsuit against the government agency, known as a condemnation complaint. The Arizona eminent domain statutes provide property owners with significant protections against government agencies.

Title Disputes

Title disputes are often the result of a title defect, such as a faulty deed or a lien that was not properly recorded. If a title defect exists on the property and you discover it after you have purchased the property, you may be able to file a claim against your title insurance company.

If the title insurance company refuses to pay your claim, you may have to file a lawsuit against the title insurance company to recover your losses.