1. Property Title and Ownership Issues
Title defects represent one of the most serious risks in real estate transactions. A clear title means the seller has the legal right to transfer full ownership to you without encumbrances or competing claims. From a practitioner's perspective, title problems often emerge during the examination phase, when an attorney or title company reviews public records and prior deeds. Common defects include liens, easements, boundary disputes, or gaps in the chain of ownership that create uncertainty about who actually owns the property.
How Title Examination Works
Before closing, a title search reveals the property's ownership history and any recorded claims against it. The title company or your attorney examines documents going back decades to confirm the seller has marketable title, meaning free from reasonable doubt and acceptable to a prudent buyer. If defects are discovered, the seller must cure them, typically by obtaining a release of a lien, resolving a boundary dispute, or providing documentation that closes gaps in the chain. When a seller cannot or will not cure a defect, you have the right to terminate the contract or negotiate a price reduction. In New York, the Uniform Commercial Code and the Real Property Law govern these title standards, and disputes over title defects frequently reach the Supreme Court, Appellate Division, where courts apply the doctrine of marketable title to determine whether a seller has fulfilled their obligation to convey clear ownership.
Liens, Easements, and Encumbrances
Liens are creditor claims on the property, such as tax liens, judgment liens, or mortgage liens. Easements grant others the legal right to use part of your property, such as a utility company's right to access underground cables. These encumbrances reduce the value and use of the property and must be disclosed before closing. If you discover an undisclosed lien or easement after purchase, you may have a claim for breach of the purchase agreement or misrepresentation. Title insurance protects against certain title defects that existed before closing but were not discovered during the title search.
2. Contract Formation and Enforceability
A real estate purchase agreement is a binding contract that sets the price, closing date, contingencies, and each party's obligations. Courts enforce these contracts strictly because real property is considered unique; damages alone cannot fully compensate a buyer who loses the opportunity to purchase a specific property. Disputes arise when one party claims the contract is incomplete, was induced by fraud, or should be voided due to changed circumstances.
Specific Performance and Breach Remedies
If a seller refuses to close after signing a binding contract, a buyer can seek specific performance, a court order requiring the seller to transfer the property as promised. New York courts routinely grant specific performance in real estate cases because each property is unique and monetary damages are an inadequate remedy. A seller who breaches faces not only the cost of litigation but also the possibility of being forced to convey the property at the agreed price, even if market conditions have changed. Conversely, if a buyer wrongfully refuses to close, the seller can sue for specific performance to force the buyer to purchase, or can pursue damages equal to the difference between the contract price and the market value at the time of breach.
Contingencies and Closing Conditions
Most purchase agreements include contingencies, such as the buyer obtaining financing, a satisfactory home inspection, or a clear title examination. These contingencies protect the buyer by allowing termination if conditions are not met. Courts interpret contingencies strictly; a buyer cannot use a contingency as a pretext to escape a contract merely because market conditions have changed unfavorably. In practice, disputes over contingencies often turn on whether the buyer acted in good faith to satisfy the condition, such as making a genuine effort to obtain a mortgage rather than deliberately failing to apply for financing.
3. Financing, Closing Delays, and Remedies
Financing complications and closing delays create significant friction in real estate transactions. A lender may impose additional conditions, request further documentation, or deny the loan application after the purchase agreement is signed. Delays in title clearance, survey issues, or environmental concerns can push the closing date backward, creating uncertainty and expense for both parties.
Lender-Imposed Conditions and Appraisal Issues
If the lender's appraisal comes in below the purchase price, the lender may reduce the loan amount, requiring the buyer to pay more cash or renegotiate the purchase price. A buyer whose financing contingency is written carefully can terminate the contract if the appraisal shortfall is substantial. Lenders also impose conditions related to title insurance, flood insurance, or property inspections. Understanding the scope of your financing contingency and communicating with your lender early prevents last-minute surprises.
New York Supreme Court Procedures for Closing Disputes
When parties dispute whether a closing should proceed or whether one party has breached the contract, the dispute typically reaches New York Supreme Court, where judges have broad equitable powers to grant specific performance, award damages, or rescind the contract. The court examines the plain language of the purchase agreement, the conduct of both parties, and whether all conditions precedent to closing have been satisfied or waived. In practice, these disputes are rarely as clean as the contract language suggests; courts must evaluate whether a party's failure to satisfy a condition was material and whether the other party waived strict compliance by accepting partial performance or remaining silent.
4. Strategic Considerations before Closing
Several steps reduce legal risk and protect your interests. Hire a real estate attorney to review the purchase agreement, title report, and all closing documents before signing. Conduct a thorough home inspection, and have your attorney explain the scope of title insurance and any exceptions. Confirm your financing is solid and that the lender has no remaining conditions. Verify that the seller has disclosed all known defects and that no liens or code violations are outstanding.
| Issue | Red Flag | Action |
| Title Defect | Lien or gap in ownership chain | Require seller to cure before closing; obtain title insurance |
| Financing Denied | Appraisal shortfall or lender condition | Review contingency language; communicate with lender immediately |
| Closing Delay | Survey issues or environmental concerns | Obtain extension in writing; clarify responsibility for resolution |
| Undisclosed Defect | Code violation or structural damage | Document in writing; consult attorney about rescission or price adjustment |
Before closing, verify that all contingencies have been satisfied or waived in writing. Confirm the final walkthrough shows no new damage or unauthorized removal of fixtures. Ensure your homeowner's insurance is in place and that hazard insurance is effective at closing. Review the closing statement carefully and reconcile all figures against the purchase agreement and loan estimate.
The closing process involves multiple parties, each with their own interests and timelines. A real estate law specialist coordinates with the title company, lender, and seller's counsel to ensure all documents are prepared correctly and all funds are accounted for. If disputes arise before or at closing, your attorney can advise whether to proceed conditionally, demand specific performance of the seller's obligations, or terminate the contract. Understanding your rights under New York law and the specific terms of your purchase agreement allows you to make informed decisions and protect your investment. When title disputes or contract disagreements emerge, consulting counsel early often resolves the issue without litigation and preserves your ability to close or exit the transaction on favorable terms.
For complex transactions or disputes involving real estate laws and regulatory compliance, or if you face a contested closing or real estate civil lawsuit, an experienced attorney can evaluate your position, negotiate with the other party, and represent you in court if necessary. The key is to act promptly when problems surface and to document all communications and agreements in writing.
04 Feb, 2026
