When it comes to real estate developments, there are many challenges that can catch you by surprise and seriously hinder the progress of your project. One such example is the temporary injunction, which stands out as particularly disruptive.
Therefore, understanding temporary injunctions is crucial especially for California developers and property owners. How one responds to such legal actions can dramatically influence the fate of a development project.
What is a temporary injunction?
A temporary injunction is a short-term court order that stops specific actions until a full hearing. For example, an order may be able to block construction for extended periods of time, stop property changes or even interrupt a sale.
Essentially, courts use temporary injunctions to keep property status intact while involved parties resolve disputes. Unlike permanent injunctions after a trial, temporary ones are short-term fixes.
Delays, timeline extensions
Because of a temporary injunction, a real estate project may have to shut down. This could result in long stretches of delays, missed deadlines and extended timelines. This may ultimately derail the entire venture.
Financial burden
As a result of an order, you might have to deal with high expenses. This is because you could have to pay for equipment rentals, labor, and possible contract breach penalties. All of this may happen even if work is on hold.
Damaged reputation
Meanwhile, amid the injunction, investors, partners and interested buyers might have second thoughts about the state of a development.
Countering a temporary injunction
While it can seem intimidating to tackle a temporary injunction, especially as it pertains to your project’s future, there are options available to you.
If you find yourself facing one of these court orders, these approaches may turn the tide:
- Act fast: Time is of the essence. Acting quickly can influence the outcome of a situation for the better.
- Gather proof: Collect documents, emails, and expert opinions that support your side.
- Challenge grounds: Disputing the reasons for the injunction could be key to defense.
- Suggest options: Offer alternatives that may resolve the dispute without fully stopping your project.
Court-ordered injunctions are serious problems for any development. However, understanding what these orders are can set the stage for better preparation and response strategies.