What Are Punitive and Non Punitive Damages?

In the context of real estate disputes, damages can be classified into two main categories: punitive damages and non-punitive damages. Here’s an overview of each:

1. Punitive Damages:

• Definition:

  • Punitive damages are awarded over and above actual damages to punish the defendant for egregious behavior and to deter similar conduct in the future. They are not intended to compensate the plaintiff but rather to serve as a penalty.

• Purpose:

  • To punish the wrongdoer for particularly harmful or malicious conduct.
  • To deter others from engaging in similar misconduct.

• Criteria:

  • Generally awarded in cases where the defendant’s behavior is deemed to be willful, malicious, fraudulent, or grossly negligent.
  • The plaintiff must usually prove that the defendant’s actions were particularly egregious.

• Application in Real Estate:

  • In real estate, punitive damages might be awarded in cases of fraudulent misrepresentation, severe breach of contract, or intentional misconduct by a party involved in the transaction. For example, if a seller intentionally conceals a major defect in a property to deceive the buyer, punitive damages might be considered.

2. Non-Punitive Damages:

• Definition:

  • Non-punitive damages are designed to compensate the plaintiff for actual losses suffered as a result of the defendant’s actions. These damages aim to make the plaintiff “whole” again by covering the financial impact of the wrongdoing.

• Types:

  • Compensatory Damages: Cover direct losses such as repair costs, lost value, or expenses incurred due to the defendant’s actions.
  • Consequential Damages: Address secondary losses that result from the primary harm, such as lost income or additional expenses caused by the issue.
  • Nominal Damages: A small amount awarded when a legal wrong has occurred but the plaintiff did not suffer significant loss or harm.

• Purpose:

  • To compensate the plaintiff for actual financial losses or inconvenience caused by the defendant’s actions.
  • To restore the plaintiff to the position they would have been in if the wrongdoing had not occurred.

• Application in Real Estate:

  • In real estate disputes, non-punitive damages might be awarded for things like:
    • Repair Costs: To cover the cost of fixing defects in a property that were not disclosed.
    • Lost Property Value: Compensation for a decrease in property value due to the defendant’s actions.
    • Rental Losses: Compensation for lost rental income if the property was not usable due to defects or breaches.

Key Differences:

• Objective:

  • Punitive Damages: Intended to punish and deter.
  • Non-Punitive Damages: Intended to compensate for actual losses.

• Basis for Award:

  • Punitive Damages: Require proof of egregious conduct.
  • Non-Punitive Damages: Based on quantifiable losses and actual harm suffered.

• Legal Basis:

  • Punitive Damages: Typically awarded in cases of severe misconduct or fraud.
  • Non-Punitive Damages: Common in various types of disputes to address tangible harm.

Understanding these types of damages can help in assessing the potential outcomes of a real estate dispute and in determining the appropriate legal strategy.

Real Estate Expert Witness Services by Craig Cherney, Esc.

Craig Cherney is a trusted client advisor and a sought after real estate expert witness who is hired by the nation’s top Real Estate Litigation Attorneys to help resolve their litigated real property matters.  Craig has appeared as a testifying expert witness before judges and juries in California, Arizona, Nevada and other jurisdictions across the country. Craig Cherney, Esq. Expert Witness Real Estate. 480-399-2342.