Breach of Real Estate Contract by Seller
Every now and then, a home seller will back out, having gotten cold feet, received a better offer, experienced a change in life circumstances, or something else. A home buyer has certain remedies available if a seller wrongfully fails or refuses to perform the obligations under a contract for the sale of real property. Read on to learn more.
Did the Seller Really Default?
Read the contract and see if the seller (as well as the buyer) likely has some legal ways out of it, with no consequences. These are typically found in the form of “contingencies.” If, for instance, you and the seller agreed to include a contingency in the contract saying that the sale was contingent on the seller finding another house to buy, and the seller has been unable to find any place to move to, the seller is not at fault.
Claiming Money Damages for Seller’s Breach of Real Estate Contract
If you have been financially damaged by the seller’s breach of the purchase contract, suing for money damages could be an option. When the seller acted in good faith and you were not otherwise financially affected, the seller might be liable only for return of the earnest money deposit plus interest and reasonable expenses. A real estate attorney can advise further.
Terminating the Contract and Recovering Your Money
In the event of a breach by the seller, or where you and the seller didn’t actually sign a contract, or where the contract you thought you entered into is actually invalid or unenforceable, you are likely entitled to terminate the contract and recover any payments you made to the property seller. Where both the buyer and seller agree to terminate the agreement, the buyer ordinarily is allowed to recover any purchase money paid.
Demanding Specific Performance From the Seller
If the seller is able but unwilling to perform (that is, to convey the house to you), it might actually be possible for you to bring a legal action for what’s called “specific performance.” A court would order the seller to complete the transaction according to the terms of the contract. Specific performance is not a matter of right.If the sales contract allows the seller an unconditional right to cancel, the buyer will probably not be entitled to specific performance. Specific performance is not often granted. Courts are understandably reluctant to force a homeowner to sell, particularly if the seller now plans to remain in the home (as opposed to a situation where, for example, the seller decided to breach the contract in order to accept a better offer).
Craig Cherney is a trusted client advisor and a sought after real estate lawyer and 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. If you are litigating an easement case, Craig Cherney might be able to help you advance and win your case.