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Specific Performance

What happens when one party to a purchase agreement fails to honor their obligations under the contract? In real estate, the aggrieved party can go to court and seek a court award for specific performance, which compels the offending party to perform under the contract. Specific performance is a specialized legal remedy used and awarded by courts when monetary damages will not adequately compensate the aggrieved party. The thought is that real estate, by its very nature, is unique, and monetary damages are very difficult to assess. Instead of money, the aggrieved party wants the actual performance of the contract. Therefore, the court’s only remedy is to compel compliance under the contract.

For a court to award specific performance, several legal elements must be met. They are:

First, there must be a valid and binding contract. Without this, there is no breach leading to a need for a remedy.

Second, specific performance is only available when monetary damages would be inadequate compensation. When specific performance is ordered, monetary damages are not usually ordered as both remedies are not usually entitled together.

Third, mutuality of an obligation is required. This means that both parties have undertaken duties to one another as part of the contract.

Finally, the moving party must have substantially performed their part of the contract, and that they can continue to perform their duties.

Real estate transactions alone can be very stressful. When another party stops upholding their end of the bargain, you only worry more. Don’t let this get the best of you, stay calm, and ask an experienced real estate attorney for the best way to move forward and see if specific performance may be an option for you. Soble law has a team of dedicated real estate attorneys who will advocate for your legal and real estate rights.

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Some Helpful Advice on Specific Performance

Specific Performance

Frequently Asked Questions

Top Specific Performance Questions

Whether it‘s residential or commerical real estate, our team can offer you assistance in understanding remedies available to you if the other party involved in your transaction has breached your contract. We can also provide representation to those who have been accused of breaching a contract and causing damages to occur. Contact us today!

Can I sue the seller for not showing up and then delaying the closing by a week?

No. Based upon your statement, if the seller is intending to close, there will be no reason to escalate this into a lawsuit…yet. If everything is still in place, such as your loan and rate approval, then the one week delay is sufficient for a closing. Real estate sales in general can be frustrating and delays are part of the process. So based upon your current situation, it does not appear to be an ‘actionable’ legal issue. However, if the seller continues to delay beyond an additional week as represented, you may want to then seek counsel to compel the sale.

Can I sue the buyer for money that I spent on a deposits when they ended up withdrawing the purchase agreement?

That will depend on how the buyer withdrew. If the provisions of the purchase offer had contingencies to the sale, and the buyer withdrew in accordance with the contract, then the answer is “no.” However, expenses incurred when performing obligations on a contract are recoverable if there is a breach by the other party. When it comes to specific performance however, there are no monetary damages awarded. The court is compelling the sale of the home. That is the only remedy. So if you are looking for monetary damages, the lawsuit takes a different format and requests monetary damages only, such as your lost deposits, loan application and appraisal fees, and other reasonably related items.

I learned this week that the seller's husband is not mentally competent to sign the closing papers, so their realtor is going to have his son obtain a power of attorney to close. Does this open me up to issues?

If the seller is not competent to sign closing documents, he certainly cannot make his son his power of attorney at this point. Instead, the family needs to file for a conservatorship and have the court appoint the son as a conservator. A conservator is legally authorized to manage an incapacitated person’s financial affairs. This would include the sale or mortgage of a home. While this may delay the closing, doing anything less than this may open the transaction up to legal challenges at a later date. 

Articles on Specific Performance

A Specific Power of Attorney: What Happens When Someone is Not Competent To Sign Real Estate Documents

  Lisa, a realtor from Livonia, Michigan asks,  “my seller's husband needs to sign papers to close the home. However, he is not lucid. Their realtor said she will get him to sign a power of attorney to his son. Is this right or even legal? Attorney in Fact First,...

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