When it comes to real estate transactions, it’s common for parties to enter into contracts that outline the terms and conditions of the sale. While these contracts are typically binding and enforceable, there may be situations where one party fails to fulfill their obligations under the contract. In these cases, the non-breaching party may seek specific performance as a remedy.
What is Specific Performance?
Specific performance is a legal remedy that requires a party to fulfill their obligations under a contract. Essentially, it’s a court order that compels the breaching party to perform the specific terms of the contract. In the context of real estate contracts, specific performance may be sought when a party fails to close the transaction as agreed upon in the contract.
Under Florida law, specific performance is an equitable remedy, meaning that it is up to the discretion of the court whether or not to grant it. In order for specific performance to be granted, the following conditions must be met:
The contract must be valid and enforceable: This means that the contract must meet all the requirements of a valid contract under Florida law, such as having a clear offer, acceptance, consideration, and meeting of the minds between the parties.
The terms of the contract must be clear and definite: The terms of the contract must be specific and unambiguous. Vague or uncertain terms may make it difficult to enforce specific performance.
The non-breaching party must have performed their obligations under the contract: The non-breaching party must have fulfilled all their obligations under the contract, or be willing and able to do so.
Money damages must not be an adequate remedy: In other words, the non-breaching party must show that they would suffer irreparable harm if specific performance is not granted, and that monetary damages alone would not adequately compensate them.
When Can Specific Performance be Granted in Real Estate Contracts?
Specific performance may be granted in a variety of situations involving real estate contracts. For example:
Failure to close: If the seller fails to close on the property as agreed upon in the contract, the buyer may seek specific performance to compel the seller to complete the transaction. The reverse normally does not occur because of liquidated damages included in real estate contracts (think, earnest money deposit) that limits the relief that the seller can obtain to just those monies.
Failure to deliver title: If the seller fails to deliver title to the property as required by the contract, the buyer may seek specific performance to compel the seller to transfer the title.
Failure to make repairs: If the seller is required to make repairs to the property before closing and fails to do so, the buyer may seek specific performance to compel the seller to make the repairs.
It’s important to note that specific performance is not always the best remedy in every situation. In some cases, it may be more practical or efficient for the non-breaching party to seek monetary damages instead.
Conclusion
Specific performance is a powerful legal remedy that can be used to enforce real estate contracts in Florida. However, it is not guaranteed and is subject to the discretion of the court. If you are involved in a real estate transaction and are considering seeking specific performance, it’s important to consult with an experienced attorney who can guide you through the process and help you make the best decisions for your situation. If you seek guidance on how to handle an issue that involves a real estate contract and exploring your options, please reach out to attorney John Frazier.
