Buyer’s Remedies to Seller Breaching Agreement to Sell a Property – A Primer From Property Lawyers

While making a property deal, the seller would not usually want to back out of the agreement. However, the seller might change his mind for reasons like getting a better offer from someone else, some circumstances which would deter him from the selling the property, or any other apprehensions that seller might have. The available course of action for the buyer then would be to either claim damages from the seller, terminate the contract and recover the deposit amount with any addition expenses incurred, or to approach the court seeking fulfillment of the purchase agreement.

The buyer should be wary of the fact that despite the legal remedies mention above, the seller may have included some contingency clause in the agreement which would allow him to get out of the contract without incurring any penalties, for example, if the contract has a provision for the seller to back out in case he cannot find another house to reside in despite making a genuine attempt for the same, taking legal action against the buyer in such scenario would most likely amount to very little.

Claim Damages

The buyer could claim damages if the seller willfully breached the contract and it resulted in a financial loss for the buyer. Even if there is no additional financial loss to the buyer, and the breach of contract by the seller was despite his best and sincere intentions, the buyer should in all likelihood be able to recover the deposit amount with interest and any additional expenditure like fee for the real estate lawyer, or the cost of the conducted survey of the premises, from the seller. Damages could be more if it is found that the seller backed out due to insincerity, for example, the seller may have received a better offer for the same property. Amount of the claim would depend upon the additional financial loss incurred upon the buyer.

Termination of Contract

The buyer can have the contract terminated and reclaim the deposited money from the seller in scenarios where either the contract was invalid or not signed by both parties, or if the seller breached the contract. The deposited amount can usually be successfully claimed by the buyer even if there is no-refund clause in the contract.

Have the Contract Fulfilled Through a Court Order

The seller can approach the court to have the seller ordered to complete the deal. This is an option mostly in cases where the seller can, but is not willing to sell the property. Also, the buyer must be able to fulfill his end of the agreement and the contract should list very clearly, without any ambiguity, all the necessary details like amount of down payment, earnest money, legal description of the property and any other property on it which is included with it, details of financing, terms and conditions, etc. If the court finds out that the seller is doing is defaulting on the purchase agreement for his personal gains, there is a good possibility of the court ordering fulfillment of the contract resulting in the completion of the deal.

If you find yourself in such a situation, your primary considerations should be whether the seller’s actions breached the agreement to sell and how can you get the physical possession of the property or at least your money back. It is always advisable to get in touch with a property lawyer or a law firm that can safeguard your interests against such an defaulting seller.

This article is for information purposes only for people looking to purchase or sell real estate and should not be construed as legal advice. If you are looking for legal advice, you may contact ADB & Partners.