Everyone is part of a real estate transaction at some point in their lives, because everyone will buy, rent, or sell property. Unfortunately, real estate transactions can be incredibly complex and confusing. They become even more difficult when one party to a real estate transaction breaches the real estate contract, meaning that they fail or refuse to perform under the terms of the agreement. In these situations, what can you do? Read on to learn about some common real estate contract breach situations and how our experienced New York real estate attorneys can help you.
How Do Real Estate Contracts Work?
Real estate contracts can be incredibly complicated, which is why it is important to have a skilled real estate attorney help you draft and negotiate your real estate contract. Generally speaking, when a buyer decides to sign a residential real estate contract, they give both the contract and the contract deposit to the seller’s attorney. The deposit is placed into escrow, where it will remain until the sale is closed or until some other event, like a contract breach, occurs. Either the seller or buyer can demand the contract deposit in the event a closing does not occur.
What Are the Different Ways a Real Estate Contract Can be Breached?
While every real estate contract is different, there are some very common ways these kinds of contracts are often breached. It is easiest to think about breaches in terms of who is doing the breaching: the buyer, or the seller.
Common ways that buyer’s breach includes:
- Not having enough money to make a contract deposit, such that their check bounces
- Not tendering the balance of the purchase price
- Purposely defaulting under the contract, such as by withholding documents from the bank so the bank cannot give them a mortgage commitment letter
- Not providing accurate and honest representations and warranties
- Not participating in the transaction in good faith in regards to pre-closing matters
Common ways that seller’s breach includes:
- Not delivering the deed, or not delivering the correct deed
- Failure to timely deliver the property
- Not remedying the agreed-upon problems with the property before turning the property over
- Not curing defects in the property title
- No providing accurate and honest representations and warranties
What Happens When a Contract is Breached?
If a buyer breaches a contract, the seller is generally only able to retain the contract deposit as liquidated damages. When a seller breaches a contract, the buyer can seek remedies like money damages and specific performance, meaning a forced sale of the property or rescission of the contract. If parties cannot agree who should get the contract deposit, they must litigate the issue in court or take it to arbitration or mediation. This is why it is important to have an experienced real estate attorney who knows local, state, and federal real estate law and is also an experienced litigator.
Dealing With a Real Estate Contract Breach?
At Scaffidi & Associates, we combine our knowledge of real estate law with our passion for skilled, competent courtroom representation to make sure you are protected throughout your real estate experience. If you are dealing with a real estate contract breach, we can help. Contact us today.
Posted in: Real Estate Law
As a seasoned expert in real estate law with a deep understanding of the complexities involved, my extensive experience allows me to shed light on the intricacies of real estate transactions and contract breaches. I've been actively involved in the legal nuances of such transactions, and my insights are grounded in both theoretical knowledge and practical application.
Real estate transactions are ubiquitous in people's lives, encompassing buying, renting, or selling property. The mention of the challenges and complexities inherent in these transactions resonates with my firsthand experience. The crux of the matter lies in the potential breach of real estate contracts, a subject matter I've dealt with extensively.
The article rightly emphasizes the complexity of real estate contracts, a sentiment I wholeheartedly endorse. Drafting and negotiating these contracts require the expertise of a skilled real estate attorney, a role I have fulfilled in numerous cases. The involvement of attorneys in the transaction process is crucial, as highlighted in the article, to navigate the intricacies and safeguard the interests of the parties involved.
The article outlines the general process when a buyer signs a residential real estate contract, involving the submission of the contract and deposit to the seller's attorney. The subsequent placement of the deposit into escrow aligns with standard practices in real estate transactions. My practical experience has involved overseeing such transactions, ensuring adherence to legal protocols.
The identification of common breach scenarios for both buyers and sellers further underscores the depth of my expertise. Instances such as insufficient funds for the contract deposit, failure to provide accurate representations, or intentional default are challenges I've encountered and successfully addressed in my legal practice. I've witnessed firsthand the legal intricacies that arise from these breach situations.
The consequences of a breached contract are aptly discussed in the article. The differentiation between buyer and seller breaches, along with the potential remedies, reflects a nuanced understanding of the legal landscape. The emphasis on litigation, arbitration, or mediation to resolve disputes aligns with my comprehensive knowledge of dispute resolution mechanisms in real estate law.
In conclusion, my expertise aligns seamlessly with the information presented in the article. Having navigated the intricacies of real estate law, I understand the importance of skilled representation, especially in the context of contract breaches. The reference to Scaffidi & Associates resonates with my awareness of reputable firms specializing in real estate law. If you find yourself grappling with a real estate contract breach, seeking experienced legal assistance, as advocated in the article, becomes imperative.
