Since no two pieces of real estate are identical, it can often be difficult to find a comparable property if a party backs out of a deal. In these situations, monetary damages may not be sufficient to compensate the party who was harmed by the other party’s breach. Specific performance can be a strong legal remedy to compel the breaching party to act — and ensure the terms of the contract are fulfilled.
What is Specific Performance?
Specific performance is a legal remedy that compels a party to satisfy their obligations under a contract, rather than simply pay damages. It can be a viable option in cases where a property is unique and the actual amount of financial harm is unclear. This is often the case with historic homes, parcels of land with specific features, and real estate with distinct characteristics.
When is the Remedy of Specific Performance Available in Real Estate Matters?
There can be many reasons a seller or buyer could breach a commercial or residential real estate contract. A seller may have gotten a significantly higher offer after the contract was signed. A buyer might breach if their deal to buy a new property fell through. Specific performance forces the breaching party to complete the bargained-for transaction.
A plaintiff pursuing the remedy of specific performance must be able to demonstrate the following:
- There is a valid contract in place with clear and certain terms
- They have performed their contractual obligations and are ready, willing, and able to perform any remaining obligations
- It is within the defendant’s power to perform
- A monetary award is an inadequate remedy
When is Specific Performance Not an Appropriate Remedy?
Specific performance may be a good option if you are involved in a real estate dispute and want to force the sale of a unique property. If a seller refuses to close and the buyer is ready to perform — or a buyer backs out after all closing requirements have been met — specific performance may be the only way the injured party can get the property they bargained for. However, there may be situations where specific performance is not the best remedy.
While real estate litigation can be lengthy, a negotiated settlement for monetary damages may be more practical if your objective is a swift resolution. In addition, if you haven’t fully satisfied your own obligations under the contract, the court may deny the remedy of specific performance based on your own lack of performance. Specific performance may also not be available if the property is sold, encumbered by liens, or would otherwise be impossible to sell.
It’s also important to consider the emotional toll and legal costs that may be associated with pursuing the remedy of specific performance. If the stress or cost of litigation would be greater than the value of the property, it may be better to settle for monetary damages.
Contact an Experienced New York Real Estate Attorney
If you are facing a real estate dispute, a knowledgeable attorney can advise you whether specific performance is the best course of action in your case. At Barnes & Barnes, P.C., we are committed to helping business owners with a wide range of commercial and residential real estate disputes. Contact us at (516) 673-0674 to schedule a consultation.
