Specific Performance Demands In Real Estate Transactions

Every so often, real estate transactions can go bad. This often results in one party demanding the other specifically perform pursuant to the real estate contract.

Specific Performance Demands In Real Estate Transactions

Once a seller and buyer agree on a price for a property, a real estate contract is signed. The contract contains provisions each must comply with, provisions that are legally binding. If problems arise during escrow, particularly if things turn nasty, one party may look to legal remedies to force the other party to do something.

Specific performance is a legal demand that a party perform some act. Although the theory can be applied to many situations, it is often seen in real estate transactions. This is because courts have determined that property is unique, and specific performance is often more valuable than monetary damages.

In the case of real estate, specific performance demands often involve the conveyance of title. Having met the conditions of the contract, the buyer demands the seller convey title to them. Why would sellers not do this automatically? Situations can include seller remorse, basic flakiness or the realization the seller accepted far too low an offer compared to what the market would produce.

Specific performance demands are a two sided situation. Courts often are reluctant to grant them because human nature is such that the defendant will often poison a situation by damaging the property or screwing up title. This does not mean the seller is off the hook.

While courts are hesitant to grant specific performance demands, they are not hesitant to enforce real estate contracts. Depending upon the laws in your state, the court may grant something called a lis pendens. The lis pendens represents the equivalent of the monetary damages suffered by the buyer. More importantly, it is recorded against the deed of the seller