What is a breach of contract in real estate?
What is a breach of contract in real estate? In the United States, real estate contracts in general contain many terms and conditions that are integral to the contract. There is a myriad of contracts in real estate including real estate purchase agreements, lease agreement, real estate assignment contract, power of attorney, listing agreements, buyer agency agreements, land contracts, option agreements, and others. A breach of contract in real estate occurs when a party to the contract fails to perform one or more of the terms of the real estate contract.
Typically, a breach of contract in real estate relates to a breach of contract of real estate purchase agreements. Notwithstanding, real property contracts can also include a breach in residential or commercial property usage or in the rental agreement, breach in the terms of lease (such as allowing subleases), and breaches in land usage and or boundary agreements. We further discuss what is a breach of contract in real estate purchase transactions and how such a breach plays out.
In the United States, in real estate transactions for the purchase of real estate sellers are typically eager to close the real estate acquisition as soon as possible and move on. However, sometimes buyers want to back out of the real estate purchase agreement for a variety of reasons including getting cold feet about the transaction, changing life circumstances that make the transaction problematic or impossible, and others. Similarly, sellers in a real estate transaction can also back out of a transaction because they received a better offer, they get cold feet about the buyer and other reasons.
A real estate purchase agreement is a contract entered into between a buyer and a seller for the purchase of commercial or residential real estate. Real estate purchase agreements are governed by the law of each U.S. state. In the State of Florida, real estate sale and purchases are governed by the Florida real estate and contract law. Under Florida law, the contract for the sale of real estate must be in writing to be legally binding and enforceable. For example, if a buyer and a seller enter into a deal for the purchase of a certain real estate property, they shake hands on the real estate transactions and even agree on the sale price and essential terms and conditions, then they must put all those details into a writing signed by the parties or otherwise the real estate contract will not be enforceable under Florida law. This means that if the buyer decides to back out of the agreement weeks after the handshake or oral agreement for whatever reason and as a result breaches the real estate contract, then the seller has no legal cause of action against the buyer for breach of contract.
A common breach of contract in real estate purchase agreements is when a seller wrongfully refuses to transfer title to the buyer, when the buyer and the seller have defaulted on a purchase agreement or when the buyer or seller fail to close the transaction and perform the contract according to its terms and conditions. Unless otherwise specified in the real estate purchase agreement, the remedies available for breach of contract in real estate purchases include money damages, liquidated damages, specific performance of the contract or termination of contract.
The breach of contract in real estate is complex and it is important to have an experienced attorney formulate a winning strategy to handle a breach of contract in real estate. Contact us, your business attorney in Florida, to help you understand what is a breach of contract in real estate and assist you with your breach of contract case.