What does “specific performance” mean in a real estate lawsuit?

On Behalf of | Apr 1, 2022 | Real Estate Disputes

Most people who have purchased a home or two over the years have learned not to exhale and assume the deal is done until the closing takes place and they have the keys. Any number of things can go awry until the last minute – and sometimes later.

While it doesn’t happen regularly, sometimes sellers try to back out of the deal after the agreement has been signed and all that’s left is the closing. Sometimes the job they were moving to take disappears. Other times, a serious health or other family issue requires them to stay put.

Can sellers back out of the agreement after it’s signed?

Unless a buyer has agreed to a contingency in the purchase-sale agreement that allows the seller to cancel the agreement for specified reasons (and seller contingencies are rare), they can’t fail to honor the agreement without paying a fair monetary penalty.

If that’s the case, you can likely decide to hold the seller to the terms of the agreement. You may be able to seek additional compensation if needed to cover your costs, including the costs of delaying or backing out of your current home’s sale as well as additional damages for the stress and inconvenience of having to start pursuing other homes.

When money won’t make things right

But what if what you really want is that home you’ve just purchased? Maybe no amount of compensation (or at least any amount you could reasonably receive) will make up for losing that home. If that’s how you feel about it, you may be able to hold the seller responsible for what is called “specific performance.”

Specific performance isn’t a common remedy in lawsuits. It can be used, however, when the subject of the contract is something rare and unique that compensation won’t allow you to replace. It’s commonly used when someone purchases a valuable work of art or other one-of-a-kind item. One example might be if that home you’ve purchased is completely outfitted for wheelchair accessibility, and you or a family member requires that.

If you’re facing a situation where a home seller has changed their mind as you’re nearing the end of the process, it’s wise to seek legal guidance to review your contract and help determine the best course of action for you and your family.