Buyer has recourse if seller wrongfully refuses to settle

MAILBAG

February 29, 2004

When a seller wrongfully refuses to settle as required by his real estate contract, the buyer has a choice of remedies.

The buyer can sue for monetary damages to recover the money he has lost on the transaction. Or he can sue for specific performance to have a court order the seller to settle for the property and for damages caused by the delay in obtaining performance of the contract.

Which remedy the buyer chooses depends on the circumstances. It often takes months or even years for a specific performance action to be tried in court. A buyer might not be able to wait that long or might want to purchase an alternative property in the meantime. For this reason, lawsuits for specific performance are relatively rare in home sale transactions.

In a lawsuit for monetary damages, a buyer can recover losses that are reasonably caused by the seller's breach of contract. These damages can include the difference, if any, between the fair market value of the property and the contract price, as well as expenses the buyer incurred in anticipation of going through with the purchase.

Expenses paid after the settlement date that are directly caused by the seller's refusal to settle also could be included. These might include loan fees, settlement costs, moving expenses, post-settlement living expenses and similar losses.

Lawyer fees and litigation expenses also can be recovered, but only if they are expressly authorized by the real estate sales agreement.

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