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Seeking Specific Performance – Forcing a Seller to Close on the Sale of a Residence

by | Feb 17, 2023 | Housing, Litigation

By Cameron J. Gartland & Michael J. Gartland

In the event of a breach of a real estate purchase and sale agreement, there are a few legal terms and nuances to know before diving head-first into resolving the issue.

What is specific performance?

Specific performance is a legal remedy awarded to the plaintiff where money damages are deeded inadequate to make the plaintiff whole. From the perspective of one who agrees to purchase a parcel of real estate, a lawsuit for specific performance requests that the court order the seller to close on the sale of the property under the threat of civil contempt proceedings. Specific performance and money damages are not mutually exclusive. Depending on the facts of the case, sometimes only specific performance will be ordered, sometimes only monetary damages will be awarded, and sometimes the two may be ordered together. You may think of specific performance as the outcome a party would have enjoyed had the contract been fulfilled without any hiccups. Specific performance is commonly awarded in real estate cases where the seller refuses to close on the sale of the property.

Property-buying contracts, in general

Virtually all standardized offer to purchase contracts involving real estate require the parties to mediate all disputes thereunder. If the mediation does not result in a settlement, the parties are free to commence a lawsuit. In a recent DLG case, the offer to purchase contract contained clauses requiring the parties to mediate, and if the mediation was unsuccessful, then they had to go to binding arbitration before a single arbitrator. An arbitrator acts like a judge, but has no legal power to enforce any award he or she makes. DLG attorney Michael J. Gartland, representing the buyer of a residence seeking specific performance and money damages for breach, argued that the property was unique to the client, as it suited his personal, familial, and religious needs. The arbitrator agreed, ordered specific performance, and awarded damages in the amount of $15,780. Had the sellers not accepted the arbitrator’s award and agreed to close, DLG’s client would have had to commence a civil action against the sellers in the Jefferson Circuit Court to enforce the arbitrator’s award. Thankfully, the sellers agreed to close on the sale and our client was not required to commence an enforcement action.

Real estate is unique in Kentucky

There are no published opinions in Kentucky that hold that a buyer under a contract to purchase real estate is automatically entitled to the remedy of specific performance if the seller refuses to close. It is likely that the buyer will be entitled to specific performance where the real estate is unique and money damages will not make him or her whole. Just as beauty is in the eye of the beholder, so too is uniqueness in the eye of the buyer. Any one quality about a property can make it unique or special to a buyer if it serves a personal, familial, or religious need, to name just a few.

Mike Gartland of DelCotto Law Group is uniquely qualified to assist you if you are a buyer or seller under a real estate contract and the other party is in breach, or threatening to breach the agreement.

About DelCotto Law Group

DelCotto Law Group is Kentucky’s business preservation law firm known for its commitment to the lifetime success of its clients. DLG serves Kentuckians with complicated financial matters, especially in the areas of bankruptcy and complex litigation. For more information please call (859) 231-5800, email [email protected] or reach us on our contact page.