Specific performance can be an available remedy to sellers in real estate transactions, but it is rare for a seller to be granted specific performance. Specific performance is only awarded by a court if money damages are an inadequate remedy.
Specific performance defined – Specific performance is an equitable remedy that can be ordered by a court when a contract is breached. Specific performance forces the breaching party to perform their contractual obligations.
Specific performance availability to seller – Whether specific performance is an available remedy to a seller depends on the real estate contract. The contract typically specifies the type of remedy available to a seller in the event of a breach. For instance, the buyer’s escrow deposit as liquidated damages is often the exclusive remedy available to the seller in many real estate contracts.
If specific performance is an available remedy to a seller pursuant to the contract, then the seller would next need to prove that seller performed seller’s contractual obligations and buyer failed to perform buyer’s contractual obligations.
Even if specific performance is an available remedy to a seller, a court can determine that money damages are adequate to compensate the seller. Thus, the court would not force the sale of the property and instead order the buyer to pay the seller money damages.
How might specific performance awarded to a seller look? – If a seller is awarded specific performance, the court could order that the buyer make payment pursuant to the contract. If the buyer fails to make the payment, then the court could order for the property to be sold at a judicial sale and pay the proceeds to the seller. If the selling price at the judicial sale was less than the contract price, then the court could order that the initial buyer pay the seller the difference. Seller could also seek additional damages that flow from the initial buyer’s breach, such as, utilities, taxes, and other carrying costs paid by the seller after the closing date.