Real Estate Contracts: The Basics
Being a party in a New York real estate contract can be a frustrating place to be because of all the complexities of the law that is involved. It can be even more frustrating if the other party doesn’t perform their contractual duties. Typically, when the buyer signs a residential real estate contract, they provide the contract deposit and the contract to the seller’s attorney. The deposit is then placed into escrow. It will remain there until closing, unless a breach of contract occurs. If the closing doesn’t happen, either the buyer or the seller can demand the contract deposit.
When is a Real Estate Contract Breached?
A breach of a real estate contract can occur when there is a violation of any of the contract terms. The wronged party will be able to recover damages on the basis of whether the breach is a material breach or a minor breach. Although every real estate contract is unique, certain breaches are common among pretty much all real estate deals.
Breaching a Real Estate Contract: Buyer’s Breach
The main task of the buyer is to provide the money to complete the real estate sale. Here are some common breaches that the buyer can commit:
- Not having adequate funds to make a contract deposit, to the extent that the check bounces
- Not tendering the balance of the purchase price
- Purposely defaulting under the real estate contract (for example, withholding documents from the bank, including not providing them with a mortgage commitment letter)
- Not providing accurate and honest warranties and representations
- Not coming to the transaction in good faith, when it concerns preclosing matters
Breaching a Real Estate Contract: Seller’s Breach
Obviously, the seller is expected to do certain things so that ultimately the buyer can take possession of the property. Here are some common breaches that the seller can commit:
- Failure to deliver the deed, or failure to deliver the correct deed
- Failure to deliver the property in a timely manner
- Not remedying the agreed-upon problems with the property before turning the property over
- Not curing defects in the property title
- No providing accurate and honest warranties and representations
Remedies for the Breach of the Real Estate Contract
Liquidated damages are usually the only way that the seller can retain the contract deposit when the buyer breaches the real estate contract. However, if the seller is the breaching party, the buyer can seek remedies including money damages and specific performance, which in this case, would be the forced sale of the property or rescission of the contract. If the buyer and seller can’t reach an agreement about who gets the contract deposit, then they have to take the issue to court or resolve it in mediation or arbitration.
Discuss Breach of Contract with an Experienced New York Real Estate Attorney
If you’re dealing with a real estate contract breach, as either the buyer or seller, you want to be sure that you’re getting the benefit of your bargain. The experienced New York real estate lawyers at MOWk Law are here to help you on your way to resolving your issue. They will help you sort out the details and give you direction on next steps in reaching satisfaction. Contact us immediately to learn more.