Breach of real estate contract
When one party to a real estate transaction refuses to close and asks to cancel the transaction, people often feel like nothing can be done about it.
Cancellation and Mutual Release (CAMR)
Many times, people will reluctantly sign a Cancellation and Mutual Release (CAMR), which cancels the transaction without either party owing any money to the other party.
However, in most real estate transactions, there are remedies available when one party refuses to close. For example, if a buyer refuses to close a transaction but there is no valid option in the contract to allow the buyer to refuse to close, the buyer’s refusal to close constitutes a breach of contract.
The standard form residential offer to purchase states as follows:
Seller and Buyer each have the legal duty to use good faith and due diligence in completing the terms and conditions of this Offer. A material failure to perform any obligation under this Offer is a default that may subject the defaulting party to liability for damages or other legal remedies. If Buyer defaults, Seller may: Sue for specific performance and request the earnest money as partial payment of the purchase price; or Terminate the Offer and have the option to: (a) request the earnest money as liquidated damages; or (b) sue for actual damages. If Seller defaults, Buyer may: (1) sue for specific performance; or (2) terminate the Offer and request the return of the earnest money, sue for actual damages, or both.
Every situation is unique and is determined by the specific contract and facts involved.
Contact Zimmer & Rens LLC today if you are experiencing this type of situation.
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