The most common contractual dispute that arises in a real estate transaction is the “collapsing deal”. This is when one party to the contract, either the seller or the buyer, refuses to complete the deal.
A breach of contract by the seller typically occurs when the seller no longer wishes to sell their property despite entering into a contract to do so. On the other hand, a breach by the buyer typically occurs when they are unable to complete due to having insufficient funds or they have found a more desirable property.
A seller that fails to complete a real estate transaction can, in certain situations be forced to seller their property by the Court and in other instances be entitled to retain their property but remain liable to the buyer for potential significant monetary damages.
A buyer that fails to complete will likely lose their deposit and potentially also be liable to the seller for monetary damages if the seller is not able to sell their property for the same amount.
Our experienced real estate team has assisted clients on both sides of contractual disputes with court litigation and also successfully reached fair resolutions through negotiation. without the need to commence a court action.
Contractual disputes can also arise after the real estate transaction completes where one of the parties acts contrary to their contractual obligations. A buyer is entitled to receive the property as they viewed it on a particular date with the items included as per the contract. For instance, a seller may remove the hot tub you thought came with the property or you move in to find the residence in an unclean state. There are remedies available for parties in these types of situations.
Call us today if you’ve been a party to a contractual dispute or if you are a realtor involved in a collapsing deal and have questions about what happens to your commission, or your client has breached the listing agreement.