Since 1992, David H. Ricks & Associates has been dedicated in providing quality legal services for residents and businesses of Southern California’s Inland Empire. The Inland Empire is filled with individuals, small and medium sized businesses faced with similar legal issues as large businesses, yet they lack the same legal budget and resources as their larger counterparts. Nearly all of those businesses were developed by industrious individuals that know their industries well, but still need legal help to succeed. Lawyers that clearly understand the needs of small businesses can meet those needs and provide quality legal services at a fair price. David H. Ricks & Associates is a California law firm ready to meet the needs of Southern California’s residents and small businesses.
If I have a signed purchase contract, and the seller tries to back out and sell the property to another for a higher price, what rights do I have?
This problem was prevalent in the time period when the property values were skyrocketing. In fact, there was a lot of litigation between buyers and sellers because we were seeing property values rise weekly and sellers were trying to capture the highest price regardless of the consequences to the buyer and his or her family. Right now, we do not see this problem as much because the property values are either sliding or are stable.
So if you find a home you really want and you have entered into a sales contract for the purchase of the property and the seller tries to back out of the sale, the purchaser may specifically enforce the sale of the property. This method of enforcement is through what is called “specific performance.” This is a cause of action that allows a court to equitably enforce your rights against the wrongful seller. In other words, the court can require the sale to take place upon the terms in the sales agreement and escrow instructions.
Not every breach of contract can be specifically enforced because monetary damage can compensate the injured party for the breach. However, with real estate, there is a presumption that real estate is unique. Civil Code sec. 3387, states: “It is to be presumed that the breach of an agreement to transfer real property cannot be adequately relieved by pecuniary compensation. In the case of a single-family dwelling which the party seeking performance intends to occupy, this presumption is conclusive. In all other cases, this presumption is a presumption affecting the burden of proof.” A conclusive presumption means it cannot be disputed.
If a seller tries to break the contract, the buyer, must take immediate action to prevent the seller from selling the property to another purchaser. If the buyer does not act, the property may be sold leaving the buyer with only monetary damages. Promptness is key.
These same rights of specific performance may not be enforceable by the seller. The seller’s rights may only be for damages. Seek immediate legal advice to enforce your rights if your contract was breached.
Contact David H. Ricks & Associates to learn your legal rights under your real estate sales contract. 909-481-0100.