Can a real estate seller demand performance from a defaulting buyer? – Florida law says YES

Bernhard Law FirmIn a fluctuating real estate market like Miami, buyers often back out of their property purchases, sometimes just days before closing. Many of these defaulting buyers provide no explanation, refuse to answer requests to close or mediate, and provide no reasonable excuses. Many do not exercise any contractual cancellation, even when an attorney represents them throughout the transaction. The sellers cannot resell or extricate themselves from title to the property and its attendant responsibilities. For many foreign investors, this creates a significant burden to manage from abroad. Under these circumstances, nearly every real estate purchase and sale contract provides an equitable remedy of specific performance. In other words, the contract requires the buyer to go through the purchase and take title to the property.

This article provides a primer to a seller’s right to require specific performance from the buyer. If you have any questions about real estate purchase and sale contracts, breaches and defaults by buyer or seller, and filing a lawsuit thereon, please contact Bernhard Law Firm at www.bernhardlawfirm.com, abernhard@bernhardlawfirm.com, 786-871-3349.

Specific performance requires a party to perform under the contract

The purpose of specific performance is “to compel a party to do what it agreed to do pursuant to a contract.” Free v. Free, 936 So. 2d 699, 704 (Fla. 5th DCA 2006). The decision whether to decree specific performance of a real estate contract is a matter that lies within the sound judicial discretion of the Court, and it will not be disturbed on appeal unless it is clearly erroneous. Mondy v. Sanchez, 972 So. 2d 1032, 1033 (Fla. 3d DCA 2008) (aff’ing specific performance judgment on real estate purchase contract, on holding that party’s affidavits were sufficient evidence despite their gain if the transaction closed). However, public policy favors enforcement of contracts, and it is the function of the Court to give effect to and enforce the contract as it is written. See Sanislo v. Give Kids the World, Inc., 157 So. 3d 256, 260 (Fla. 2015) (holding that because of policy that favors the enforcement of contracts, as a general proposition, unambiguous contracts are enforceable unless they contravene public policy); U.S. Fire Inc. Co. v. Morejon, 338 So. 223, 225 (Fla. 3d DCA 1976) (“it is the function of the court to give effect to and enforce the contract as it is written.”); see also Kurchner v. State Farm Fire and Cas. Co., 858 So. 2d 1220, 1221 (Fla. 3d DCA 2003) (“the rules of construction mandate that the [contract] as written be given its full force and effect.”).

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By Rufino – hermandad – friendship, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=7783936

Generally, the Court should order specific performance if the contract is definite and legally binding, its enforcement is practical and equitable, and the Court believes that justice requires it. L’Engle v. Overstreet, 55 So. 381 n.1 (Fla. 1911); Invego Auto Parts, Inc. v. Rodriguez, 34 So. 3d 103, 104 (Fla. 3d DCA 2010) (reversing denial of specific performance of a real estate sale contract when plaintiff made this showing); Castigliano v. O’Connor, 911 So. 2d 145, 148 (Fla. 3d DCA 2005); Pariz v. Colon, 77 So. 3d 721, 721 (Fla. 3d DCA 2011) (holding a court in equity can award specific performance to order transfer of title to property).

Inadequate remedy at law is presumed and the plaintiff need not show it to enforce real property agreements. See, e.g., Jack Eckerd Corp. v. 17070 Collins Avenue Shopping Ctr., Ltd., 563 So. 2d 103, 105 (Fla. 3d DCA 1990) (holding plaintiff need not show irreparable harm to enforce real property contractual covenants); Sterling Crest, Ltd. v. Blue Rock Partners Realty Group, LLC, 164 So. 3d 1273, 1278 (Fla. 5th DCA 2015) (presuming irreparable harm to enforce contracts for sale of real property); Planned Parenthood of Greater Orlando v. MMB Properties, 171 So. 3d 125, 131 (Fla. 5th DCA 2015) (holding irreparable harm not required to enforce contracts relating to real property); Autozone Stores, Inc. v. Northeast Plaza Venture, LLC, 934 So. 2d 670, 673 (Fla. 2d DCA 2006) (holding tenant would not have to show irreparable harm to enforce lease); Henry v. Ecker, 415 So. 2d 137, 140 (Fla. 5th DCA 1982) (presuming irreparable harm to enforce contracts for sale of real property).

A seller can use specific performance to require a buyer to transfer money to escrow and take title

Florida appellate courts have long recognized a seller’s right to enforce a real estate sale contract through specific performance, and regularly uphold specific performance judgments in favor of sellers, requiring buyers to perform their obligations to perform the purchase, transfer purchase funds, and take title to real property. See, e.g., Ge Lin v. Ecclestone Signature Homes of Palm Beach, LLC, 59 So. 3d 267, 271 (Fla. 4th DCA 2011) (aff’ing judgment in favor of seller, granting specific performance on finding that buyer had breached real estate sale contract, and holding that the seller was entitled to enforce the contract by a judgment of specific performance); Pakalski v. CFC Pasadena Golf, LLC, 42 So. 3d 869, 870–71 (Fla. 2d DCA 2010) (reversing dismissal of seller’s specific performance action against buyer, as seller’s retention of buyer’s deposit did not forego the seller’s right to enforce the contract by suing for specific performance); Sandpiper Dev. and Const., Inc. v. Rosemary Beach Land Co., 907 So. 2d 684, 687 (Fla. 1st DCA 2005) (aff’ing summary judgment of specific performance in favor of seller against buyer, requiring buyer to perform purchase and accept title); Bilow v. Benoit, 519 So. 2d 1114, 1117–18 (Fla. 1st DCA 1988) (reversing denial of seller’s specific performance claim on contract for sale of real property, as seller’s use of deposit monies was insufficient to support finding that she elected to accept deposit as liquidated damages and forego right to seek specific performance); Williams v. Noel, 105 So. 2d 901, 904 (Fla. 3d DCA 1958) (aff’ing judgment of specific performance in favor of sellers, requiring buyers to purchase the property); Clements v. Leonard, 70 So. 2d 840, 842 (Fla. 1954) (holding remedy of specific performance on realty sale contract is mutual; where sought by the seller, the fact that relief sought is only to enforce payment of specific sum of money makes no difference); Booth v. Bobbitt, 94 Fla. 704, 708 (Fla. 1927) (holding in seller’s action for specific performance on real estate purchase contract, the tender of the deed may be conditioned on payment of purchase price by the buyer).

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By Angélica Martínez – Monterrey Institute of Technology and Higher Education, Mexico City, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=26395042

Thus, when a seller wants to force the buyer to perform, it must make an equitable showing for specific performance in court. The seller should show that it has an enforceable written contract with a buyer for purchase and sale of real property with specific performance remedies upon default. The seller should show that the buyer did not exercise the contractual right to cancel the purchase and has the financial means to perform. The seller should also show that it tendered its end of the bargain, properly requested to close or mediate as contractually required, and has lost other opportunities to sell and cannot extricate from title and the responsibilities therewith. Under these circumstances, the Court should require performance. The Court should not reward the buyer’s unreasonable refusal to keep his or her word and perform as agreed. Such unreasonable acts excuse the seller’s tender of title until the buyer transfers the purchase price into escrow. See Regents Park Investments, LLC v. Bankers Lending Servs., Inc., 197 So. 3d 617, 621 (Fla. 3d DCA 2016) (holding plaintiff makes a required showing for specific performance under these elements and can be excused from ultimate tender until the opposing party performs).

In sum, Florida law, equity, justice, and public policy generally require that a buyer perform a contract as written and agreed, transfer the purchase price to escrow, close the sale, and take title and responsibility for the property—the remedy of specific performance. If you have any questions about real estate purchase and sale contracts, breaches and defaults by buyer or seller, and filing a lawsuit thereon, please contact Bernhard Law Firm at www.bernhardlawfirm.com, abernhard@bernhardlawfirm.com, 786-871-3349.

Bernhard Law Firm

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