When a Buyer or Seller Fails to Perform
Real estate transactions involve legally binding contracts, and when one party fails to uphold their obligations, it can result in significant financial harm and legal disputes. A breach of a real estate purchase agreement can disrupt transactions, cause delays, and lead to litigation. Whether you are a buyer, seller, or investor, understanding your legal rights is essential in protecting your interests.
Almost all Brokers, realtors, and real estate agents are not licensed attorneys and cannot provide you with legal advice. Brokers, realtors, and real estate agents are financially motivated to close the deal to get paid. Thus, in many transactions, brokers, realtors, and real estate agents have financial motivation to conceal a party’s contractual default to obtain their commission.
Brokers and agents are to always operate in the best interest of their clients, as their clients’ fiduciary. But, the law and the reality often differ. Brokers and agents are in the business of making money. But, without the harsh penalties faced by other recognized fiduciaries, such as attorneys, brokers and agents can often bend the rules to their liking to “get it done”.
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Common Types of Breach in Real Estate Purchase Agreements
Seller Breaches
- Failure to Transfer Title – The seller refuses to close the deal despite a binding agreement.
- Misrepresentation of Property Condition – The seller knowingly conceals material defects that affect the value of the property.
- Failure to Provide Clear Title – Issues with liens, encumbrances, or legal disputes prevent the sale.
- Backing Out Without Cause – The seller wrongfully cancels the contract after accepting an offer.
Buyer Breaches
- Failure to Pay Earnest Money – The buyer does not deposit earnest money as required.
- Failure to Secure Financing – The buyer cannot obtain a mortgage and fails to meet contingency deadlines.
- Backing Out Without Cause – The buyer walks away from the deal without a valid contractual reason.
- Failure to Close on Time – The buyer delays closing, causing financial harm to the seller.
Earnest Money Disputes
- Seller Wrongfully Retains Earnest Money – Holding earnest money when the buyer properly cancels.
- Buyer Wrongfully Demands Refund – Attempting to recover earnest money despite breaching the agreement.
Clarity and Precision
A well-drafted contract must be clear and precise. This means using specific language to describe the rights, responsibilities, and expectations of each party involved. Ambiguities or vague terms can lead to disputes and legal challenges.
Terms and Conditions
The contract should detail all relevant terms and conditions, including payment amounts, deadlines, property descriptions, and any contingencies. It should also specify the consequences of failing to meet these terms.
Legal Requirements
Real estate contracts must comply with state and local laws. In Minnesota, this includes adhering to regulations related to property transactions, disclosure requirements, and contract formalities.
Parties Involved
The contract should clearly identify all parties involved in the transaction. This includes their legal names, roles, and contact information. Proper identification prevents confusion and ensures that all parties are bound by the agreement.
Signatures and Dates
To be enforceable, the contract must be signed by all parties and dated. Signatures indicate that the parties agree to the terms, while dates provide a timeline for when the agreement was made and when obligations are due.
Legal Remedies for Breach of a Real Estate Purchase Agreement
If a party breaches a real estate contract, the non-breaching party has several legal remedies available, including:
- Specific Performance
- A court may require the breaching party to fulfill their contractual obligations (e.g., forcing a seller to transfer title).
- Monetary Damages
- Compensation for financial losses due to the breach, such as lost deposits, additional financing costs, or market fluctuations.
- Rescission
- Canceling the contract and restoring both parties to their original positions before the agreement.
- Liquidated Damages
- Enforcing contract terms that specify pre-determined penalties for breach.
- Injunctive Relief
- Court orders preventing the breaching party from taking actions that harm the non-breaching party’s interests.
Each case is unique, and the appropriate remedy depends on contract terms, the severity of the breach, and financial losses sustained.
How L is For Lawyer Can Help
At L is For Lawyer, we provide aggressive legal representation for real estate contract disputes. Whether you are a buyer, seller, or investor, we fight to protect your rights and recover your losses.
We have successfully handled cases involving:
- Sellers refusing to transfer title after accepting offers
- Buyers defaulting on purchase agreements
- Earnest money disputes
- Fraudulent misrepresentation of property condition
- Title and closing disputes
If you are involved in a breach of a real estate purchase agreement, don’t wait to take legal action. Protect your investment and legal rights today.
Contact Us Today
If you are facing a real estate contract dispute, we can help. Contact L is For Lawyer today for a consultation.
📞 Call 612-500-7777
📧 Email lauren@Lisforlawyer.com
Your real estate transaction deserves legal protection—let’s fight for your rights.
Ensures Compliance
Contracts must comply with legal standards and regulations. Drafting contracts with attention to legal requirements ensures that the agreement is valid and enforceable, reducing the risk of legal challenges.
