Specific Performance: Forcing a California Real Estate Sale to Close

A buyer and a seller sign a purchase agreement. Then the market shifts, a better offer lands on the seller’s desk, or the seller simply wakes up one morning with a change of heart and tries to walk away from the deal. The buyer is left holding a signed contract and watching a purchase they were counting on slip out of reach. In most contract disputes that buyer would be stuck with asking for money. However, in California, there is another option that allows a court to force the seller to proceed with the sale and that remedy is called specific performance. An Irvine, CA commercial litigation lawyer can help buyers, sellers, and businesses enforce contractual rights, resolve real estate disputes, and pursue remedies such as specific performance when appropriate.

Why real estate gets special treatment

In the ordinary breach of contract case, the wronged party collects damages and moves on. Real estate is the classic exception as the laws in California view land as one of a kind.  California Civil Code section 3387 directly addresses this unique nature by presuming that the breach of an agreement to transfer real property cannot be adequately remedied with money alone. The thinking behind it is straightforward. No two parcels are genuinely interchangeable. Location, the improvements on the land, the zoning, the views, and the development potential all differ from one property to the next, so a stack of cash is not a true substitute for the particular property the buyer bargained for.

The statute goes even further for one category of buyer who purchases a single family home as their primary dwelling.  In this instance, the property is conclusively deemed to be unique. In plain terms, the buyer does not have to prove the home was special, and the seller is not allowed to argue that it was not. This gives an owner occupant buyer a particularly strong footing when the seller tries to back out.

What the buyer has to bring to the table

Specific performance is powerful, but it is not handed out automatically. A buyer generally needs a valid, enforceable contract with terms definite enough for a court to enforce. The buyer also has to show that they performed their side of the bargain, or stood ready, willing, and able to perform, which usually means demonstrating they could actually close the transaction and pay the purchase price of the home.  Courts will also look at whether the deal was fair and supported by adequate consideration. A buyer who cannot show they were truly prepared to complete the purchase will have a hard time forcing anyone else to complete it.

It is not only for buyers, and it can travel with damages

Buyers are the ones who reach for specific performance most often, but the remedy also extends to a seller in the right circumstance as well. In addition, a party is not necessarily forced to choose between getting the property or getting paid. It is often possible to pursue specific performance while also asking for damages caused by the delay and the disruption. The right combination depends on the facts and on what the wronged party genuinely wants out of the situation, whether that is the property itself, compensation for the harm, or some measure of both.

Move quickly and carefully

Timing carries real weight in these disputes. A buyer who wants the property should act promptly and should avoid doing anything that looks like accepting the breach and walking away, because that conduct can quietly undercut the claim later. Recording the appropriate notices and filing suit without unnecessary delay can be important for keeping the property from landing in someone else’s hands while the case works its way forward. The faster a buyer moves to protect the deal, the more options tend to stay open. Waiting, on the other hand, has a way of closing them one by one.

Did the other side back out of a signed California real estate contract? Ghassemian Law Group helps buyers and sellers enforce purchase agreements across California. Call us today for a free consultation.