The basis of any real estate transaction is the contract, which binds both the buyer and seller and outlines their obligations. When one side decides to break the contract, they have committed a breach, and a lawsuit might be unavoidable.

After the breach of real estate contract, you need competent legal advice about your options. Contact a Dallas real estate dispute attorney as soon as possible.

Terms in a Real Estate Contract that Are Breached

A real estate contract includes all the essential terms of agreement between the parties. A real estate contract should be in writing, otherwise it will violate the Statute of Frauds. By reducing a contract to writing, each side understands its obligations, so there should be no confusion about what each side needs to do.

Real estate contracts contain many of the same terms, including:

  • The property’s address
  • The purchase price for the property
  • The amount of a good-faith deposit
  • How the buyer will purchase the property
  • The closing date when the purchase will be completed
  • What is included in the sale, such as fixtures, furniture, or other items
  • What is excluded from the sale (i.e., what he buyers will take with them)
  • How property taxes will be allocated between buyer and seller

Contingencies in Real Estate Contracts

Sometimes, a sale is contingent on an event happening. For example, the buyer might be trying to sell their home at the same time. If they cannot sell it, then they cannot afford to buy the house, so the sale will have to fall through.

Likewise, a buyer might need to secure a mortgage so that they can afford the house. Without the mortgage, they are not in a position to buy the home.

These are contingencies, and a valid real estate contract should contain multiple contingencies. When a contingency is not met, either the buyer or seller can provide notice that they are dropping out of the transaction. This is not a breach.

Common Ways a Contract is Breached

As experienced real estate attorneys, we have seen all kinds of breaches, including:

  • Refusing to pay on time
  • Failing to deliver the deed in a timely manner
  • Selling a home without the items specified in the contract
  • Backing out of the contract for no legitimate reason

Some buyers or sellers get cold feet and try to back out, even if the contract does not allow them to do so. The result is a breach, and the non-breaching party should consider what remedies are available.

Suing for Breach of Contract Real Estate

The purpose of a lawsuit is to remedy the breach. There are some common remedies, which will depend on who breaches—the buyer or the seller:

  • If the seller breaches, then the buyer can sue for compensation, return of their good-faith deposit, and reasonable expenses. The buyer can also request that the contract be terminated.
  • If the buyer breaches, then the seller can often terminate the contract and sue for money damages. For example, the seller might ultimately sell the home but for less than the amount included in the breached contract. The seller can sue to make up the difference.

One remedy that doesn’t receive a lot of attention is specific performance. This refers to forcing the other side to go ahead with the sale and transfer of the property even when they don’t want to. In many cases, the seller tries to back out of the contract and the buyer wants to force the sale.

Texas law allows for specific performance, but parties need to meet certain requirements, which usually require the help of an experienced attorney.

Contact Khirallah PLLC for Your Real Estate Disputes

If you have a question about the breach of a real estate contract, please contact us today. We are an established real estate law firm with a long list of satisfied clients. To learn more about your options, contact us by calling 214-302-0462 for a free consultation.

Author Photo

Rachel Khirallah

Rachel E. Khirallah is the founder of Khirallah, PLLC. She was admitted to the Texas Bar and U.S. District Court, Northern District of Texas in 2005 after graduating from Texas Tech University School of Law, and admitted to the U.S District Court, Eastern District of Texas in 2006.

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