You’ve found a property that you’re interested in for living or for rental income. You want to buy it. You agree on a price, sign a purchase agreement, and arrange for the money to purchase the property. Before the close, the seller comes up with a flimsy excuse and backs out of the contract. What are your options?

There are many reasons that sellers back out: primarily, because the market has gone up, and the property is now worth more than the agreed-upon price. Now that the real estate market is in recovery and property values are increasing at a faster pace, the seller breach is once again becoming common. You as the buyer want your agreement honored for the same reason.

Specific Performance is a way to enforce your purchase agreement. Basically, you sue the seller, go to court, and get the judge to force the seller to sell the property to you, just as what would have happened had the seller performed under the purchase agreement.

There are a few hoops to jump through before you can sue for specific performance. Mainly, don’t breach the purchase agreement yourself. In other words, when the seller begins to get antsy and show signs that he or she is not going to follow through, don’t breach your side of the bargain. Even though you can argue that you breached in anticipation of their breach, you have a much easier time proving that you’re ready to purchase the property by following through on your end.

Recovering Lost Income

If the property is investment property, you may recover for the lost rental income you would have received from the closing to the time you win the action for specific performance. The theory being that the court should put you in the exact position you’d be in if the seller performed.

Attorney’s Fees

It is possible to recover attorney’s fees if there is such a provision in the purchase agreement. There is no statutory right to attorney’s fees for a specific performance action. That’s why you can only recover them if they’re in the purchase agreement. Most purchase agreements have an arbitration clause that requires the buyer to first seek arbitration before suing in order to recover attorney’s fees. Be care of this. You must request and attend arbitration before suing. If the seller refuses, then you’ve fulfilled your duty and may sue for specific performance with a request for attorney’s fees.

When Do You to Sue for Specific Performance?

When damages are not adequate. You want specific performance if 1) the property is worth more than the agreed-upon price 2) this is your dream home and no other property will do.

If the deal is just about money, then many times you just want to sue for damages only.

Call my office if you are in this situation and want to know your options. I can be reached by phone or e-mail for a free consultation. (213) 223-2350 or

The above is for informational purposes only and does not constitute legal advice. Please seek advice from counsel.