Real Estate Purchase Agreement Disputes

Most states have a statute of frauds requiring contracts for the sale of real property to be agreed upon in writing. This is usually done by negotiating a purchase and sales (P&S) agreement that finalizes the terms and conditions of the sale.

Real estate purchase agreement disputes often arise after both parties have signed the P&S agreement, but before the transaction has been completed. Additionally, many real estate P&S agreements contain provisions laying out conditions that must be met for the sale to close, closing procedures, and other details that may be unrelated to the property. Common purchase agreement provisions include:

• A requirement that the building pass inspection and other measures to ensure the property is in satisfactory condition and there are not issues with the title;
• A precise description of the property, including improvements, fixtures, or easements included in the sale;
• The type of deed that will be delivered at closing;
• Any seller representations as to the condition of the property, or whether it is being sold “as is;”
• A breakdown of how the purchase price will be allocated between real property, equipment, and any other property that is transferred;
• Whether the sale is contingent upon the buyer securing financing;
• Escrow instructions; and
• Which party will bear the risk of losses that occur prior to closing.

Either party will be considered to have breached the contract by failing to follow its terms and conditions. If the buyer breaches the P&S agreement, the seller usually has three available remedies:

• Keeping the earnest money deposit;
• Suing for specific performance and damages; and
• Bringing a lawsuit for damages and other losses as a result of the breach

One of the most common reasons for a seller to breach a P&S agreement is due to the belief that another buyer is willing to pay more for the property. Thus, many breach actions against the seller seek specific performance of the contract as well as damages.

The attorneys at Thomas H. Curran Associates have extensive experience with commercial real estate, including negotiating and drafting P&S agreements. Our attorneys ensure that clients’ interests are fully protected and that they have a complete understanding of the details of any agreement they sign. If there is a dispute over the contract, our lawyers will help clients successfully navigate any dispute resolution procedures that may be laid out in the agreement or successfully pursue litigation that ensures their interests are protected.