Dealing With a Real Estate Contract Breached?

Everyone is part of a real estate transaction at some point in their lives, because everyone will buy, rent, or sell property. Unfortunately, real estate transactions can be incredibly complex and confusing. They become even more difficult when one party to a real estate transaction breaches the real estate contract, meaning that they fail or refuse to perform under the terms of the agreement. In these situations, what can you do? Read on to learn about some common real estate contract breach situations and how our experienced New York real estate attorneys can help you.

How Do Real Estate Contracts Work?

Real estate contracts can be incredibly complicated, which is why it is important to have a skilled real estate attorney help you draft and negotiate your real estate contract. Generally speaking, when a buyer decides to sign a residential real estate contract, they give both the contract and the contract deposit to the seller’s attorney. The deposit is placed into escrow, where it will remain until the sale is closed or until some other event, like a contract breach, occurs. Either the seller or buyer can demand the contract deposit in the event a closing does not occur.

What Are the Different Ways a Real Estate Contract Can be Breached?

While every real estate contract is different, there are some very common ways these kinds of contracts are often breached. It is easiest to think about breaches in terms of who is doing the breaching: the buyer, or the seller.

Common ways that buyer’s breach includes:

  • Not having enough money to make a contract deposit, such that their check bounces
  • Not tendering the balance of the purchase price
  • Purposely defaulting under the contract, such as by withholding documents from the bank so the bank cannot give them a mortgage commitment letter
  • Not providing accurate and honest representations and warranties
  • Not participating in the transaction in good faith in regards to pre-closing matters

Common ways that seller’s breach includes:

  • Not delivering the deed, or not delivering the correct deed
  • Failure to timely deliver the property
  • Not remedying the agreed-upon problems with the property before turning the property over
  • Not curing defects in the property title
  • No providing accurate and honest representations and warranties

What Happens When a Contract is Breached?

If a buyer breaches a contract, the seller is generally only able to retain the contract deposit as liquidated damages. When a seller breaches a contract, the buyer can seek remedies like money damages and specific performance, meaning a forced sale of the property or rescission of the contract. If parties cannot agree who should get the contract deposit, they must litigate the issue in court or take it to arbitration or mediation. This is why it is important to have an experienced real estate attorney who knows local, state, and federal real estate law and is also an experienced litigator.

Dealing With a Real Estate Contract Breach?

At Scaffidi & Associates, we combine our knowledge of real estate law with our passion for skilled, competent courtroom representation to make sure you are protected throughout your real estate experience. If you are dealing with a real estate contract breach, we can help. Contact us today.

Posted in: Real Estate Law


We encourage you to take the time to explore this website as the information provided here will answer many of your questions. We believe that an educated client is our best client. We are also readily available to discuss your case in confidence, whether it’s a matter involving personal injury, medical malpractice, real estate, or other legal challenges. Regardless of the issue you are facing, we are uniquely qualified to provide you with exceptional legal representation and personal service. Call our office or complete the contact form on our website to set up a consultation.