If you’re in the market to buy or sell property, it’s important to understand this legal concept, especially what a specific performance in real estate is.
This can also apply if you’re a tenant who wants out of your lease or an employer who needs his employee to fulfill an agreement with you.
Specific performance is generally used in situations where monetary damages don’t provide enough incentive for one party to follow through on his end of the contract, so he must be compelled by the court to follow through, or else risk fines or other repercussions.
Now, here’s how to get specific performance in real estate if you can show that the other party violated the contract. You’re going to want to give them notice of your intention to seek specific performance and tell them what they need to do to cure the problem.
That will give them an opportunity to fix it without going through the courts, which is why they signed it in the first place.
What Is Specific Performance In Real Estate?
There are several ways to settle a contract dispute, but some types of disputes require a particular kind of action. In real estate, if one party doesn’t perform as promised, either party can request that a judge order specific performance.
Specific performance means that if your former landlord still hasn’t returned your security deposit after you move out, you can petition a court to order him or her to do so.
Specific performance can also be ordered when one party has breached a contract by not performing as promised. For example, if you and your landlord signed a lease agreement that specified he would paint your apartment before you moved in, but he never did, you could petition for specific performance to get him to perform his duties.
What Is the Specific Performance of Contract?
A Specific Performance of contract is a contract where the court orders you to do something, rather than pay money. In contract law, a judge may order one party to perform their contractual obligations instead of paying damages if: (1) damages would be inadequate compensation for the breach; and (2) it would be inequitable for a party to receive damages.
How Does Specific Performance Work?
This is an overview of the civil specific performance process:
- In order for a court case to start, one party in the dispute needs to have a written contract and that needs to have a specific performance clause.
- In this case, if the judge agrees that the claim should be upheld, he or she considers all the circumstances, determining that an order of specific performance is the best way to remedy the situation for the plaintiff.
- The judge orders the respondent to return or give back the property to the claimant.
Requirements for Specific Performance
- Several conditions must be completed for a court to grant a particular performance as a remedy:
- There must be a legally binding contract in existence.
- The monetary damages must be insufficient.
- Mutual responsibility must exist, implying that both parties owed each other duties under the contract.
- The damaged party must demonstrate that they have fulfilled their contractual obligations and can continue to do so.
Advantages of Specific Performance
Below are some of the advantages of Specific Performance in Real Estate
- Specific Performance will ensure that your rights are protected, and you will get what you deserve.
- Specific Performance also protects you from future problems with your property or business.
- Specific Performance ensures that you will get paid for your work, and you won’t have to go through a long and expensive court case.
- Specific Performance can be used for any type of contract dispute.
- Specific Performance allows you to make sure that your property or business stays protected from other parties.
Disadvantages of Specific Performance
Just like everything else, Specific performance has its own disadvantages as well as its advantages. Below are some of the disadvantages of specific performance in real estate.
- Specific Performance can be very expensive for both parties. The reason is that if a court orders a party to pay money, it does not have to be paid immediately. However, if a court orders someone to perform an act (such as building something), then that person must do so immediately. This means that monetary damages are often cheaper than specific performance since they don’t require immediate action by one of the parties.
- Specific Performance can also be very time-consuming and difficult for courts to manage.
- Specific Performance can also be very risky for a court to order.
- Specific Performance can also be very unfair for one party or another.
How Long Does Specific Performance Lawsuits Take?
The length of time from filing to trial can vary greatly depending on a number of factors. The most important factor in how long it takes to get through a specific performance lawsuit will be whether or not your contract includes an arbitration clause or forum selection clause.
If you have one of these, then it’s possible that a trial won’t happen until after arbitration, which could mean another year or more before resolution.
Specific Performance Equitable Remedy
When a contract cannot be carried out due to circumstances beyond an individual’s control, courts can force someone to fulfill their promise through a remedy called specific performance.
Specific performance is not usually available if there are readily available substitutes that provide comparable economic value.
In such cases, damages are generally awarded as compensation instead of enforcement of fulfillment of the contract.
Specific Performance Example
This article will be demonstrating some of the more common instances in which a court might order a specific performance.
1. Real Estate
In the event that the seller of beachfront property in Florida reneges on the contract, violating the court may make him perform by demanding he complete the transaction with the buyer.
For example, even if the seller pays money in return for the property instead of the property, the court may decide that the only suitable resolution is that the seller honors the contract and hands over the land to the buyer.
2. Personal Property
Because the property up for sale in some circumstances comprises custom-made products, limited-supply goods, and art artifacts, particular performance lawsuits are frequently filed.
If a buyer and seller agree to a contract for the purchase of the seller’s original Pablo Picasso but the seller backs out and instead gives a less valuable Henri Matisse, the court may rely on specific performance and order the seller to give the buyer the Picasso as per the contract.
An order, decree, or judgment for specific performance is an order requiring a party to perform on an existing contract.
In some jurisdictions, a plaintiff may also be granted damages as part of their judgment if they can show that they suffered loss or harm as a result of one party’s breach.
The key point to remember about these cases is that they are filed when a person has been harmed because of another person’s failure to uphold his or her obligations under a contract.