Real estate contracts lay out the blueprint for buying and selling property, but sometimes things don’t go according to plan. When one party backs out or refuses to close, the other party may want the court to force the deal to happen. This legal tool is called specific performance, and it’s especially important in real estate because no two properties are exactly alike.
Nativ Winiarsky offers a comprehensive look at when and how specific performance can be pursued in real estate transactions, the burden of proof required to enforce it, and key strategic considerations that can influence whether specific performance or monetary damages is the more prudent course of action.
What Is Specific Performance?
Specific performance is a court order requiring a party to fulfill their contractual duties, rather than simply paying money for breaking the contract. In real estate, this remedy is common because land is considered unique. That uniqueness means money alone can’t always make up for a lost deal.
However, specific performance is an equitable remedy, which means the court grants it only when fairness demands it. It’s not automatic and depends on several factors.
When Can You Seek Specific Performance?
To succeed, the party asking for specific performance must prove:
- A valid, enforceable contract exists. The agreement should clearly spell out the parties, property, price, and terms. Real estate contracts must be in writing under the Statute of Frauds.
- The requesting party has performed or is ready to perform. You can’t ask the court to force the other side if you yourself are in breach. That means being prepared to close, having financing lined up, and fulfilling any contract conditions.
- Monetary damages are inadequate. Because real estate is unique, courts usually assume money isn’t enough. But if the property isn’t unique or if the buyer has alternatives, the court might deny specific performance.
- The contract and parties’ conduct are fair. Courts won’t enforce agreements that involve fraud, duress, or unfairness. Both sides must generally be able to perform their obligations.
The Burden of Proof
The party seeking specific performance must clearly show the court that all these conditions are met. This is a higher standard than normal civil cases, so keeping detailed records and clear communications is essential.
What Should Buyers and Sellers Consider?
For Buyers:
- Act quickly to meet contract deadlines and contingencies.
- Keep documentation organized—emails, inspection reports, proof of financing.
- Consider filing a lis pendens if the seller might try to sell elsewhere, which alerts others to your claim.
For Sellers:
- Be clear about contract contingencies to avoid unintended obligations.
- Avoid taking backup offers unless your contract allows it.
- Consult your attorney before walking away from a deal to understand your risks.
Strategic Pros and Cons
While specific performance can ensure you get the property you want, it can lead to longer, more costly legal battles than simply suing for damages. Also, if the seller has already sold the property to someone else, forcing performance might be impossible. Both buyers and sellers need to weigh the benefits against these risks carefully.
Specific performance remains a powerful tool in real estate disputes, but it’s not a guaranteed win. Early legal advice and solid documentation can make all the difference in enforcing or defending contracts in New York’s competitive market.