For example, if a seller breaches a contract to sell a warehouse building that the buyer definitely wants, the buyer could ask the court to compel the seller to sell the property even over the sellers' objections. In this case, the Sellers contend that the Hampton Island decision established a rule that automatically entitles them to specific performance, arguing that the case stands for the proposition that monetary damages never constitute an adequate remedy at law following the breach of a real estate sales contract, regardless of the circumstances. We serve clients throughout Georgia including those in the following localities: Fulton County including Atlanta; DeKalb County including Decatur and Tucker; Bibb County including Macon; Cherokee County including Canton; Clayton County including Jonesboro; Cobb County including Marietta; Douglas County including Douglasville; Forsyth County including Cumming; Gwinnett County including Lawrenceville; Henry County including McDonough; and Rockdale County including Conyers. In these cases, when we represent the buyer, we always recommend recording a lis pendens (notice of . Robbins Ross Alloy Belinfante Littlefield, Richard L. Robbins, Heather H. Sharp, Rachel F. Gage, for appellants. It is undisputed that the Contract does not refer to specific performance as a remedy for a breach, and the record shows that the first time the Buyers had notice that the Sellers might seek specific performance was on May 24, shortly after the Buyers had notified the Sellers that they wanted to terminate the Contract and relinquish the earnest money. Can a party withdraw an offer to purchase or sell property even though the party agreed that it would remain open for a specified period of time? "Of course, whether a provision represents liquidated damages or a penalty does not depend upon the label the parties place on the payment but[,] rather[,] depends on the effect it was intended to have and whether it was reasonable." 10-6A-5 and O.C.G.A. Common law a. That is because of the inherently unique nature of a parcel of real estate. The essential facts in Hampton Island , however, are clearly distinguishable from the instant case. Further, it is undisputed that the Sellers did not make any changes to the Property to accommodate these specific Buyers that caused the Sellers to incur additional expenses or that made the Property less attractive to other potential purchasers. The Contract provided that, if the Buyers defaulted, the Sellers could accept the earnest money as "liquidated damages in full settlement of all claims of Seller[s] against Buyer[s,]" but also stated that nothing in the Contract prevented the Sellers from refusing to accept the earnest money as liquidated damages. call for specific quality of title at closing (such as General Warranty Deed) allocation of closing expenses. Specific performance is only ordered when money damages are an insufficient remedy for the party's failure to perform a contract. Hours Monday-Friday 8:30am - 5pm 16607 Blanco Rd., Suite 12101 San Antonio, Texas 78232 717; 1 Sim, & Stu. We note that the Sellers did not file a claim for monetary damages arising from the Buyers breach, with the exception of incidental damages. The Bullet Point: Real estate is almost always consideredMore , 303 Ga. App. The answer is yes under both federal and state law. 244 Ga. 685, 687 (1), 261 S.E.2d 703 (1979). No. When that is the case, such as in disputes over parcels of real estate, the injured party may seek other remedies, like a court order demanding that the other party complete the performance promised in the contract. Fulton Georgia Complaint for Specific Performance of Real Estate Contract. 7031 Koll Center Pkwy, Pleasanton, CA 94566. For more information on Martindale-Hubbell Client Review Ratings, please visit our Client Review Page. On the other hand, courts do acknowledge that where one person's object was to buy or sell a property, mere money damages will not always be sufficient to rectify the breach. Martindale-Hubbell validates that a reviewer is a person with a valid email address. However, if either party fails to perform under the contract for a reason that is not permitted by its contingencies or other terms, the other party can obtain certain kinds of relief, most likely money damages or specific performance. See, e.g., Black v. American Vending Co. , 239 Ga. 632, 238 S.E.2d 420 (1977) (involved personal property); Irwin v. Dailey , 216 Ga. 630, 118 S.E.2d 827 (1961) (involved renter seeking specific performance of an agreement to lease with an option to purchase real and personal property); F. & W. Grand Five-Ten-Twenty-Five Cent Stores v. Eiseman , 160 Ga. 321, 127 S.E. Such termination will also terminate any liability on behalf of any co-tenant under the same lease. Is a court likely to grant specific performance because the seller (or buyer) is refusing to go through with the real estate purchase agreement? The Contract provided a two-week due diligence period, during which the Buyers could cancel the Contract without incurring a penalty. What might the legal fees be to pursue this type of case. Money damages are by far the most common type of legal remedy in a home purchase situation. See Peachtree on Peachtree Investors , 251 Ga. at 697 (2), 308 S.E.2d 825 (holding that, under the circumstances presented, the trial court did not err in finding that money damages constituted an appropriate relief and in denying the plaintiff's claim for specific performance as a result); Liberty Capital , 338 Ga. App. Copyright 2023 Georgia Association of REALTORS, REALTOR Days at the Dome Legislative Conference, General Election Candidatessupported by RPAC, Conflict of Interest Disclosure Policy and Agreement, Confidentiality and Non-Disclosure Agreement. ), Do I have to disclose that I am getting a referral fee for referring a client to a broker in another part of the state or country? As such, both parties are entitled to a "reasonable" postponement of the closing. The closing on the Contract was scheduled for June 22, 2017. Here, the undisputed evidence shows that, at the time the parties entered into the Contract, the Broker had not performed any significant efforts to sell the Property. These provisions have been interpreted by the Georgia Real Estate Commission to require all salespersons of a broker/owner to be licensed. How would you, as a seller, proceed with this type of action? Here are details: Lawyer directory. 19 MA 0096, 2021-Ohio-304 In this appeal, the Seventh Appellate District affirmed the trial court's decision, agreeing that the buyer was entitled to an award of specific performance to purchase the seller's property. On appeal, this Court ruled that it was "well established that monetary damages are not an adequate legal remedy where the contract sought to be performed involved the sale of unique real property[,]" and also held that the rule applied regardless whether it was the seller or the purchaser who was seeking specific performance. "Specific performance is an extraordinary, equitable remedy, which will be granted only if the complainant does not have an adequate remedy at law. 749, 751 (1), 627 S.E.2d 454 (2006), for this proposition. I really wish we could make them close!!! The answer to this question is no, unless you are asked. No. Make your practice more effective and efficient with Casetexts legal research suite. Questions which merely lurk in the record, neither brought to the attention of the court nor ruled upon, are not to be considered as having been so decided as to constitute precedents.") See Laseter, 251 Ga. at 180 (1), 304 S.E.2d 72; Southeastern Land Fund, 237 Ga. at 228-229, 227 S.E.2d 340 (The Court held that, even if a real estate contract does not mention specific performance as a remedy, specific performance is still available unless it is specifically excluded, although the contract in that case actually mentioned . When one party to a sales agreement breaches the contract by not performing as required by the contracts terms, the harmed party often does not want monetary damages but desires actual performance. Hughes v. Great Southern Midway , 265 Ga. 94, 454 S.E.2d 130 (1995) (The Supreme Court affirmed the trial court's grant of the seller's request for specific performance because the seller had rezoned the property at the insistence of the buyer, who then breached the sales contract.). Executive acknowledges and agrees that the Company's remedies at law for a breach or threatened breach of any of the provisions of Section 9 or Section 10 would be inadequate and the Company would suffer irreparable damages as a result of such breach or threatened breach. As explained in Division 1, supra, however, the Sellers failed to show that they were entitled to specific performance due to the lack of an adequate remedy at law. The Buyers contend that the Sellers were not entitled to specific performance of the Contract because they (the Buyers) had no notice prior to executing the Contract that the Sellers could seek specific performance as a remedy if they (the Buyers) breached the Contract. Section 8-1-47 - Presumptions as to availability of specific . at 546 (3), 702 S.E.2d 770 ("Georgia law provides that a party can be barred from obtaining the equitable relief of specific performance if he is guilty of unclean hands. As such, Georgia is thought of as a state where caveat emptor is still the law of the land. A townhome development can be organized as a condominium or simply subjected to a set of covenants (often called a Declaration of Covenants, Conditions and Restrictions) designed to help protect property values. Georgia license law provides that a licensee can be sanctioned for Failing to obtain a persons agreement to refer that person to another licensee for brokerage or relocation services and informing that person whether or not the licensee will receive a valuable consideration for the referral. (See O.C.G.A. 1. The Acceptance Date is the date that the party who has been presented with an offer or counteroffer signs and accepts it. In a practical sense, it can have the effect of motivating buyers or lenders to stay away. The Client Review Rating score is determined through the aggregation of validated responses. 44-1-16. The Buyers present a compelling argument that, absent some notice in the sales contract, it is unlikely that a typical purchaser of real property would understand that they could still be compelled to purchase the property if they decided to back out of the Contract (versus simply forfeiting the earnest money). If a builder gives me a prize or bonus for selling his or her homes, does it belong to me or my broker? See Liberty Capital , 338 Ga. App. Yes. In the most extreme case, it could lead to someone being forced to sell their home against their wishes. Further, the undisputed evidence shows that, if the Sellers had placed the Property on the market soon after the Buyers expressed their intent to terminate the Contract, the Sellers would have been able to quickly sell the Property for at least the Contract price. Georgia law creates a few limited exceptions that persons performing brokerage activities be licensed. The Brokerage Relationships in Real Estate Transactions Act (BRRETA) defines a Designated Agent as one or more licensees affiliated with a broker who are assigned by the broker to represent solely one client to the exclusion of all other clients in the same transaction and to the exclusion of all other licensees affiliated with the broker. (O.C.G.A. If I am a broker/builder, can I hire unlicensed individuals to exclusively sell my property if they are my full time employees? 623, 637 (4) (b), (694 S.E.2d 102 (2010) (holding that the plaintiff had met its burden of showing that it had no adequate remedy at law and, thus, was entitled to specific performance). Deed, Quit Claim Submitting a contact form, sending a text message, making a phone call, or leaving a voicemail does not create an attorney-client relationship. Persons seeking such advice should consult an attorney. The filing of a Notice of Lis Pendens will almost always render the title to a property unmarketable pending the outcome of the lawsuit. Therefore, this was an objective method for calculating the Sellers damages that constituted another adequate remedy at law. Seth Weissman, GARs general counsel, frequently takes calls from REALTORS across the state regarding legal matters in the real estate industry. See OCGA 23-2-130 ("Specific performance of a contract, if within the power of the party, will be decreed, generally, whenever the damages recoverable at law would not be an adequate compensation for nonperformance."). Martindale-Hubbell Peer Review Ratings are the gold standard in attorney ratings, and have been for more than a century. contract to terminate it? What does a seller of real estate get if successful in a lawsuit for specific performance against the buyer? In California, the remedy is established by statute in the California Civil Code at Sections 3384 to 3395. The Buyers contend that the trial court erred in awarding the Broker its commission under the sales contract. (Citation and punctuation omitted.) There are 55,752 real estate listings found in Georgia.There are 631 cities in Georgia which include Atlanta, Decatur, Marietta, Holly Springs, and Ellijay. Specific Performance Jad Rentals of Youngstown, LLC v. Cox, 7th Dist. 2. The Brokerage Relationships in Real Estate Transactions Act (BRRETA) requires that a written brokerage engagement agreement be signed by the broker and his or her client to establish a client relationship. So, for example, a listing would provide that it is for an initial term of one (1) year and shall automatically renew for successive one (1) year terms unless either party notifies the other not less than thirty days prior to the end of a renewal term. Lawyers from our extensive network are ready to answer your question. Thus, we conclude that the Sellers failed to meet their burden of showing that they had no adequate remedy at law and, as a result, failed to demonstrate that they were entitled to the equitable award of specific performance of the Contract. In Georgia, a person cannot sign a contract for another person unless they are legally authorized to do so. It necessarily follows that, in order to obtain an award of specific performance, the plaintiff must present evidence to show his "entitlement to the extraordinary remedy of specific performance" by, inter alia, demonstrating that he has no adequate remedy at law. In these cases, specific performance is warranted when the seller establishes that he or she is ready, willing, and able to convey good and marketable title, free and clear of encumbrances or material defects, and there is no indication that the contract was inequitable or that a change in the circumstances rendered specific enforcement of the contract unjust although the relief actually obtained by him or her is the recovery of moneythe purchase pricefor which he or she may also have a remedy by an action at law. 273, 284 (b), 830 S.E.2d 605 (2019),. adequate description of property. Significantly, the record disproves any suggestion that the Sellers actually wanted the Buyers, specifically, to own the Property due to some prior relationship between the parties or the Sellers particular fondness for the Buyers. See, e.g., Laseter , 251 Ga. at 180 (2), 304 S.E.2d 72. Reviewers can be anyone who consults or hires a lawyer including in-house counsel, corporate executives, small business owners, and private individuals. All reviewers are verified as attorneys through Martindale-Hubbells extensive attorney database. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. This is because, even assuming that each and every parcel of land, house, apartment, condominium, etc., is, in fact, "unique," there is nothing "unique" about cash, or more specifically, the cash of potential purchasers. See Golden , 244 Ga. at 688 (4), 261 S.E.2d 703. As mentioned above, you can't simply sign the document and call it a day. Despite this, the Sellers argue that they were automatically entitled to specific performance as a matter of law because monetary damages would never constitute an adequate remedy at law, relying on the general principle that, when the contract to be enforced involves the sale of real property, "all real property is considered unique." The basic rules that apply to a time is of the essence clause are well-defined and include: Merely inserting a closing date in a real estate sales contract does not ensure that the date will be "of the essence.". If you have complied with all of your requirements under the contract and there are no contingencies that the other party can point to, you will have an argument that specific performance should be granted. Specific performance requires the breaching party to the contract to actually perform according to the contract terms. The Sellers have failed to explain why $40,000, plus the proceeds of the sale, would not have constituted an "adequate remedy" for them under the circumstances presented. See generally Southeastern Land Fund v. Real Estate World , 237 Ga. 227, 228-229, 227 S.E.2d 340 (1976) ("Depending on the language used in the contract and the discernible intent of the parties, the existence of an earnest money provision in a real estate sales contract can have one of three effects in the case of a breach by the buyer. See Benton v. Benton , 280 Ga. 468, 470, 629 S.E.2d 204 (2006). If the contract provides a specific, exclusive remedy in the event of the buyer's breach, the seller is precluded from bringing a lawsuit for the full purchase price. The Buyers contend that the trial court erred when it ruled that the Sellers were entitled to specific performance of the sales contract, despite the fact that the Sellers had an adequate remedy at law. The buyer is allowed to sue for specific performance if the seller refuses to move forward with her obligations under the agreed upon contract. The past year saw some notable rulings in the area of real property in Pennsylvania, including a pair of results regarding specific performance and easements that should inform future cases . 239 Ga. 195, 197, 236 S.E.2d 491 (1977), overruled on other grounds, Brown v. Frachiseur , 247 Ga. 463, 465, 277 S.E.2d 16 (1981). The Martindale-Hubbell Peer Review Ratings process is the gold standard due to its objectivity and comprehensiveness. at 51 (1), 789 S.E.2d 303 (physical precedent only); see also Forsyth County v. Waterscape Svcs. However, the initial sale of a First, the Sellers could have accepted the Buyers tender of the $40,000 in earnest money when the Buyers notified them that they wanted to unilaterally terminate the Contract on May 22, which was about seven weeks after the Contract was executed on March 31. Form of complaint for specific performance of contract to convey land See Laseter , 251 Ga. at 180 (2), 304 S.E.2d 72 ; Golden , 244 Ga. at 687 (1), 261 S.E.2d 703 ; Holloway , 239 Ga. at 197, 236 S.E.2d 491 ; CDM Custom Homes , 280 Ga. App. at 543, 702 S.E.2d 770 (The real estate sales contract specifically stated that, if the buyer defaulted on its payment obligation under the contract, the seller had the right to seek specific performance and damages.). First, you'd need to look closely at the purchase contract to see what it says about buyer breach. Being married does not give one spouse the legal authority to sign for the other. Notably, Arizona law construes escrow instructions, supplemental escrow instructions, and even receipts as valid writings sufficient to show an agreement between the contracting parties. 43-40-29(a)(8).) In that case, money damages may be inadequate to compensate the purchaser for losing out on the real estate, so specific performance of the contract may be necessary. 3. When you sue someone else, you put yourself at risk. The section is intended to provide helpful information to REALTORS. 71 Am. Plaintiff is a Georgia limited liability company with a principal office address of 3050 Amwiler Road, Suite 200-C, Atlanta, Georgia 30360. Principles of Real Estate Practice in GA on Amazon. See, e.g.. sales price and earnest money. In summary, we reverse the grant of summary judgment to the Sellers on their claim for specific performance. 44-101(6) (West). The association often owns common property such as roads, walkways and recreational facilities benefiting the community as a whole. Prior results do not guarantee a similar outcome and Martindale-Hubbell accepts no responsibility for the content or accuracy of any review. . No. 44-3-111.). This effectively disenfranchised African-Americans, Indians, immigrants and other minority groups. Interpleader 2020), a buyer entered into a land sale contract with a seller. 10-6A-3(9).) Defendant may be served with this lawsuit through its registered agent, Since a designated agent is defined as a licensee of the broker, the broker cannot be one of the designated agents. During that period, the Property was appraised for $1,850,000, or $75,000 more than the Contract price. Publisher. Under these circumstances, the Broker has failed to demonstrate that, at the time the Contract was executed, a $53,250 sales commission constituted "a reasonable pre-estimate of the [Broker's] probable loss.".