Can I Sue for Specific Performance in a Tennessee Real Estate Deal?
Buyers and sellers of real estate invest time, money, and effort into the transaction process. If you are looking to buy or sell a property, you expect the other party to fulfill their obligations and follow through with the contract. Unfortunately, one side may sometimes fail to stick to their end of the deal or pull out of the agreement. When this happens, it can be devastating and frustrating for the other party.
After a real estate deal falls through because the other party backs out or fails to fulfill their end of the agreement, your first thought might be to sue for financial damages. While Tennessee law allows you to seek financial compensation, sometimes monetary damages are insufficient. In such a case, you may have the right to sue for specific performance. This remedy requires a party to a real estate contract to fulfill the terms of the contract.
Understanding Specific Performance
Specific performance is an equitable remedy available in contract law. Another common form of equitable relief is an injunction. Specific performance is often applied in real estate disputes. Unlike monetary damages, where the breaching party is ordered to pay financial compensation, specific performance requires the party that breached the contract to fulfill its contractual obligations. In a real estate dispute, this can mean forcing a seller to hand over the property or making the buyer complete the purchase.
Specific performance is frequently used in real estate because properties are unique and irreplaceable. Under the law, every property is considered unique, with its own set of benefits. It can be hard to tell how much is enough to compensate the affected party, and another property can’t be offered as a substitute.
When Can You Sue for Specific Performance in Tennessee?
In Tennessee, you are allowed to sue for specific performance if the following elements exist;
- A valid and enforceable contract
- The party seeking specific performance has met its contractual obligations or is ready, willing, and able to perform.
- The other party has failed to fulfill their contractual obligation.
- Financial compensation alone is insufficient.
Here are some of the specific situations in which you may be able to seek specific performance in a Tennessee real estate deal;
- A seller decides to back out of the deal or refuses to transfer the property because they want to get a better deal or simply because they have changed their mind. In such a case, the buyer can seek specific performance.
- A buyer refuses to follow through despite having no legitimate reason. In such a case, it may be possible to ask the court to force the buyer to close the deal.
However, while sellers can sue for specific performance, this remedy is rarely applicable or even sought. Often, real estate contracts include provisions that protect sellers from breaches by buyers by providing monetary damages, rather than a forced sale. After receiving financial compensation, sellers can market their property and enter into a contract with a new buyer. But this is not to say that, as a seller, you should not seek specific performance. Depending on the circumstances, it may be necessary to pursue this remedy. A skilled real estate litigation attorney can guide you accordingly.
Contact a Knoxville Real Estate Attorney
If you are dealing with a breach of contract on a real estate transaction, contact our skilled Knoxville real estate attorney at Reynolds, Atkins, Brezina & Stewart PLLC to assess whether specific performance is an appropriate remedy for your case.
