As a Los Angeles real estate attorney, one of the more frequent types of cases we come across is a lawsuit for specific performance. In the real estate context, a suit for specific performance generally is a lawsuit arising out of a purchase and sale dispute where a buyer or seller is suing the other party to perform under the terms of the purchase and sale contract. The situations we see most frequently are those where the buyer would like to proceed with the purchase of a particular piece of real property but the seller is refusing to proceed with the sale. These disputes typically arise after the purchase and sale agreement has been signed by all parties and during escrow.
Here are 5 different things we consider when analyzing a possible claim for specific performance:
1. Do you have a contract? Without a specific contract (like a purchase and sale agreement) it will be very difficult to maintain a specific performance claim. In order to get a decree of specific performance the court must know what the specific terms the plaintiff is seeking to enforce.
2. Are you ready, willing and able to proceed with the transaction? In order to obtain a decree of specific performance the court will require the plaintiff to show that they are ready, willing and able to proceed with the transaction. In other words, if you are not able to perform under the terms of the contract, the court will not grant a decree of specific performance. That said, under certain circumstances (like the other side preventing performance) your performance may be excused but determining this is very fact specific.
3. Does your contract require arbitration? Before filing a claim in court you must examine your contract. The most commonly used contracts in California, the California Association of Realtor’s form contracts, have a paragraph that the buyer and seller can initial whereby they agree to have their matter heard by a private arbitrator instead of through the court system. If this is the case, you may need to initiate an arbitration instead of filing a new court case.
4. Does the contract have a mediation provision? Again, many of the purchase and sales agreements for the sale of real property in California are executed using the California Association of Realtors’ form purchase and sale agreement. These agreements generally require the parties to mediate all disputes before proceeding to arbitration or court. If either party fails to mediation, then the contract says that their penalty will be an inability to recover their attorneys’ fees even if they succeed on their claim or defeat their opponents claim.
5. Is the property at risk of being sold to someone else? If you are the buyer and a dispute arises during escrow you should analyze the risk that your property may be sold to someone else while you are trying to resolve your dispute. If this is a genuine risk, which it generally is, then you will want to record a lis pendens (a notice of pendency of action). This is a document that you record with the County Recorder’s office in the County where the property is located. The lis pendens puts all potential buyers on notice that there is a dispute over ownership of the subject property.
For help with your specific performance claim to inquire about a free consultation, please do not hesitate to contact us at (310) 954-1877, or firstname.lastname@example.org. You can also use our handy Contact Form on the side of the page and send us a message there.