What happens if there’s a dispute over your real estate contract?
A contract dispute occurs whenever either party in a real estate deal—the buyer or the seller—does not comply with one of the terms or conditions in the contract. A breach means one of the parties failed to fulfill all of his or her obligations as stipulated in the contract. Depending on the type of breach, the agreement could still be salvaged. For example, if the seller failed to leave behind contractually stipulated fixtures and appliances, the sale could still go through if those fixtures are returned—or the price adjusted to reflect this change. Sometimes failure to uphold one of the contingencies—such as being able to find financing under the terms stipulated in the contract—essentially nullifies the deal. In these situations, the sale does not go through and the buyer gets his or her money back. Many sales contracts include language to provide for liquidated damages if the other party breaches the agreement. These liquidated damages typically equal the amount of the deposit paid by the buyer.
In Florida, if the buyer in a real estate transaction breaches the terms of the contract, he or she may be liable for monetary damages. This amount usually consists of the difference between the contracted price and the market value, deducting any deposits or other payments the buyer already has made to the seller.
For real estate contract issues, a Dispute Resolution System (DRS) represents a possible solution. According to the National Association of Realtors, the DRS exists to provide a resolution for “disputes between buyers, sellers, and real estate brokers/salespeople not otherwise covered under Article 17 of the Code of Ethics and Standards of Practice of the National Association of REALTORS® (NAR).” Using methods such as mediation and arbitration, DRS programs help resolve disputes quickly, efficiently, and without involving the legal system. Under certain conditions, a contract may be able to be canceled without any consequences. Many home purchase contracts include provisions to resolve disputes if they occur.
By the way, if you are a Realtor here in Southwest Florida, you need to be very careful not to provide legal advice if your clients are in a real estate dispute. Encourage your clients to refer to their contract for instructions on resolving their dispute. The “As-Is” contract typically has a section that illustrates who the parties agree will serve as escrow agent (this is the party that will hold the funds until the deal is complete). This is most often the real estate broker, a title company or a lawyer. If a real estate transaction fails and there’s a dispute over who retains the deposit, there are provisions in the purchase contract that provide direction on how to resolve the dispute.
If you think you have the grounds to file a dispute or you’re in the midst of one, you should contact a local contract attorney like Brian Zinn who is qualified in real estate law like the professional and experienced attorneys at ZinnLaw. If you need to have a real estate contract looked over, or you are looking to dispute a contract you’ve already signed call us (239) 418-1529 or go to our website www.zinn.law to schedule a complimentary consultation at one of Brian Zinn’s offices in either Fort Myers or Naples in beautiful Southwest Florida.