What is a Contract of Purchase and Sale?
When one party sells a piece of real estate to another party, they enter into a Contract of Purchase and Sale, commonly known as a CPS. This is a contract that stipulates what is required of both parties in order to complete the transaction. If these requirements are not met, the CPS is considered breached and the sale does not go through. Oftentimes in the case of real estate transactions, a CPS is breached by the purchaser when they fail to secure sufficient funds to make the purchase on time. However, there are also cases where the seller is the one that fails to meet the obligations outlined in the CPS. That is when specific performance comes into play.
Specific performance is a remedy used in certain cases to mandate that the party breaching the contract follow through on their obligations as outlined in the contract in order to give the aggrieved party what they contracted for. The remedy of specific performance can be available in limited situations where a property or facts of the transaction are so unique that damages will not be sufficient.. This means that specific performance is only applied to cases where the property included in the CPS is unique enough that it would not be possible for the buyer to obtain a similar property for a similar price within a reasonable amount of time.
There are a number of factors that are considered in determining whether a property is unique enough to warrant specific performance. These include combinations of the following:
- Proximity of the property to certain amenities, such as schools, places of worship, recreational facilities, and green space.
- Specific aspects of the property, such as yard size or waterfront access.
- Specific aspects of the home, such as whether it is a heritage home and which renovations have been completed.
Any one of these factors is usually not enough on its own to call for specific performance upon a breach or contract, but if there is a combination of the above factors that makes it impossible to find a similar home in the same price range within a reasonable timeline, the courts can get involved and require the seller to follow through on the requirements of the contract.
Does Specific Performance Apply to Me?
If you are a buyer dealing with a breach of contract and believe that specific performance may be applicable in your case, speak to a lawyer today. Our experienced legal team can determine whether your case warrants specific performance and advise you on the best way forward.