Seeking Specific Performance in California Real Estate Disputes: What is it and when to use it?

When disputes arise in real estate transactions, remedies may go beyond monetary compensation alone. The injured party may seek a remedy known as “specific performance” when a party fails to fulfill their obligations under a real estate contract. This legal concept, applied in California and other jurisdictions, compels the defaulting party to fulfill their contractual obligations as originally agreed upon. This article provides an overview of specific performance lawsuits in the context of California real estate transactions.

Understanding Specific Performance

Specific performance is a legal remedy that can be sought when monetary damages are inadequate to fully compensate the aggrieved party. In the context of real estate, specific performance involves seeking a court order that compels the defaulting party to complete the real estate transaction according to the terms of the original contract. It is often pursued in situations where the property is unique or has special attributes, making it difficult to replicate the transaction’s conditions and whereby monetary compensation might not adequately replace the unique value of the property.

Elements Required for Specific Performance

For a specific performance lawsuit to be successful, certain elements must be established:

1. Valid and Enforceable Contract: The plaintiff (the party seeking specific performance) must demonstrate the existence of a valid and enforceable contract. This contract should outline the terms and conditions of the real estate transaction.

2. Breach of Contract: The plaintiff must prove that the other party, the defendant, has breached the terms of the contract. Breach may involve failure to complete the sale, transfer ownership, or fulfill other obligations specified in the contract.

3. Inadequate Legal Remedy: The plaintiff must show that monetary damages alone would not adequately compensate them for the defendant’s breach. Specific performance is typically sought when the unique nature of the property or the circumstances of the contract make financial compensation insufficient.

4. Feasibility of Performance: The court will assess whether it is feasible for the defaulting party to fulfill their obligations under the contract. If the court deems specific performance impractical, it may not grant this remedy.

Benefits and Considerations of Specific Performance Remedies

Seeking specific performance in a real estate lawsuit offers several benefits:

1. Property-Specific: Specific performance ensures that the plaintiff receives the exact property specified in the contract, rather than a monetary substitute.

2. Protecting Investments: This remedy can protect the plaintiff’s investment in a unique or valuable property, for example, the property is historical or perhaps has highly unique or rare features i.e., a specific waterfront view, extensive acreage or other distinct natural features.

3. Enforceability: A court order for specific performance is legally binding, compelling the defaulting party to fulfill their obligations.

However, there are considerations to keep in mind:

1. Court Discretion: The court has the discretion to grant or deny specific performance based on the circumstances of the case.

2. Time and Costs: Pursuing a specific performance lawsuit can be time-consuming and expensive due to legal fees and court proceedings.

3. Compliance Challenges: Enforcing specific performance orders may still require ongoing court involvement.

Conclusion

In California, seeking specific performance in a real estate transaction lawsuit can be a powerful tool for enforcing the terms of a contract when monetary compensation is inadequate. However, it is a complex legal process that requires careful consideration of the unique attributes of the property, the feasibility of performance, and the potential costs involved. Parties considering specific performance should consult with experienced real estate attorneys to evaluate their case, explore their options, and determine the best course of action to achieve their desired outcome in accordance with California’s legal framework.

Real estate scenarios and contracts can be complex. Benefit from the knowledge of experienced real estate attorneys at Kendall Law. Contact us for guidance and support to ensure your rights and interests are protected. Call 310-619-4941 to schedule a consultation.