If you break a real estate contract without a legal reason for doing so, you run the risk of being sued for breach of contract. However, if your contract contains one or more contingencies, you may be able to break the agreement without recourse from the other party. Below are some common contingencies that allow parties to break real estate contracts in Georgia.
- HOA guidelines – Before closing buyers are usually given an opportunity to review all applicable Home Owner Association guidelines. If a prospective purchaser uncovers guidelines with which he or she is unhappy, the real estate contract may be legally terminated.
- Financing – Most real estate contracts contain contingencies allowing either party to cancel the agreement if financing cannot be obtained.
- Home inspection – A home inspection clause may permit termination of a real estate contract by a buyer if unreported damage is uncovered.
- Appraisal – A buyer may be able to terminate a real estate contract if the property is appraised for a value lower than the selling price.
- Clear title – Real estate contracts require that buyers be provided with clear title upon closing. When title issues are uncovered during the title search process, the seller will generally be required to cure said title issues.
As noted above, there are a number of ways to legally break a real estate contract. However, when the failure to comply with an agreement is not based on a contingency, there are several possible remedies available to the non-breaching party, including:
Damages – If one of the parties to a real estate transaction suffers financial loss due to a contract breach by the other, then the aggrieved party may be able to file a lawsuit for monetary damages.
Termination – Termination of the contract is usually an option in the event of a breach by either party. When both parties agree to terminate a real estate contract, the buyer is usually allowed to recover any purchase money paid.
Specific Performance – If the seller refuses to transfer the property to the buyer, it may be possible to sue for specific performance. Specific performance asks that the court to force the seller to transfer the property to the buyer. However, most courts are reluctant to grant this remedy.
Georgia Real Estate Attorneys
When buying or selling residential or commercial property, experienced real estate legal counsel is necessary to ensure that things go smoothly. At Klosinski Overstreet, LLP, we will assist you with all legal aspects of your residential or commercial real estate transactions in Georgia and South Carolina. Our Georgia and South Carolina real estate attorneys have experience facilitating the purchase and sale of a number of types of properties, including single family homes, condominiums, multifamily homes, retail centers, office buildings, hotels, apartment complexes, and vacant property slated for development. Therefore, if you are planning on buying or selling residential or commercial real estate, please contact us for a consultation.
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