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Options for Addressing a Real Estate Contract Breach

April 30, 2019

Individuals or parties sign real estate contracts for leases of commercial spaces, buying or selling houses, providing subcontractor services and for other business transactions. Ideally, the sides honor the contract agreement and everyone is happy. However, this is not always the case and sometimes the law is even broken. The contract will have language to address a breach, but the reality of solving the issue may lead to different conclusions.

Avoiding Court

Court is more expensive and time-consuming. If the parties can agree to sit down and discuss the issues, it may be possible to quickly fashion a solution by means of settlement discussions or mediation. Using these options may be particularly desirable if the parties will potentially have an ongoing relationship, as is the case with a landlord and tenant or a property owner and a contractor.

What are the goals?

It is best to determine ahead of time the goals or best possible outcome in resolving the dispute. Often the plaintiff will simply want the other side to perform the specified services, pay for them or otherwise honor the contract. The plaintiff may also wish to seek financial damages for the inconvenience or loss of business caused by the breach. Finally, one side may wish to void the contract.

Going to Court

Sometimes court is necessary to resolve a matter. Small claims court may sometimes be an option, however, if the dispute exceeds the small claims jurisdictional amount ($5,000.00), it is important to determine if a court battle is worth the time and expense. Generally, it is if:

  • There is a substantial amount of money involved

  • There are construction issues in dispute

  • One party has failed to substantially perform

  • A community association takes exception over completed construction or work in progress

  • There are title issues that need to be resolved

Contracts Serve a Purpose

A well-drafted contract can be the difference between a business’s success and failure or protect individuals from losing a large amount of money. Whatever the nature of the real estate dispute, an experienced real estate attorney can protect a client’s legal interests and guide them through the legal process, whether it is litigation or an alternative, to resolve the issue in a fair and equitable manner.