House seller backed out — what are our rights?

Q: We found a house and entered into a contract to buy it. We did our inspections, got our mortgage loan set up and are ready for the closing about three weeks from now. Last night, the seller called and told us that she had an unexpected issue and will not be able to sell us the house. But don’t we have rights here? And do we have to wait until the closing date comes and goes before we start taking action to enforce the contract?

A: Most contracts contain contingencies allowing a party to cancel the deal if certain things happen, such as a bad inspection or the financing falls through. You need to carefully review your contract to make sure that the seller does not have a contractual way to cancel. If not, she is bound by what she agreed to, meaning that she must sell you the house.

Because she told you clearly that she is not moving forward, you don’t have to wait until the closing date to start enforcing the agreement. You or your lawyer should send her a letter now asking her to confirm in writing whether she is moving forward to closing. Once she confirms that she isn’t, most contracts give you the right to sue her for “specific performance,” meaning that you can ask the court to force her to sell you the property.

The practical problem with this is that it can take some time for the case to wind its way through the courts. So if you have concerns with where to live while this happens, or you are worried that you will lose your mortgage loan, this might not be the best option for you. It might be better to get your money back and move on to a similar house without all the trouble. But if this truly is the house you want, you appear to have the law on your side.

Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar.

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