Last Update: 3/25/20

In Florida, buyers breach real estate contracts all of the time and in all sorts of ways. When a buyer fails to meet his or her obligations under a sales contract, oftentimes it leaves the seller wondering what steps to take now that the buyer has failed to close the transaction.

Should the seller sue the buyer for money?

Should they rescind the deal and try again with another purchaser?

Should they force the buyer to complete the transaction?

What about any damages they’ve sustained by the buyer breaching the contract — how does the seller get compensated for that harm?  What about the deposit?

Florida law – real estate common law as well as contract law — provides sellers with a variety of legal remedies.  However, in most Florida real estate contracts, the agreement will spell out the remedies available to the seller in the event of a default by the buyer (that’s one of the many reasons why it’s important to READ the contract before you sign it).

Read: Coronavirus – Rescinding a real estate contract using the force majeure provision.

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Alternative Remedies

When a buyer breaches a real estate contract, most sellers get upset and bark out that they are going to sue the buyer for their damages while at the same time forcing the buyer to purchase the property. However, that’s not the way things work; under Florida law, the seller must choose between alternative remedies.

When a buyer breaches a real estate contract, a seller must decide whether to close the transaction, seek specific performance of the agreement or seek monetary damages for the breach. See, Clements v. Leonard, 70 So. 2d 840 (Fla. 1954).

The choice to sue for breach of the sales contract is called a remedy “at law.” The choice to compel the buyer to go through with the purchase of the property is called a remedy “in equity.” The seller must choose one route or the other, and maybe well advised to seek the assistance of experienced real estate counsel in making that call.

Abandonment of the Contract

Sometimes, it’s hard to tell if a deal has gone south or not. However, in most cases, it’s pretty clear that the deal is not going to close because the buyer is unwilling (i.e. the buyer is unhappy with the results of an inspection) or is unable to close (i.e. the buyer fails to get approved for financing) and communicates that information with the seller.

However, there are times when the seller isn’t sure of what’s happening. The buyer may be saying one thing, but doing another or the buyer may not be saying or doing anything at all. Under Florida law, when a buyer does not fulfill any obligation under a contract or does not take any steps towards completing a deal, the seller may be able to claim that the buyer has abandoned the contract.

The Florida Supreme Court has long recognized that a buyer can abandon a contract by simply dragging his or her feet for so long that the lapse of time itself communicates that the buyer is no longer interested in completing the transaction. See, Rosenthal v. Largo Land Co., 146 Fla. 81, 200 So. 233 (1941); Kuharske v. Lake County Citrus Sales, 44 So.2d 641 (Fla. 1949).

What Should You Do If a Buyer Defaults on a Residential Sales Contract?

If you are having a problem with a pending real estate transaction in Florida, then as a seller there are both legal and equitable remedies available to you to deal with the issues preventing the deal from closing. Should you seek to enforce the sales contract and require the buyer to close? Should you rescind the contract and let the buyer out of the deal? Or, should you retain the buyer’s deposit and move on? Each remedy has its own unique legal ramifications.

An experienced Florida real estate lawyer can explain the nuances of your particular situation and help you decide which alternative is in your best interests.

A good piece of advice if you are involved in a real estate transaction where the buyer is in default, is to at least speak with an experienced Florida real estate lawyer to learn about your rights. Most real estate lawyers, like Larry Tolchinsky, offer a free initial consultation (over the phone or in person, whichever you prefer) to answer your questions.

Related:

• What Happens When a Seller Defaults on a Residential Sales Contract in Florida?
• 19 Reasons To Hire a Real Estate Lawyer When Buying or Selling Florida Real Estate

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