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Define Specific Performance in Real Estate
Specific Performance:
"Specific performance" is a legal term that means making someone follow through with a promise they made in a contract. Instead of just paying money to make up for breaking the promise, the person has to actually do what they agreed to do. It's a way for the courts to make sure that the terms of a contract are honored as they were originally intended.
Example:
John and Mary signed a contract for John to sell his house to Mary. However, before the deal is complete, John changes his mind and decides not to sell the house. Mary really wants the house and decides to go to court to request specific performance. The court agrees with Mary and orders John to follow through with the contract and sell the house to her.
"A Deep Dive for Real Estate Agents"
A few more points to keep in mind regarding specific performance:
- Specific performance is an equitable remedy, meaning that it is not automatically granted by the court. Instead, it is granted at the discretion of the judge based on the particular circumstances of the case.
- Specific performance is typically awarded when monetary compensation (also known as damages) would not be sufficient to make the injured party whole. This often occurs in cases involving unique or irreplaceable properties, where finding a substitute property would be difficult or impossible.
- The contract must be clear, valid, and enforceable for specific performance to be considered. If the terms of the contract are ambiguous or if the contract itself is deemed unenforceable, the court is unlikely to grant specific performance.
- Specific performance may not be granted if it would cause undue hardship or if the court determines that enforcing the contract would be unjust.
As a real estate agent, it's important to be familiar with specific performance because it can impact the outcome of property transactions. Ensuring that contracts are well-drafted, clear, and enforceable can help minimize the risk of disputes that could lead to litigation and a possible specific performance claim.
"Wit & Whimsy with the Dumb Ox: Unlocking Knowledge with Rhyme:"
In a land where deals are signed,
Promises made should be well-defined.
But if one breaks the vow, oh dear,
Specific performance may appear.
John and Mary, a house affair,
A contract broken, it wasn't fair.
To the court, Mary pled her case,
Specific performance put in place.
So remember, when deals go awry,
This legal tool may well apply.