Seller Defaults: Buyer Might Assign Contract

Buyer Assigns Contract and Litigation


I was able to get my Buyers a property at a great price. The Sellers backed out without reason on the closing day after the closing was finalized by the Buyers and funds transferred to their lawyer. There is $50,000 deposit sitting with the Listing Brokerage.

After consulting the lawyers etc, my Buyers being first time buyers didn’t want to get involved in litigation, so we sent a mutual release to this agent. It has been 3 days and the agent has ghosted us completely. I have tried calling, texting and emailing him but nothing yet…. my clients are obviously very worried , they just want to get their deposit back and move on. Any next steps?


Why not sell the litigation opportunity for $100,000.00?

There is always a great opportunity to sue the Sellers for specific performance.

The longer the lawsuit takes, the better. Litigation always takes time. The Buyer just wants $50,000. If the lawsuit takes 5 years, then, the Court will order the sale in 2029 at the 2024 purchase price. The Buyers will keep that profit and the Sellers in the meantime will have paid all the upkeep, maintenance and taxes on the house during the 5 years of litigation.

If the Buyers don’t want to do that, then they can simply assign the contract to another party. This will be someone familiar with the risks associated with litigation and prepared to finance the lawsuit.

For specific performance the plaintiff will need to show that the property was unique in some way. Also, they should register a Certificate of Pending Litigation (CPL) against the property. That will prevent the Seller from conveying the property or mortgaging the property to anyone else.

Brian Madigan LL.B., Broker

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