What to Do if the Seller Backs Out
Q. My fiancé and I were set to close on a one-bedroom co-op in Jackson Heights, Queens. Both parties had signed the contract. We had our mortgage commitment letter and had turned in our board application. We were in the midst of moving out of our rent-stabilized apartment when the sellers suddenly informed us that they wanted to cancel the deal. If we, as buyers, had done this, we would have lost our deposit. But it seems as if there’s less at stake for sellers. What recourse does a buyer have when a seller suddenly decides to cancel a fully executed contract?
As for you and your fiancé, at the very least, you should get your deposit back. But you likely have other legal options that could allow you to collect damages or even compel the seller to close the deal. “There are a number of different remedies,” said Steven R. Wagner, a Manhattan real estate lawyer. Your list of remedies will hinge on the terms of your contract. For example, you may be able to file what is known as a specific performance lawsuit, which would compel the seller to transfer the property to you. A temporary restraining order would prevent him or her from selling it to anyone else while litigation is pending. If the apartment has already been sold to a third party, you might be able to sue for damages known as loss of bargain, Mr. Wagner said.
Ideally, you have a contract with ample protections. An experienced real estate litigator should review it and guide you through the various possibilities.