Real Estate Contracts
“But you have a contract,” your friends say when the builder doesn’t do what’s clearly stated in the contract. And you are frustrated, angry, and don’t know what to do next. The thing to do is to call your real estate agent first and then your attorney. Meanwhile, it may help to understand a few things about real estate contracts.
Real estate transactions revolve around written agreements that are called contracts. The listing agreement with a real estate agent, the sales agreement between a buyer and seller, and a builder who agrees to build a certain type of house for a certain amount of money are all contracts. But what is it, and why can it frustrate you or make you angry?
There are a number of different types of contracts, but in general real estate contracts such as the ones just described are an exchange of promises made by two people. You promise to give him money, and he promises to build you a house. What gets forgotten with contracts is that people sometimes break their promises. The builder promises in writing to build a house for you with a 375-square-foot deck but only builds a 300-square-foot deck. And when you point out his mistake he refuses to correct it or reduce the price of the house. Or the contract calls for hardwood flooring and the builder puts in laminate flooring, which is made of hardwood. It may be that each of you understood something different by the term hardwood flooring.
“But we have a contract”, you say. And he says, “Sue me.” The decision you now have to make with the advice of your attorney is whether or not it would be worthwhile financially to spend money suing the builder to either lower the price or correct the problem.
A contact in and of itself cannot force someone to do something. A contract forms the basis of legal action that may be taken to force one or the other party to fulfill the terms of the contract. That enforcement is usually done by attorneys in court. Whether you have a good case, how much will it cost, how much you stand to gain if you win, and how much time you have to wait are all considerations when deciding whether or not to sue for enforcement of a real estate contract. You may be frustrated that you’re missing 75 square feet of deck space, but it may simply not be worth the time, aggravation, and money a lawsuit would entail. It’s up to you.
Contracts are complicated, and some are written better than others. Writing good contracts, advising you on enforcement issues if they come up, and representing you are what lawyers do. Use their services wisely, especially in any real estate transactions.