Top Breach of Contract Issues in Real Estate
Many people assume that a breach of contract is only something business owners worry about. And while companies occasionally do find themselves in contract trouble, there’s also all sorts of contracts that you enter as an individual that might end in a breach. This includes vehicle purchases, home construction, or when buying or selling property.
Buying, selling and leasing real estate are among the largest purchases an individual will make. So if you’re facing a breach of contract or want to create a strong agreement, the Roanoke business attorneys at Copenhaver, Ellett & Derrico, can help. By partnering with our firm, you can rest assured that we’ll use our experience and knowledge of Virginia contract law to achieve the best possible result.
What’s a Contract?
Before discussing why contracts break, let’s review what makes a contract valid under Virginia law. It’s important to understand that if the agreement isn’t valid, there can be no breach. Therefore fewer remedies are available.
In Virginia, a legally binding contract requires:
- An Offer
- A “meeting of the minds” (the parties intend to create legal obligations)
- Consideration (usually money in exchange for meeting the terms)
Additional factors include that the parties must have “capacity” to contract, the contract can’t be for an illegal purpose, and in some cases, the contract must be written. Capacity means a number of things, but a typical example is a minor who signs a contract can’t be held to it because they lack capacity. Or, if one of the parties was under the influence of drugs or alcohol, the contract could be invalid.
Once there’s a valid contract, according to VA Section 59.1-507.1 (a), “a breach occurs if a party without legal excuse fails to perform an obligation in a timely manner, repudiates a contract, or exceeds a contractual use term, or otherwise is not in compliance with an obligation.” Under the statute, an aggrieved party is entitled to some remedies even if the breach isn’t “material.”
Common Reasons Real Estate Contracts Go Wrong
A breach of contract can occur in several ways. To illustrate, let’s look at real estate contracts, like for the sale or purchase of a home or the private or commercial lease of space.
Some of the common ways real estate contracts are breached include:
- Failure to Pay – the escrow didn’t close on time or rent/deposits were not made
- Failure to Deliver the Deed – without delivery, nothing passes to the new owner
- Failure to Repair – The owner or landlord did not fix issues found in the inspection tat required repair.
- Fraud – the person didn’t own the property or did not make mandatory disclosures
- Unauthorized subleasing – You did not get the permission of the property owner/landlord to sublet
Real estate deals typically have a lot on the line because of the amount of money, assets, and complicated terms involved. That’s why it’s important to talk to Copenhaver, Ellett & Derrico and our real estate attorneys before entering into an agreement.
If something goes wrong later, we will be familiar with the deal and can work quickly toward resolution. But if you are already involved in a dispute, don’t hesitate to contact us to represent you.
Contact Us about Your Contract Issues
A breach of contract is a serious matter and it can be costly. Our experienced business attorneys understand contract law, how real estate transactions should be conducted, and how to avoid stressful problems for everyone involved. Let us worry about the legal issues and make sure you are covered.