Anyone that has bought or sold real estate is familiar with real estate purchase contracts. The Arizona Association of Realtors has a sample of the Residential Resale Real Estate Purchase Contract available online that you can review for clarity. Most people understand that a real estate contract is a list of commitments between the buyer and seller during the course of selling a property. It’s also fairly common knowledge that a breach of a real estate contract happens when either side fails to perform those agreed upon steps.
To help you better understand, we’ve put together this simple guide on what constitutes a breach of a real estate contract while also sharing some common examples of what happens when there is a breach of a real estate contract in Arizona.
Buyer Breach of Real Estate Contract in Arizona
The state of Arizona requires real estate purchase and sale contracts to be in writing. One of the reasons for this law is that it makes it easier to determine when a breach of the contract has taken place and what options are available to resolve the matter. The most frequent breach of a real estate contract occurs when a buyer fails to pay for the home or close on time. Typically, these failures are the result of an inability to find funding or an unexpected financial issues.
It’s important to note that “breach” is contract specific. For example, if the contract was contingent upon the buyer receiving financing, they might not be in breach of the contract if a failure to find financing was outside of their control. If the purchase agreement did not have this contingency, then the buyer may in fact be in breach of his or her contract if the sale is unable to go through.
Seller Breach of Real Estate Contract in Arizona
While it is certainly more common for a buyer to breach a real estate contract, there are plenty of ways that a seller can breach the agreement as well. If the seller fails to provide clear title to the property and delays the close of escrow, a buyer might have a claim that the seller breached the contract. It is also common for a residential real estate contract to include some or all personal property in the sale of the home. If the seller has agreed to include fixtures, appliances, and/or personal property, and those items were removed before the close of escrow, then the seller has most likely breached the real estate contract. Again, the best advice is to read the contract and to know the provision you are bound by under the contract.
What Happens When a Breach of a Real Estate Contract Occurs?
Nearly all real estate purchase contracts in Arizona include a detailed process to resolve any disputes that arise. These contracts typically invoke alternative dispute resolution, such as mediation or arbitration, as the venue of choice for resolving disputes.
If you believe that the other party has committed a serious breach of the contract in a real estate transaction you’re involved in, then you should contact an experienced Arizona real estate attorney as soon as possible. While you might feel comfortable asking your realtor for advice, they are not qualified to give you legal advice and can be in violation of their duties as a realtor if they do. The purchase or sale of a home is one of the largest transactions most people make throughout their life. It is essential to make sure you are represented by the right professional for each part of the process.
If you believe you or the other party might have breached a real estate contract, it is especially important to retain legal counsel who can help you find a fair resolution. In many real estate contracts, there are potential liquidated damages that you might be responsible for if you are found in breach of the agreement. Thus, it can be a costly and impactful mistake to believe that you can simply work out a fair resolution on your own if you are unable to perform while under contract.
Work with an Experienced Real Estate Law Firm
MacQueen & Gottlieb has consistently been voted one of the top real estate law firms in the Phoenix area since our founding. Our attorneys are experienced and knowledgeable on all types of breaches of real estate contracts that can occur and can help guide you through the best course of action for a fair resolution. Real estate professionals can help you find a home and prepare a purchase contract, but they are not qualified to assist you if a serious breach of that real estate contract takes place. Contact MG Law today at 602-533-2840 to schedule an initial consultation or make an appointment online.