What Constitutes a Material Breach of a Florida Real Estate Contract

What Constitutes a Material Breach of a Florida Real Estate Contract?

When parties to a real estate transaction sign a contract, each side makes a legally-binding commitment. In a typical situation, a seller is promising that he or she has clear title to a property and has disclosed all known material or latent defects. The seller agrees to transfer ownership at closing, and the buyer is promising to pay the seller in exchange for the property.  When one party fails to uphold his or her side of the agreement, it may mean they have materially breached the contract. If you are considering purchasing or selling Florida real estate, it’s essential to understand what constitutes a material breach of a Florida real estate contract:

Florida Breach of Contract

In general, an enforceable contract is formed when there is a legal document that captures a buyer’s offer, the seller’s acceptance, and consideration. In Florida, and most other states, a breach occurs when a party does not do something they have agreed to do, or if one party prevents the other from fulfilling a contract term.

What is a Material Breach of Contract?

A breach that prevents a party from fulfilling their obligation under a contract is a material breach. In a real estate contract, there are multiple ways a party can breach. The breach often occurs before closing. For example, a buyer could breach the contract by failing to obtain financing to buy the property or by not depositing enough money.  A seller may breach by not making certain agreed upon repairs or by failing to attend the closing.

Remedies for Material Breach

A party who has been injured by a material breach can request either equitable or monetary damages.

Equitable Remedies

  • An equitable remedy is asking that the court make another party do or not do something. With real estate, a buyer or seller may want specific performance, or for the court to order the party to complete the transaction. I
  • In Florida, both parties to a real estate transaction usually have the right in the contract to request this remedy. However, it is unusual for a court to order specific performance.

Monetary Remedies

  • The real estate contract will usually have language that describes the available monetary remedies in the event of a breach.
  • These are known as liquidated damages. They are an agreed-upon amount or way of calculating the damages that will be used if there is a breach.
  • Liquidated damages cannot be punitive to either party.
  • An example of liquidated damages is where the parties agree that if the buyer breaches the contract, the seller can keep the deposit.
  • Absent a liquidated damages clause, a seller might ask for the difference between the proposed purchase price and the current market value, or for other or consequential damages. A buyer may want his or her earnest money back plus any costs, such as moving fees.

When your Florida real estate contract is materially breached, it can be frustrating and complicated to resolve. Guy Rabideau, Esq. and David E. Klein, Esq. are Florida Board-Certified Real Estate Attorneys with the experience you need for all aspects of your Palm Beach County real estate transaction.  We have the expertise and local knowledge you need to ensure that your interests are protected during every stage of the process. Contact Rabideau Klein today to discuss your real estate legal needs.


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