Can You Claim Compensation If a Seller Does Not Perform Agreed Work before Closing?
When two parties agree on terms over the acquisition of a property, this will lead to certain contractual obligations. Much of the information will be clearly written into the documentation circulating between the parties and their advisers, and this information may include certain non-standard terms that relate to required work. In such a situation, the seller may be obligated to perform remedial work before the buyer takes possession, and, more often than not, this is performed to mutual satisfaction. However, sometimes a seller will fail to perform this work, and the settlement day may arrive. If you're a buyer in this situation, do you have the right to claim compensation from the other party, and if so, how do you proceed?
Proceeding or Backing out
The first thing you need to do is determine whether to proceed with the contract of sale or to back out. The small print within the contract will likely give you this option, but you may not automatically want to do this. For example, you may have waited a long time to find a home in this particular location, or the purchase may form part of a broader acquisition plan.
Open to Negotiation?
If you decide to continue, you will nevertheless want the other party to act. Ideally, you'll be able to agree on a course of action between you without any formal request, but if they are unwilling or unable for some reason, you may need to stake a claim.
Loss of Value
In legal terms, you may be able to sue the other party because the property has lost its value in some way due to intransigence or negligence. You'll need to point to a clear difference between the property's value now (in its actual state) and the amount you agreed to pay under the contract.
Loss of Opportunity
Some people in your situation will have agreed to purchase the property because they had other plans in mind following the acquisition. This might be more appropriate when talking about commercial property, but either way, you will need to prove that the breach of contract was mainly responsible for a loss of opportunity.
Performing the Work
Fundamentally, you need to get compensation to help you rectify the defect and will need to show the court that the work is both necessary and reasonable. If the seller had performed some work in this area, but you were not happy with it, you also need to show that their efforts were not fit for the purpose.
Reserving Your Rights
Most importantly of all, never complete the settlement documents without reserving your rights to seek compensation. This will need to be included as part of the contract and without any ambiguity. Otherwise, the seller may assert that you had simply waved any rights and decided to purchase the property in any case.
Getting It Right
Clearly, you must follow certain guidelines and be sure of your position before you go on to seek compensation. Discuss your case with an experienced compensation lawyer to avoid any issues along the way.