Seller’s Remorse & Florida Condo Sales – a seller’s duties vs. a desire to get out of the contract for sale
When can a seller back out of a contract to sell a Florida condo? And when does the seller have to use good faith and reasonably diligent efforts to help close a real estate sale that she doesn’t want?
A June 16, 2017 case reminds sellers of Florida real estate to be cautious before you try to back out of that real estate contract. Why? You could end up spending more on attorneys fees & appellate attorneys fees than the condo is worth. Ask any real estate attorney in Florida, or any contract or business lawyer, and they will tell you that “getting out” of a signed contract may not always be easy. And, it may be very expensive. Florida law, and appeals courts, don’t take lightly to “buyer’s remorse”, “seller’s regret”, or Monday morning quarterbacking. Hindsight may be 20/20, but Lady Justice is blindfolded.
The Pinellas County case is from Florida’s 1st District Court of Appeal: Head v. Sorenson Case No. 2D16-3665.
Sorenson was the trustee of a trust which had a Florida condo. The condo was listed for sale and the trustee entered into a purchase and sale contract at the list price. On the first day. The purchase agreement contained some rather basic elements for the sale or purchase of Florida real property. The real estate contract required the seller to do certain things, and , likewise, the buyer was obligated to do certain things. (Ask any Florida trust lawyer about selling trust real estate and whether any trustees get “seller’s remorse” or have contract regrets.)
Sorenson, the seller, wanted to get out of the contract, which was conditioned up condo board approval. The seller encouraged the condo board to not approve the sale. When the condo board did not approve the sale, the buyer sued.
The facts as presented by the Appeals Court suggest that the seller had seller’s remorse and did not want to sell the condo after learning that she could have received, or might have received, a higher sales price. This case is a great lesson for people who enter into real estate, or other, contracts in Florida.
Why? Because our appellate courts have consistently said two things about Florida contracts. First, that the freedom to contract includes the freedom to make a bad deal. Secondly, you just can’t welch, or turn your back, on a contract, a written contract, which you signed and agreed to. Such a move has serious legal implications, and may cost a lot of money, whether in damages or attorneys fees. In Florida, there is an implied duty of good faith & fair dealing in a Florida contract. Yes, while people to a real estate contract are entering into a business or commercial relationship, and they can bargain at “arm’s length”, once you sign the contract, you are agreeing to conduct yourself accordingly. Getting out of a Florida real estate contract may not be as easy as you think. Ask any real estate litigation law firm.
In this June, 2017 Florida real estate appeal, there was an obligation on the seller’s part to use reasonable diligence to clear title and help make the sale go through. There was evidence that the seller did not try to help the sale to go through with the condo board. In fact, there is evidence which supports the belief of just the opposite: the seller did not want to the sale to go through, because the seller thought she could get a higher price. The seller contacted the condo board and told the board to that she did not want to go through the sale. (Does a Florida condo board of directors owe a duty of good faith to a prospective purchaser? Or does a condo board owe a duty to the seller owner?)
This case dealt with a summary judgment in favor of the seller, entered at the trial level. The buyer appeal. The appellate court ruled that genuine issues of material fact existed, and that summary judgment should not have been granted. Reversed. Translation: there is disputed fact about whether or not the seller tried to frustrate the sale, or whether she should have helped get the condo board to approve the sale. This case goes back to the trial court for more proceedings. A trial.
What would be interesting to learn is: 1) how much more money did the seller want? 2) how much money did the buyer and seller pay their attorneys at the trial level and at the appeals court? 3) will the appeals court permit the recovery of attorneys fees? 4) what does the contract say about recovery of attorneys fees if there is a dispute?
Lessons from this real estate appeal in Florida? Sellers have obligations under Florida contract law. You just can’t, necessarily, walk away from a contract and leave the buyer hanging. It could end up being very expensive.
Here is a free link to read the entire appeals court opinion on this Florida real estate lawsuit: http://www.2dca.org/opinions/Opinion_Pages/Opinion_Pages_2017/June/June%2016,%202017/2D16-3665.pdfhttp://www.2dca.org/opinions/Opinion_Pages/Opinion_Pages_2017/June/June%2016,%202017/2D16-3665.pdfhttp://www.2dca.org/opinions/Opinion_Pages/Opinion_Pages_2017/June/June%2016,%202017/2D16-3665.pdf