Latest Information

Specific Performance

13/04/2010

Many property investors and developers have suffered with the effects of the recent recession and economic downturn.

Scarce bank lending, tight cash flows, plummeting property prices, negative equity and defaulting creditors have all added to the woes of those involved in the property market and presented what is arguably one of the most challenging economic environment in decades.

Furthermore, in times where most of us are looking to tighten our belts and cut down on spending, there has been a worryingly increasing trend in property buyers simply pulling out of deals after a contract to purchase has been entered into. Buyers who refuse to complete purchases leave developers in major difficulty; with half empty properties which are often mortgaged to a lender and a shortfall in expected income from transactions.

"While some developers will immediately start looking to plug the gap by quickly reducing the purchase price and finding a new buyer, many overlook the principal of Specific Performance" comments Litigation Solicitor Stephen McArdle. "Specific Performance is an equitable and discretionary remedy of the court imposed on a defaulting contracting party. In a property context, the court can compel a buyer who has failed to complete to specifically perform or honour the terms of the contract to purchase."

"Specific performance is usually ordered when damages are an inadequate compensation for the breach of contract; this means it can be an ideal remedy against defaulting buyers in a falling property market."

The Commercial Litigation team at KBL have had recent experience in handling specific performance claims in a property context on behalf of clients. We have had several recent successes relating to properties valued between £250,000 and £3.5 million.

For further information please contact Michael Slater head of Litigation.