If you are attempting to buy a home and the seller backs out of the purchase, you generally have two options available to you: a damages action for a breach of contract or a suit to enforce the contract and sale of the home (ordinarily, you cannot obtain both). This is, of course, if you have a binding contract in place; without one, there may be nothing to enforce.

A buyer’s recoverable damages are determined by the contract itself or by the law. If there is no contract provision determining damages for a breach, the law allows the buyer to recover the following for a seller’s breach to convey title to real property:

• The price paid
• Expenses incurred in examining title and preparing necessary papers
• The “market-contract differential,” i.e., difference between the agreed upon price and value of the property agreed to be transferred at the time of breach
• Expenses incurred in preparing to enter the land
• Consequential damages according to proof, i.e., reasonable and foreseeable expenses incurred in executing the contract such as developer costs
• Interest

Before pursuing an action as the buyer, however, you must “tender” performance, i.e., you must demonstrate you are ready, willing, and able to pay the purchase price under the contract. This is required unless the seller breaches before performance is due under the contract and the transfer of title is rendered impossible.

It is important to remember that each situation is unique and requires a full analysis of each option before determining which is best in your case and what damages may or may not be available.

Similar to if a buyer backs out, you generally have two options: a damages action for a breach of contract or a suit to enforce the contract and sale of the home. Typically, however, sellers rarely seek to enforce the contract and will seek monetary damages.

Many factors can go into determining your options such as: whether there is an enforceable contract if the home’s value increased or decreased during this time if a subsequent sale made up for the losses or created a loss, and when the property value is calculated.

Seller’s damages are limited either by the contract itself or by law. If there is no provision in the contract for a breach, the law states that an aggrieved seller is entitled to recover:

• General damages, i.e., the excess (if any) of the amount that would have been due under the contract less the value of the property to you;
• Consequential damages, i.e., reasonable and foreseeable expenses to make the seller whole such as expenses incurred in finding a new buyer
• Interest

It is important to take the factors (and more) into consideration when choosing whether to pursue a claim. If the market is fairly stable or the property appreciates, it is unlikely there is any general damage suffered under the law.

Under California law, a landlord must maintain rental property in a condition fit for human beings. The Warranty of Habitability is implied in every residential lease in California.
Examples of the Warranty of Habitability (Civil Code Section 1941.1) include:
1. Effective water and weather protection of roof, exterior walls, windows, and doors.
2. Plumbing or gas facilities that conform to code at time of installation, maintained in good working order.
3. Hot and cold water supply to appropriate fixtures and connected to a sewage disposal system.
4. Proper heating facilities in good working order.
5. Proper electrical lighting, wiring, and electrical equipment.
6. Sanitary building and grounds maintained free of trash, garbage, rodents, and vermin.
7. Adequate number of receptacles in good condition for garbage.
8. Floors, stairways, and railings maintained in good repair.
While this is what the California code specifically states, examples of a failure to provide a habitable residence may extend beyond these examples.

If you believe that you have a habitability issue, you should immediately contact your landlord in writing to document the problem. If the landlord doesn’t fix the problem you should contact a landlord-tenant attorney to evaluate your options. We offer a free case evaluation.