To Force a Sale in Court, Buyers Must Be 'Ready, Willing and Able'

Q I signed a contract to buy a condominium unit in the District, but the seller apparently has changed his mind. I think I am getting a good deal and don't want to let him off the hook. What remedies do I have?

AStart by reviewing your sales contract. Most residential transactions in the Washington area use the regional sales contract, prepared by Greater Capital Area Association of Realtors.

Paragraph 26 spells out what happens should either the buyer or the seller default.

Referring to a seller default, the standard contract states: "If Seller fails to perform or comply with any of the terms and conditions of this Contract or fails to complete Settlement for any reason other than Default by Purchaser, Purchaser will have the right to pursue all legal or equitable remedies, including specific performance and/or damages."

Some sellers attempt to modify this to read that should the seller default, the buyer's only remedy is to receive a refund of the earnest-money deposit. I cannot recommend that buyers accept such a modification because this language basically would give the seller the right to sell the property for a higher price to a third party, without any obligation to the original buyer except returning the deposit.

In a specific-performance lawsuit, one of the remedies under the standard contract, you would go to court and ask the judge to order the seller to proceed. To sue for specific performance, you as a plaintiff must tell the court that you are "ready, willing and able" to go to settlement.

The D.C. Court of Appeals recently handed down a decision that should be instructive for all parties to a real estate transaction. Toxi Clark entered into a contract to buy a house in the District from James and Joyce Route. The contract required the sellers to complete a number of items before settlement. The parties had a walk-through inspection of the property two days before the scheduled settlement, and the plaintiff found that one item dealing with waterproofing had not been done.

Clark, upon learning that the sellers did not intend to complete the waterproofing work, told them, "see you in court" and walked out. Clark postponed the scheduled settlement and put her loan application on hold.

Shortly after, Clark sued the sellers for specific performance; she did not ask for any money damages. The lower court ruled against her. She appealed to the District's highest court.

On July 3, the appeals court affirmed the denial in Clark v. Route.

The trial court had the right to determine whether a plaintiff was, in fact, "ready, willing and able" to settle, according to the appeals court. Unless she met that test, she would not be eligible to win the specific-performance suit.

The facts of the case persuaded the appeals court to uphold the trial court's ruling. The court found that by not going to settlement and by putting the loan "in limbo," Clark had unilaterally modified the contract. It did not accept Clark's argument that the sellers had breached the contract.