Backing out of a New Jersey real estate contract: Lawyer needed
March 30, 2024
Real estate contracts are fully binding legal documents intended to protect both parties throughout a real estate transaction. For a good reason, these contracts are difficult to get out of. Real estate transactions are typically some of the most high-stakes financial and legal processes most of us will ever go through. Having a contract establishes rules and expectations for the transaction to ensure things go smoothly and everyone follows the law. So, if you want to get out of a New Jersey real estate contract, you will need to work with an experienced lawyer who understands contract law as well as local real estate laws.
Breaching a real estate contract can have serious, far-reaching financial and legal consequences. You do not want to break the contract without legal cause to do so. That said, an experienced attorney can help you find legitimate ways to get out of a real estate contract. Here are some of the ways an attorney can help you out of your contract after it is signed:
1. Attorney Review
All real estate contracts in New Jersey are subject to the attorney review period. This begins once both parties have signed the contract and lasts three days. The intention of this review period is for both parties to have the chance to give the contact to their lawyer for review. Your real estate attorney may find issues with this contract upfront or advise you to add specific clauses and conditions to protect your interests throughout the transaction.
It is possible to back out of the contract at any point during the attorney review period, which makes it one of the easiest ways to get out of a real estate contract. While you are not obligated to have an attorney review your contract during this time, it is advisable. Once the attorney review period is over, you must abide by whatever terms are laid out in the contract.
2. Breach of Terms
Every real estate contract includes terms and conditions that must be met for the transaction to progress. The buyer and seller will have to meet specific requirements laid out in the contract. If one of the parties fails to uphold their end of the agreement, they could be considered in breach of the terms. This would allow the other party to get out of the contract through no legal fault of their own. Many of these terms come with due dates, which, if missed, can give you options to terminate a contract.
For example, your contract states that the seller must perform a mold inspection by a certain date. The date comes and goes, and the seller has not performed the inspection. This could give the buyer the opportunity to back out of the contract completely. Typically, being behind on dates by a few days is not a deal breaker for either party, and the sale continues to progress without incident. But if you are looking for an out, these dates could be your key.
3. Unfulfilled Contingencies
Some contingencies are added to most real estate contracts. These are items on top of the typical boilerplate terms and conditions that must be addressed for a real estate transaction to go through. Buyers and sellers can establish their own contingencies. While you can dispute contingencies prior to signing the contract, once a contract is signed, these contingencies must be met for the sale to go through.
If one party is unable to or unwilling to hold up their end of the contingency agreement, they could be considered in breach of contract. So, for example, the buyer can include a contingency that if a home inspection uncovers any significant issues, the deal is off. If the home inspection reveals major repairs, structural damage, or other costly maintenance that was not previously disclosed, the buyer can back out.
Typical contingencies include financing, inspections, and even the timing of purchasing or selling other property. Whatever the contingency is, once agreed to, it is legally binding for both parties. Failure to uphold the contingency is an opportunity to end the contract. A good attorney will be able to review the contingencies in your contract to determine if you have any grounds for backing out based on unfulfilled contingencies.
Once a contract has been signed, both parties are legally bound to its terms. If you have already signed a real estate contract and need to get out, a real estate attorney can help. Veitengruber Law has an experienced real estate attorney on staff with a deep knowledge of NJ real estate laws. We can help you work through the complexities of getting out of your NJ real estate contract.