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The appellate court sided partly with each side. It agreed the lower court properly rejected the sellers' bid to keep the down payment and collect attorney's fees. But it reversed the part of the ruling that had already decided, as a matter of law, that the buyers properly terminated the contract and were owed specific performance and a declaration in their favor. The court found there were still factual disputes that needed to be resolved, so this issue could not be decided through summary judgment. It also reversed the ruling that had granted the buyers summary judgment on breach of contract damages, sending that question back for further proceedings.
In 2017, buyers agreed to purchase a home for $6,250,000. They paid a $625,000 down payment, held in escrow by the seller's attorney. Before closing, the parties found unrecorded deeds from a past 'land swap' with a neighbor. This created title defects. The closing was delayed. The sellers later set a 'time of the essence' closing date, meaning both sides had to close by that date or face consequences. Title problems and issues with a right-of-way access still were not fixed. The buyers' title company flagged more defects. The buyers then sent a letter ending the contract and asking for their deposit back. The sellers refused and tried to schedule another closing.
The main question was whether the buyers had the right to cancel the contract based on unresolved title defects. A second question was whether the buyers were entitled to summary judgment on their breach of contract damages claim without a full hearing on disputed facts.
This case shows how contract clauses about title defects and 'time of the essence' deadlines can create disputes when problems with a property's title surface late. It highlights that courts often need a full hearing, not just paperwork, to decide who properly canceled a real estate contract and who is entitled to a deposit.
Talk to a licensed real estate lawyer in New York.