On April 18, 2018, Justice Ash of the Kings County Commercial Division issued a decision in Silvershore Props. LLC v. Dunning, 2018 NY Slip Op. 30715(U), denying specific performance of a contract to sell real property, explaining:
Typically, a contract is not breached until the time set for performance has expired. To prevail on a cause .of action for specific performance of a contract for the sale of real property, a plaintiff purchaser must establish that it substantially performed its contractual obligations and was ready, willing, and able to perform its remaining obligations, that the vendor was able to convey the property, and that there was no adequate remedy at law.
Before specific performance of a contract for the sale of real property may be granted, a purchaser must demonstrate that it was ready, willing, and able to perform on the original law day or, if time is not of the essence, on a subsequent date fixed by the parties or within a reasonable time thereafter. However, when a purchaser submits no documentation or other proof to substantiate that it had the funds necessary to purchase the property, it cannot prove, as a matter of law, that it was ready, willing, and able to close.
In the present matter, the court finds that the parties agreed to waive their original closing for June 24, 2014, however, the parties failed to establish a new closing date whereby performance would be due. Furthermore, the court finds that Plaintiff is not entitled to specific performance due to its inability to show that ii was ready, willing and able to purchase the property on the closing date set forth in the contract or a reasonable time thereafter. The court reasons similar to the court in Internet Hames, Inc. v Vilul/i, 8 AD3d 438, 439 [2d Dept 2004], in finding
that even assuming that the defendants improperly cancelled the contract, the plaintiff still bore the burden to show that it had the financial capacity to purchase the property. The plaintiff’s unsubstantiated assertions that a line of credit could be secured or that a closely-related corporation would supply the funds and the conclusory allegation that it was ready, willing, and able to perform were insufficient to satisfy its burden. It should also be noted that Plaintiff never obtained a loan commitment for the remaining amount required to purchase the property.
(Internal quotations and citations omitted).
We frequently litigate disputes over the purchase and sale of commercial property. Contact Schlam Stone & Dolan partner John Lundin at firstname.lastname@example.org if you are involved in a dispute regarding a commercial real estate transaction.
Click here to subscribe to this or another of Schlam Stone & Dolan’s blogs.