When you first invested in California real estate, you may have pictured an easy business model that could grow your wealth. Real estate investments can be exactly that, but only when other entities follow through on keeping the terms of real estate contracts.
When another entity breaks a real estate contract, the options available to you depend on the jurisdiction and the laws affecting it. Even minor details in your case can make a difference in available remedies, but two main solutions exist.
Monetary damages
According to the Houston Chronicle, when another entity fails to hold up its end of a real estate agreement, you might have the opportunity to claim monetary damages. If successful, this results in you receiving cold hard cash that you can use to pay for damages suffered as a result of the deal not going as planned. Here are some common expenses real estate investors recoup costs for:
- Mortgage application fees
- Title search costs
- Property inspections
Equitable remedies
If you prefer to push forward with the original contractual agreement, you might successfully persuade a court to enforce the contract. These generally do not involve monetary claims, but enforcing the contract might make or save you money. Injunctions also form part of equitable remedies. Courts might issue injunctions on your behalf to stop entities from damaging property or committing other acts.
Finance gurus often attempt to pass real estate investment off as passive income. While it certainly has the potential to generate passive income, more hands-on investors tend to make more money. That said, hands-on involvement also means potentially tackling occasional instances of dishonesty and negligence in business relationships.