In the recent legal decision of Wolfe v. 224 Via Marila, LLC, the Fourth District Court of Appeals in Florida ruled that whether the seller substantially performed their obligations under a real estate contract where the contract provided for the delivery of documents was a question for the trier of fact. This decision could potentially impact both buyers and sellers in Florida real estate transactions.

The case centered around a real estate contract between Rosemarie Wolfe (the seller) and Charles Willis (the buyer), who later assigned the contract to 224 Via Marila, LLC. The contract required the buyer to obtain and deliver a title insurance commitment to the seller at least five days before closing, along with legible copies of any instruments listed as exceptions. The seller timely provided the title commitment and copies of the exceptions to the buyer by email, with the title commitment also containing hyperlinks to the documents.

However, the contract was later amended to extend the closing date by one year, and the title commitment expired before the new closing date. Two weeks before the new closing date, the buyer’s attorney informed the seller’s attorney that the buyer no longer wanted to close due to the financial impact of the pandemic. The seller’s attorney then sent an updated title commitment indicating that the seller was ready to close and that their counsel was available for questions or comments.

The buyer attempted to invoke the force majeure clause but did not mention the title commitment. Four days before the new closing date, the buyer objected to the title commitment because legible copies of the exception documents were not included with the updated commitment. The seller’s attorney argued that the commitment had not changed from the one sent a year before and that the exception documents had been provided by hyperlink. When the buyer did not close, the seller’s attorney sent a notice of default and elected to recover the earnest money deposit as liquidated damages.

The trial court granted the buyer summary judgment, finding that the addendum reset the contractual obligations and that the seller had not attached legible copies of the exceptions to the updated title commitment. On appeal, the seller argued that they substantially complied with the terms of the contract by electronically delivering the title commitment and copies of the exception documents. The buyer argued that the seller was required to attach the documents to the updated commitment.

The Fourth District Court noted that substantial performance is “that performance of a contract which, while not full performance, is so nearly equivalent to what was bargained for that it would be unreasonable to deny the promisee the full contract price subject to the promisor’s right to recover whatever damages may have been occasioned him by the promisee’s failure to render full performance.”

Ultimately, the court ruled that whether the seller substantially performed their obligations under the contract was a question for the trier of fact. It also found that the seller’s argument that the buyer anticipatorily breached their rights by telling the seller’s attorney that they did not want to close due to the pandemic was not supported by the evidence. The court therefore reversed the trial court’s grant of summary judgment in favor of the buyer and remanded the case for further proceedings.

This decision could have significant implications for both buyers and sellers of real estate in Florida. For sellers, it emphasizes the importance of strictly complying with the terms of their contracts, including any provisions related to the delivery of documents. Failure to do so could potentially result in the seller being unable to recover damages or the earnest money deposit in the event of a default by the buyer.

For buyers, this decision reinforces the need to carefully review and scrutinize any documents provided by the seller, including the title commitment and any attached exceptions. It also highlights the importance of timely raising any objections or concerns about the seller’s performance. As they say: use it or lose it.