You’ve been working on this project for over a year. It’s an assemblage of several lots that, once purchased, will allow you to build that new shopping center complex. You’ve finally got the last property parcel into contract. It’s the key to development. Your due diligence is complete. Your funding secured. You are almost ready to close. Then the seller — dies. Oh, crap. Now what?
Sometimes the heirs will simply agree to move forward with the sale. Sometimes, not. When it goes wonky, remember, Probate Code § 850. It sets out the steps you can follow to bring a claim for specific performance. It can allow you to avoid the need to bring an independent and separate lawsuit against the Estate of the seller.
As the buyer, you’ll need to show 1) mutuality of remedy, 2) that the legal remedy (damages) is inadequate, 3) that the contract was indeed signed by the dead seller, and 4) that the terms of the contract are ‘certain.’ What might be ‘uncertain?’ Well, the argument is that the ‘price’ was not ‘certain’ enough.
An example can be found in Estate of Quackenbush, 53 Cal.App.3d 751. In that case, the tenant had a ‘right of first refusal’ to purchase a property. The seller/landlord had died, and the tenant tried to exercise that first refusal right.
The heirs said, “No.” The heirs won. Why?
Because, while the tenant had the right to make an offer, there was no fixed price at which the tenant’s offer had to, or could, be made which would bind the seller. It was only the right to make an offer. It was NOT an option to purchase at a pre-determined price. Uncertain price – equals no “right” to buy.
