Can a Court Force a Colorado Real Estate Sale to Close? Understanding Specific Performance
Sometimes one side of a real estate deal simply refuses to close. A seller gets a better offer, or a buyer changes their mind. The other side often asks: can I make them go through with it? In Colorado, the answer is sometimes yes, through a court remedy called specific performance. It is also a remedy with real limits, and the purchase contract often decides whether it's available at all.
What is specific performance?
Specific performance is a court order requiring a party to do what the contract says. In a real estate case, that usually means ordering the seller to deliver the deed or, less often, ordering the buyer to pay for the property. It differs from money damages, which compensate a party for the loss instead of enforcing the deal.
Because courts have traditionally treated each parcel of land as unique, money damages often aren't considered a full substitute when a seller refuses to convey. That is why specific performance comes up more often in real estate than in most other contract disputes.
Specific performance is discretionary
Specific performance is an equitable remedy, and the Colorado Supreme Court has long said that granting or refusing it rests largely in the court's discretion. In Hill v. Chambers (1957), the court described some of the basic requirements. The contract must be clear and free from ambiguity, and the property must be described with enough certainty to identify it. In that case, the court upheld specific performance of an oral promise to convey land, where the buyers had built a house on it in reliance on the promise.
In practice, a court will look at whether the contract is definite and enforceable, whether the party seeking specific performance did what the contract required of them, and whether ordering performance would be fair under the circumstances.
What the standard Colorado contract says
Most Colorado home sales use the Colorado Real Estate Commission's standard residential contract, which addresses specific performance directly.
When the seller defaults
If the seller fails to perform, the standard contract gives the buyer a choice. The buyer may cancel the contract, get the earnest money back, and seek damages. Or the buyer may treat the contract as still in effect and seek specific performance, damages, or both.
When the buyer defaults
The seller's remedies depend on a check box. Unless the parties select the alternative, the earnest money is the seller's liquidated damages and sole remedy. That means the seller gives up the right to specific performance and to additional damages. If the parties select the alternative option, the seller may instead pursue other remedies, which can include specific performance or actual damages.
For most residential sellers, then, the practical remedy against a defaulting buyer is keeping the earnest money, not forcing the buyer to close.
Does the buyer have to prove they could have closed?
Generally, yes, but not necessarily by showing up at closing with the money. In Clark v. Scena (2003), the sellers cancelled a few days before closing. The buyer sent a letter confirming he was ready to proceed, but nobody appeared at closing. The Colorado Court of Appeals held that, for a purchase and sale contract, the buyer's failure to formally tender payment was not by itself fatal to his specific performance claim. The question was whether the buyer was willing and able to close at the time set by the contract. His financial ability was relevant evidence but not the only factor. The court also noted that when time is of the essence, that question is measured at the original closing date.
The lesson for buyers is practical. If a seller signals they won't close, document your readiness in writing, keep your financing in place, and be prepared to prove you could have closed on time.
Recording a lis pendens
A buyer suing for specific performance often records a notice of lis pendens with the county clerk and recorder. Colorado law allows a party to record one after filing a pleading in a court action that seeks relief affecting title to real property. Once recorded, the notice gives constructive notice to anyone who later acquires an interest in the property that the lawsuit may affect them. In practical terms, it makes it very difficult for the seller to sell or refinance to someone else while the case is pending.
A lis pendens should be used only when the lawsuit actually seeks relief affecting title. Recording one improperly can expose the recording party to liability.
Mediation, attorney fees, and time
Under the standard contract, the parties must first try mediation in good faith before starting arbitration or litigation. In litigation or arbitration relating to the contract, the prevailing party is entitled to reasonable costs and attorney fees. That makes the strength of the claim especially important, because the losing side may pay both sides' fees.
Specific performance cases can also take time. A buyer pursuing one needs to be prepared to keep financing and plans flexible while the case proceeds.
Hypothetical example: A seller signs the standard contract to sell a house for $600,000. Two weeks before closing, the seller receives a $650,000 offer and tells the buyer the deal is off. The buyer confirms in writing that she is ready to close, keeps her loan approval current, requests mediation, and, after mediation fails, sues for specific performance and records a lis pendens. If the court finds the contract enforceable and the buyer willing and able to close on the scheduled date, it may order the seller to convey the property at the contract price. The prevailing party may also recover attorney fees under the contract. The result would depend on the evidence, the court's discretion, and any defenses the seller raises.
Practical steps
If you're a buyer facing a seller who won't close:
Don't assume the deal is over. Respond in writing and confirm your readiness to close.
Keep financing and funds in place and document them.
Follow the contract's notice and mediation requirements.
Get legal advice quickly about specific performance and a lis pendens.
If you're a seller who wants out:
Understand that refusing to close may expose you to a specific performance action, damages, and attorney fees.
Look first for a legitimate contractual right to terminate, or negotiate a written mutual release.
The bottom line
In Colorado, specific performance can force a real estate sale to close, but it is a discretionary remedy that depends on a clear contract, a party who did their part, and the contract's own remedy terms. Under the standard contract, buyers facing a defaulting seller can seek it. Sellers facing a defaulting buyer generally cannot unless the parties chose that option.
This article provides general information about Colorado law and the Colorado Real Estate Commission's standard residential contract. It is not legal advice, and reading it does not create an attorney-client relationship with Proper Tea Law. Laws and Commission forms change, and whether specific performance is available depends on the contract and the facts. For advice about your situation, consult an attorney licensed in Colorado.