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Adams v. Barrera

A-0254-04T5 (N.J. Super. App. Div. 2005) (Unpublished)

CONTRACTS; SPECIFIC PERFORMANCE—A sharp rise in the value of a property after the contract is signed is not a hardship that should preclude an order of specific performance.

Buyers sued their sellers for specific performance of their contract to purchase a condominium unit. The lower court granted the buyers specific performance compelling the sellers to sell the unit to them. The lower court also awarded damages to the buyers. The Appellate Division reversed, finding that the lower court had failed to fully and accurately assess the circumstances surrounding the formation of the contract during the due diligence period. The sellers had claimed that they believed that the buyers’ attorney was also representing them. The Appellate Division found that, prior to awarding specific performance, the lower court should have determined what the sellers understood the buyers’ attorney’s role to be and whether, under those circumstances, it was equitable to award specific performance. On remand, the lower court once again determined that specific performance was appropriate. The lower court found that the buyer’s attorney only represented the buyers and that the scope of his representation was made clear to both the buyers and sellers. The sellers appealed again, but, this time, the Appellate Division affirmed. It rejected the sellers’ contention that the buyers’ attorney represented both buyers and sellers and that the conflict of interest excused the sellers’ performance. The Court gave great weight to the lower court’s findings that the buyers’ attorney only represented the buyers and that the scope of his representation was made clear to the sellers. The Court also rejected the sellers’ claim of hardship. The sellers argued that specific performance should not be ordered because the value of the condominium unit had increased substantially since the contract was executed. The Court held that an increased value of the property is not a hardship that excuses specific performance.

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