Suing for Specific Performance in Ontario Real Estate: When Courts Order a Sale to Complete

Most legal remedies for a broken contract are financial — you get money, not the thing you bargained for. Specific performance is different: it is a court order compelling the defaulting party to actually complete what they agreed to do. In real estate, that usually means ordering a seller who is refusing to close to hand over the keys and accept the purchase price.

In Ontario, specific performance is a recognized remedy for real estate breaches, and courts have granted it in residential transactions. But it is an equitable remedy — meaning courts have discretion, and they will not grant it automatically. This article explains when specific performance is available, how to pursue it, and when a damages claim may serve you better.

Why Real Estate Is Different From Other Contracts

In most commercial contracts, if you don't get the widget you ordered, you buy the same widget somewhere else and sue for the price difference. The law views most goods and services as interchangeable.

Real estate has long been treated differently. Courts once regarded every piece of land as unique; today they no longer assume it, and the buyer has to show that a substitute property would not be readily available. If there is no truly comparable substitute, money damages cannot adequately compensate the buyer for the loss of this particular property.

The Test for Specific Performance in Ontario

Courts in Ontario consider several factors before granting specific performance:

1. Uniqueness of the Property

The buyer must demonstrate that money cannot adequately compensate for losing this property. In practice, courts look at:

• Whether comparable properties are available on the open market at a similar price
• Whether the property has special features, location advantages, or sentimental significance that cannot be replicated
• Whether the real estate market has moved significantly since the agreement was signed (making replacement genuinely more expensive)

In a hot market where prices have risen sharply after signing, a buyer may find it genuinely impossible to purchase a comparable property at the agreed price. This strengthens the uniqueness argument considerably.

2. Readiness, Willingness, and Ability to Close

The buyer seeking specific performance must demonstrate that they were — and still are — ready, willing, and able to complete their side of the bargain. This means:

• Financing was in place at the time of the breach
• The purchase price was or is available
• The buyer has not done anything to repudiate their own obligations

A buyer who couldn't actually fund the purchase cannot claim they were ready to close.

3. Balance of Convenience

Courts apply an equitable balance: they consider the behaviour of the parties and weigh the equities at play in the transaction. If the seller has already transferred the property to an innocent third-party purchaser, specific performance against the original seller becomes problematic (though the buyer may have separate claims).

4. Clean Hands

Equity requires that the party seeking specific performance have acted in good faith throughout. A buyer who tried to repudiate their own obligations, or who engaged in sharp dealing during the transaction, may find the court unsympathetic.

The Certificate of Pending Litigation (CPL)

When a buyer launches a specific performance claim, the single most important immediate step is registering a Certificate of Pending Litigation on title. The CPL is a notice on the land registry that a legal proceeding is pending affecting the property.

A registered CPL:

• Makes a sale to anyone else practically impossible — a new purchaser would take subject to the litigation, so no sensible buyer or lender will close; strictly, the CPL is notice rather than a legal bar (CJA s. 103)
• Effectively freezes the property until the matter is resolved
• Signals to the seller and any prospective buyers that the title is encumbered

Without a CPL, the seller may quickly transfer the property to a third party — and once that happens, specific performance becomes legally and practically much harder to obtain.

To register a CPL, your lawyer commences the court action and registers the certificate on title. Courts can order a CPL removed if the underlying claim is not bona fide, so it is important to have a strong basis for the claim before registering.

Specific Performance vs. Damages: Choosing Your Remedy

Specific performance and damages in place of it are generally alternative remedies, and you must ultimately elect one (though you can keep both alive early in litigation). A court that orders specific performance can also award damages in addition to it.

Consider pursuing specific performance when:

• You genuinely want this particular property (not just compensation)
• Comparable properties are unavailable or significantly more expensive
• You can afford to litigate (specific performance cases can take months or longer)
• The seller is otherwise capable of completing the transaction

Consider pursuing damages instead when:

• You have found a comparable replacement and want to quantify your loss
• The delay involved in litigation makes specific performance impractical
• The property has declined in value (you'd rather not be stuck with a property now worth less than the agreed price)
• The seller has transferred to a bona fide purchaser, making specific performance unavailable

Specific Performance in Favour of Sellers

Sellers rarely seek specific performance against buyers (forcing a buyer to purchase). The primary seller remedy for buyer default is damages. Courts are reluctant to compel someone to buy property they don't want — and practically, a forced sale to a hostile buyer creates ongoing disputes. Sellers who want specific performance face significant hurdles and typically achieve better results through a damages claim.

Frequently asked questions