If a contract for the sale of a specific property is breached by the seller, a buyer may obtain possession of the goods by court order. This remedy is known as specific performance. In a recent Iowa case, the long-time tenant thought he had a valid contract to purchase agricultural land. He sued to enforce the alleged contract. The court disagreed, finding he did not have an enforceable contract entitling him to specific performance.
The facts of the case were undisputed, a parcel of agricultural land was held in tenancy in common between a brother, sister, and their mother. The mother passed away and her children inherited the mother’s undivided interest in the land. The sister was the executor of the mother’s estate. The sister had to power to sell the estate’s property without court approval based on the language in the will. The brother and sister agreed to sell the property after their mother’s death. They also agreed the current tenant who had rented the land for 20 years was the best prospect to purchase the property. As a result, the brother began negotiating with the tenant as a potential buyer. The brother and the tenant came to an agreement. The brother completed an “Offer to Sell” and both the brother and the tenant signed it. The document was sent to the sister, as executor, for her signature, but she never signed it.
The sister eventually sold the property to a third party, and the tenant sued to enforce the Offer to Sell. The district court dismissed the suit because the sister as executor was the only person authorized to sell the property. The tenant then sued to have the court require the sale of the brother’s one-half interest in the property, but the court denied the tenant’s request for specific enforcement. The tenant appealed.
On appeal, the appellate court affirmed. The court held that the mother’s will gave only the executor the authority to sell real estate without court approval. The sister, as executor, never signed the Offer to Sell, so there was never any contract between the tenant and the executor for the court to enforce. The fact that the tenant believed the brother had authority to negotiate and bind the estate was irrelevant, because the executor cannot delegate the power to sell the property to another person without a court order.
The court also held that the tenant could not acquire the brother’s one-half interest in the property because the sale was for the whole of the property, which the brother had no authority to sell. The brother could not sell his individual portion of the property without the court’s approval for partition, so the brother’s interest in the land could not be sold through the Offer to Sell alone.
For individuals negotiating the purchase of property, it is important to ensure the party with whom they are negotiating actually has the power to make a binding agreement. This becomes particularly important when an estate is involved in the process. Granzow v. Doser, No. 2-148/11-1376, 2012 WL 1066479 (Iowa Ct. App. Mar. 28, 2012).