Real estate has one damages remedy commercial deals often don’t — because no two properties are the same.
Short answer
The seller has three real options, and none of them are automatic. They can sue for damages — generally the gap between the contract price and what the property actually resells for, plus carrying costs — pursue the rarer remedy of specific performance forcing the sale through, or make a claim against the deposit. On that last point: a brokerage will not release a forfeited deposit to the seller without either the buyer’s written consent or a court order.
Ordinary compensatory damages aim to put the injured party “in the position they would have occupied had the contract been performed” — but real estate carries a remedy most commercial contracts don’t get, because of what the property actually is. As treadstonelaw.ca puts it: “the classic case is a contract to purchase land or a unique piece of property — because every parcel of real estate is considered unique, damages cannot perfectly substitute for the thing promised.” A companion piece on breach of contract confirms the same logic from the buyer’s-refusal angle directly: “because no two properties are identical, a court may order the seller to complete” a sale — the reverse applies to a defaulting buyer being ordered to close.
Even where the buyer has waived every condition and simply fails to close, forfeiture is never automatic — the brokerage holding the deposit in trust won’t release it to the seller without the buyer’s written consent or a court order. Where the two sides disagree, the brokerage can file an interpleader application, paying the disputed funds into the Ontario Superior Court of Justice and stepping out of the dispute entirely — and a contested deposit can then sit tied up for months, sometimes longer.
Whichever remedy a seller pursues, the recoverable amount is capped by what they reasonably could have avoided. Per treadstonelaw.ca, a seller “cannot sit back, let damages mount, and expect the other side to pay the full” amount — courts reduce an award by whatever a prompt relisting and a reasonable resale effort would have saved. In practice this means a seller who drags out relisting the property, hoping to maximize a damages claim, is working against their own recovery, not toward it.
See also: how deposit size and custody actually work and the deposit-handling guide.
A short call can help map which of these three levers actually fits the file in front of you.
