What to Do When a Commercial Property Buyer Fails to Deliver

Selling commercial property can be a long, detailed process—and when a buyer suddenly backs out or fails to deliver on their promises, it can leave you frustrated, uncertain, and potentially out of pocket. Whether it’s a missed deposit, financing issues, or outright withdrawal, knowing how to respond can protect your investment and get your sale back on track.

1. Review the Contract

The first step is to go back to the signed purchase agreement. Commercial real estate contracts often include specific timelines, contingencies, and remedies if one party defaults. Check for:

• Deposit terms: Is there an earnest money deposit, and what conditions allow you to keep it?
• Financing contingencies: Did the buyer’s failure stem from not securing financing within the agreed period?
• Default clauses: These outline what happens if the buyer breaches the agreement—whether that means forfeiting deposits, paying damages, or allowing you to terminate the deal.

If the contract is clear that the buyer is in breach, you’ll have a solid basis for next steps.

2. Contact the Buyer or Their Agent

Before escalating, it’s worth reaching out directly. Sometimes, a missed payment or delay has a legitimate cause—bank errors, document processing issues, or unexpected short-term setbacks. Open communication can sometimes save the deal or at least clarify what went wrong.

If the buyer intends to continue but needs more time, you can negotiate an extension in exchange for additional assurances—like a larger deposit or proof of financing. Document everything in writing.

3. Involve Your Real Estate Attorney

If communication fails or the buyer is unresponsive, it’s time to consult your attorney. They can formally notify the buyer of default, enforce contract terms, and advise on your right to retain deposits or pursue legal remedies.

In some cases, the buyer’s breach could entitle you to liquidated damages or even a lawsuit for losses, especially if the property sat off the market for months while under contract. Having an attorney handle this protects your rights and ensures every step follows legal protocol.

Read more: What Does a Real Estate Attorney Do?

4. Consider Relisting the Property

If the sale has fallen through completely, your next move is to relist. Before doing so, discuss with your broker how to reposition the property. You may want to:

• Reassess pricing based on current market conditions
• Tighten buyer vetting—verify proof of funds and lender commitment early
• Request larger earnest money deposits or shorter contingencies to discourage unserious offers

These adjustments can help prevent a repeat of the same problem.

5. Learn from the Experience

While a failed sale can be discouraging, it’s also an opportunity to refine your selling process. Working with experienced commercial brokers and legal advisors can make a big difference in screening buyers and structuring more protective contracts.

Conclusion

A buyer’s failure to deliver doesn’t have to derail your plans. With the right mix of legal guidance, clear documentation, and practical follow-through, you can recover quickly and move forward with confidence toward a new, more reliable deal.

For legal help in California and your other needs, contact BERYS LAW on this page. We also offer courses on real estate investing, landlording, and templates right here!