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Applying 'Part Performance' In Practice
In my 27 years as a real estate litigator, until recently, I have never used the sword of part performance as much as I have been relying on it now. One of the reasons is the extreme desire of the real estate investor to get rich quickly at the expense of everyone else using deliberate cunning, deceitful actions. Another common trait in these actions has been a problem with the language barrier of the other real estate party from another country. I also believe that some of the new real estate entrants are not as street smart or educated on the rules of the game as their predecessor real estate investors, allowing them to be taken advantage of. In addition, real estate players may not be working as hard as their parents to do their due diligence and paper deals. As far as their advisors, the number of qualified real estate attorneys and advisors may be lacking as very few real estate attorneys came into existence during the years between 2008 and 2012. Ergo, the rules of part performance must be understood and asserted in more cases.
However, it is a difficult doctrine to prove as we learned in a recent case last year, Toobian v. Golzad, 193 AD3d 778, 780, 147 NYS 3d 61 (2d Dept. 2021), that proper planning can turn a losing case into a winner:
The doctrine of part performance is not easily applied in practice. A party who relies on the part performance exception must demonstrate that his or her actions are "unequivocally referable" to the oral agreement which he or she seeks to establish. "Unequivocally referable" conduct is conduct which is inconsistent with any other explanation. It is insufficient that the oral agreement gives significance to plaintiff's actions. Rather, the actions alone must be unintelligible or at least extraordinary, explainable only with reference to the oral agreement. Significantly, the doctrine of part performance is based on principles of equity, in particular, recognition of the fact that the purpose of the Statute of Frauds is to prevent frauds, not to enable a party to perpetrate a fraud by using the statute as a sword rather than a shield. Toobian v. Golzad, 193 AD3d 778, 780, 147 NYS 3d 61 (2d Dept. 2021). (Internal quotes and citations omitted) (Emphasis added).
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