When negotiating a commercial real estate purchase agreement as either a buyer or seller, you will want to include several contract stipulations and contingencies to protect yourself.
These terms are a necessary part of any commercial real estate transaction and will allow you to back away from the deal without penalty if certain conditions are not met.
A Fort Lauderdale commercial real estate lawyer can help you determine what specific contract stipulations that you may need to include.
Below are a few of the regular contingencies that you may see in your next agreement:
Zoning and Land Use Contingencies
Zoning and land use contingencies are quite common. They cover the potential uses for the property, as it will only be valuable to a buyer if it can be used for its intended purpose.
If there will be no change between the prior and future use of the property, zoning contingencies are typically of little concern.
However, if the buyer will be using the property in any different way, they should typically include terminology in the contract to allow for some time to obtain appropriate permits and zoning approvals.
Both buyers and sellers have an interest in financial contingencies. One common stipulation will allow the seller to breach the contract if the buyer is not able to obtain financing or submit a down payment within a reasonable period of time.
Buyers can include stipulations that allow them to breach if they are unable to obtain financing at a fair rate. They will also typically want to include terms that will allow them to purchase the property without being required to pay in cash.
Title and Survey Contingencies
Buyers must include title and survey contingencies to protect themselves from purchasing a property that may have hidden title defects or survey issues. Sellers also will want to include terms regarding any title contingencies in order to fix them and save the deal.
Buyers will typically want enough time to perform a full title search to uncover any previously unknown defects. They would then notify the seller of any uncovered defects and possibly allow the seller to correct them. The buyer would have the choice to either proceed or terminate the agreement after defects are found.
Sellers will want time to correct title defects. If they are able to correct them, they may want to include terminology in the contract that obligates the buyer to close on the deal.
If you have any specific questions about stipulations in your commercial real estate contract, call Schecter Law, a leading commercial real estate attorney in Fort Lauderdale, at (954) 779-7009.