Understanding a Commercial Real Estate Contract

Commercial Real Estate Attorneys in Poughkeepsie, NY

A commercial real estate contract can cover construction, property rental and insurance coverage as well as the sale of the property. At McCabe, Coleman, Ventosa & Patterson PLLC, we will review your commercial contract to ensure that it clearly specifies price, date the sale should be completed and conditions that each party must satisfy to avoid a breach of contract.

Contact us today at (845) 209-1355 to learn how we can help you.

What is a Commercial Real Estate Contract?

A commercial real estate contracts, also known as purchase and sale agreements, can be short and direct or long and detailed, as well as consist of several drafts before reaching the final version. The contract specifies the property specs, establishes the rights and responsibilities of stakeholders, and details the steps to complete a transaction.

The following are common terms in a commercial real estate contract that you should know:

• Whereas clauses – Also known as recitals, whereas clauses explain the facts leading up to the contract. While they are not binding provisions, they must be mentioned in the body of the agreement.

• Description of property – Contracts will include property descriptions. There are three types of property: real property, personal property, and property interests.

• Property transfer documents – The transfer of real, personal, and other property is done through different documents, such as deeds, assignments, and bills of sale.

• Price of purchase, adjustments, and earnest deposit – Although the purchase price is established, it is still subject to adjustments during closing. Additionally, the contract includes who will hold the earnest deposit and how the money is handled if the deal is approved or falls through.

• Buyer’s contingencies – Buyers will have time to examine all the property’s important aspects. Common examples of contingency items include land use approvals, review of leases, accepted property condition after inspections, satisfactory title and survey of property, etc.

• Terms of default – The contract must determine how much is a default, what happens after a default occurs, and how to resolve this issue.

• Closing details – The contract will establish a closing date. If closing does not happen on the set date, the contract can be terminated.

There are many other terms that you must familiarize yourself with. Our Poughkeepsie legal team can create the initial draft of the contract, hammer out all the terms and conditions with all parties involved, handle all the paperwork, collect the necessary documents, and protect your rights throughout the process.

For more information about our legal services, call us today at (845) 209-1355.