Buying or Selling Commercial Property

A Commercial Real Estate (CRE) sales contract can be a one pager, or one hundred pages. There are no rules, and every term, every word, is up for negotiation. Nonetheless, there are provisions that are typically included in most “CRE” purchase agreements. Understanding these provisions is essential for both the Buyer and the Seller to protect their interests.

A contract has several purposes:

• it specifies each party’s rights, obligations and liabilities
• it details the steps that must happen in order to close the transaction, and naturally,
• it defines exactly what property (real and otherwise) is being conveyed.

While there is sometimes the inclination to keep a contract “short and simple,” a well-drafted contract will clearly address and define the purposes above, regardless of the document’s length or complexity. The time and money spent to create a thorough and complete contract will be returned ten-fold if conflicts arise.

The first draft of agreements is typically done by the Seller’s Attorney, and then sent to the Buyer for their input. The two parties exchange revisions until both accept a final document. The agreement will likely contain the common provisions, but it will be tailored to address the specific deal, including the specific type of property. For example, the sale of an unoccupied industrial property will have different issues than undeveloped land or a retail complex with multiple tenants.

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