Do I Need a Commercial Real Estate Purchase Contract If the Escrow Instructions Are Comprehensive?
Updated: Nov 9, 2020
It is a common misconception that a real estate purchase contract is unnecessary if the escrow instructions are comprehensive. However, escrow instructions rarely contain the necessary provisions to resolve the complicated disputes that often arise from commercial real estate transactions. Also, escrow companies tend to focus on their own well-being rather than the financial interests […]
It is a common misconception that a real estate purchase contract is unnecessary if the escrow instructions are comprehensive. However, escrow instructions rarely contain the necessary provisions to resolve the complicated disputes that often arise from commercial real estate transactions. Also, escrow companies tend to focus on their own well-being rather than the financial interests of their clients.
Our firm provides the quality and professionalism expected of a large legal practice with the sensitivity and personal touch of a family-owned business. Call 516-437-6443 to schedule a free consultation.
More Reasons to Get a Real Estate Purchase Contract Drafted
The primary reason why buyers and sellers of real estate forego a purchase contract is to reduce their legal fees. The truth, however, is that not signing a purchase contract can cost you a veritable fortune in the long-run.
What will happen if the other party violates a condition of the purchase? Will you have to file a lawsuit?
Real estate litigation can be expensive, but a purchase contract can prevent this by:
Clearly outlining the conditions of the purchase and the consequences of violating specific conditions; and
Requiring that the parties resolve their disputes by arbitration or mediation rather than filing a lawsuit.
Also, buyers and sellers who confide in escrow instructions often make side deals and establish conditions that aren’t even mentioned in the escrow instructions. You might not think that a particular condition of a purchase is that important, or you may assume that the condition is self-evident and, therefore, would establish grounds for a lawsuit if the other party violated the condition. However, this is often untrue, and if important terms of the transaction are not put in the purchase contract, then you might end up facing expensive litigation in the future.
In addition to drafting your purchase agreement, a commercial real estate lawyer can provide guidance on legal and tax issues. The bottom line: A real estate attorney can help you avoid problems that you never even knew existed.
What Provisions Should the Purchase Agreement Include?
Each purchase contract is unique. A real estate attorney can evaluate your situation and explain which provisions should be included in your purchase agreement. Here are a few common elements contained in these contracts:
Addresses and names of all parties;
Terms of payment;
Details about the property;
Details about title insurance;
Zoning and land provisions;
Warranties and representations;
Rights to modify and amend;
Buyers’ inspection rights;
Attorneys’ fees; and
Provision about dispute resolution.
If you need help drafting a purchase agreement in New York, contact Solomon Richman P.C. Our attorneys have been serving businesses in New York for more than 55 years. Call 516-437-6443 today to schedule a free consultation with a commercial real estate lawyer in Long Island.