Do you know the
most important part of a
commercial real estate transaction? It is the “contract of purchase and sale,” which many attest
is the road map of the real estate transaction. If a contract is properly
negotiated and focused on eliminating any ambiguities, most problems will
be avoided and the parties can move towards closing.
A contract can be:
- Bilateral, where both parties are bound to contract conditions, or
- Unilateral, where only one party is expected to perform under the contract.
Generally, a contract of purchase and sale involves the following elements:
letters of intent, bilateral contract requirements, the offer, acceptance,
and consideration (without a consideration passing between the parties,
it is not binding), such as a promise for a promise, etc.
In a commercial real estate transaction, the property should be well-described
in the contract itself, and the contract should contain a legal description
of the property. When entering a commercial real estate contract, one
- Are there any ingress or egress? This refers to the right to enter, leave,
and return to a property.
- Are parking easements required?
- Will any furniture or equipment be included?
- Will overhead cranes be included? (warehouses)
- Will any movable loading docks be included? (warehouses)
Often, the seller will put a provision in the contract that the property
is being sold “as is.” This means the seller is not stating
that the property is any particular condition. However, selling a property
“as is” will not protect a seller against fraudulent concealment
of fact, or fraudulent misrepresentations.
In order for buyers to protect themselves, they should allow 10 days from
signing (or longer) to inspect the property, or to have engineer inspect
it for them. Usually, it is the engineer’s job to check the structural
soundness of the property and any improvements that were made.
When it comes to a commercial real estate transaction, it is important
to cover all of your bases, and it all starts with a well-executed contract
of purchase and sale. If you are looking for a Chicago
real estate lawyer to assist you in this endeavor,
contact Rifkind Patrick LLC today. With
over 40 years of collective experience, we are qualified to represent you.