There are a number of important decisions that must be made by Florida business owners in the course of achieving success for the company. One of the most important decisions often involves commercial real estate.
Last week, this blog discussed how business owners frequently are tasked with deciding between purchasing or leasing commercial property. Even after this initial decision is made, there are a number of different considerations that go into implementing the decision.
For instance, drafting a purchase agreement that includes all of the necessary provisions to protect the company is vital when deciding to purchase real estate. A typical purchase agreement may include issues like identifying the assets to be sold, specifying the earnest money deposit that will be used and detailing provisions about the title conditions and examination of title. Other provisions may address the inspection of the property and the conditions that must be satisfied by both sides prior to final closing.
The agreement might also outline certain representations or warranties, which can be important if problems later develop with the property. In addition, the proration of property taxes or other expenses may be laid out in the agreement.
There can be a lot of back and forth contract negotiation between the buyer and seller during this process as the parties attempt to come to an agreement over the terms of the contract. For instance, one side might try to get the other to waive certain rights they would otherwise have. Accordingly, the potential for disputes extends far beyond financial details, as a number of important provisions of the contract need to be ironed out.
Because each party has different considerations that will be important to them, there can be major differences among purchase agreements. Business owners should thus understand what they can do to implement the provisions that are important to them in order to get a purchase agreement that accomplishes their property goals while protecting their interests related to the transaction.
Source: American Bar Association, “The purchase and sale agreement: Negotiating strategies from a US and international perspective,” accessed on Oct. 1, 2016