COMMERCIAL PURCHASE AND SALE AGREEMENT
(State of Colorado)
[// GUIDANCE: This template is drafted for commercial real estate transactions in Colorado. Residential transactions in Colorado are subject to mandatory Colorado Real Estate Commission (“CREC”) forms which may not be waived. Confirm that the subject property is not “residential” under C.R.S. § 12-10-403(10).]
TABLE OF CONTENTS
- DOCUMENT HEADER
- DEFINITIONS
- PURCHASE AND SALE
- PURCHASE PRICE; PAYMENT TERMS
- EARNEST MONEY
- DUE DILIGENCE
- TITLE AND SURVEY
- ZONING AND LAND USE COMPLIANCE
- ENVIRONMENTAL MATTERS
- CLOSING
- REPRESENTATIONS & WARRANTIES
- COVENANTS
- CONDITIONS PRECEDENT
- CASUALTY & CONDEMNATION
- DEFAULT; REMEDIES
- RISK ALLOCATION
- DISPUTE RESOLUTION
- GENERAL PROVISIONS
- EXECUTION BLOCK
- EXHIBITS & SCHEDULES
[// GUIDANCE: Cross-check section numbers if clauses are added/deleted.]
1. DOCUMENT HEADER
1.1 Title; Parties.
This Commercial Purchase and Sale Agreement (“Agreement”) is entered into as of [EFFECTIVE DATE] (“Effective Date”) by and between:
• [SELLER LEGAL NAME], a [STATE OF FORMATION] [ENTITY TYPE] (“Seller”); and
• [BUYER LEGAL NAME], a [STATE OF FORMATION] [ENTITY TYPE] (“Buyer”).
Seller and Buyer are sometimes referred to individually as a “Party” and collectively as the “Parties.”
1.2 Recitals.
A. Seller is the owner of certain real property located at [PROPERTY ADDRESS], County of [COUNTY], State of Colorado, more particularly described in Exhibit A (the “Land”), together with all improvements thereon (the “Improvements”);
B. Buyer desires to purchase, and Seller desires to sell, the Property (as defined below) on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:
2. DEFINITIONS
Capitalized terms have the meanings set forth below or elsewhere in this Agreement.
“Affiliate” – any entity controlling, controlled by, or under common control with a Party.
“Allocated Purchase Price” – the portion of the Purchase Price attributed to each asset class under Section 4.6.
“Applicable Law” – all federal, state (including, without limitation, the Colorado Revised Statutes and regulations promulgated by the Colorado Department of Public Health and Environment), county, and local statutes, ordinances, regulations, and judicial orders applicable to the Property or the transaction contemplated hereby.
“Closing” – the consummation of the purchase and sale under Section 10.
“Closing Date” – the date on which Closing occurs, anticipated to be [CLOSING DATE].
“Contracts” – all assignable service, maintenance, management, utility, or other contracts relating to the Property, listed on Schedule 2.
“Deed” – a special warranty deed in the form attached as Exhibit B.
“Environmental Claims” – any administrative, regulatory, or judicial action arising out of any Environmental Law.
“Environmental Laws” – CERCLA, RCRA, TSCA, CWA, CAA, Colorado Hazardous Waste Act, and all analogous state or local statutes, regulations, and ordinances.
“Escrow Agent” – [TITLE COMPANY NAME], duly licensed in Colorado.
“Hazardous Materials” – substances defined as “hazardous” or “toxic” under any Environmental Law.
“Inspection Period” – the period described in Section 6.1.
“Permitted Exceptions” – those title matters approved or deemed approved under Section 7.2.
“Property” – collectively, the Land, Improvements, fixtures, Leases, Tenant Security Deposits, Contracts, licenses, permits, entitlements, warranties, plans, intellectual property rights, and personal property owned by Seller and used in connection with the foregoing.
“Purchase Price” – the consideration set forth in Section 4.1.
“Survey” – an ALTA/NSPS Land Title Survey certified to Buyer, Seller, Escrow Agent, and Buyer’s lender.
“Title Commitment” – the preliminary commitment for an ALTA Owner’s Policy issued by Escrow Agent.
3. PURCHASE AND SALE
3.1 Agreement to Convey. Subject to the terms herein, Seller agrees to sell, and Buyer agrees to purchase, the Property.
3.2 “As-Is” Basis. Except as expressly provided in this Agreement and the Closing documents, Buyer accepts the Property “AS IS, WHERE IS, WITH ALL FAULTS.”
[// GUIDANCE: Consider revising this clause if Seller will provide extensive representations or if buyer protections are required.]
4. PURCHASE PRICE; PAYMENT TERMS
4.1 Purchase Price. Buyer shall pay Seller an aggregate purchase price of $[•] (“Purchase Price”), subject to prorations and adjustments herein.
4.2 Payment Mechanics.
(a) Earnest Money. Within [•] Business Days after the Effective Date, Buyer shall deposit $[•] (“Earnest Money”) with Escrow Agent.
(b) Balance. At Closing, Buyer shall deliver the balance of the Purchase Price, plus Buyer’s Closing costs, by wire transfer of immediately available U.S. funds.
4.3 Independent Consideration. $100.00 of the Earnest Money shall be non-refundable independent consideration to support Seller’s option contract rights under Texas v. Colorado considerations.
4.4 Allocation. The Parties shall allocate the Purchase Price per Section 1060 of the Internal Revenue Code as set forth in Schedule 4.4.
4.5 Credits. Buyer shall receive a credit for (i) unapplied tenant security deposits, (ii) prorated taxes, and (iii) other agreed adjustments.
4.6 Withholding. If FIRPTA applies, Seller shall deliver a § 1445 certificate or Buyer shall withhold ten percent (10%) of the Purchase Price.
5. EARNEST MONEY
5.1 Escrow Agreement. The Earnest Money shall be held pursuant to a joint escrow agreement among the Parties and Escrow Agent consistent with § 38-35-126, C.R.S.
5.2 Disposition.
(a) Refund. If this Agreement is terminated pursuant to a right expressly granted to Buyer, Escrow Agent shall return the Earnest Money (less independent consideration) to Buyer.
(b) Forfeiture. In all other cases of Buyer default, Seller shall be entitled to the Earnest Money as liquidated damages under Section 15.2(a).
6. DUE DILIGENCE
6.1 Inspection Period. Buyer shall have [ • ] days after the Effective Date (“Inspection Period”) to conduct investigations of the Property. Buyer may terminate this Agreement by written notice prior to the end of the Inspection Period for any reason or no reason, in which event the Earnest Money shall be disbursed per Section 5.2.
6.2 Access; Insurance. Buyer and its agents shall have reasonable access upon [ • ] Business Days’ notice, during normal business hours, provided Buyer maintains at least $2,000,000 CGL insurance naming Seller as an additional insured.
6.3 Document Delivery. Within three (3) Business Days after the Effective Date, Seller shall deliver the Due Diligence Materials listed on Schedule 6.3, including, without limitation:
(a) the Leases;
(b) operating statements for the trailing 36 months;
(c) existing environmental reports;
(d) existing surveys and plans; and
(e) any notices of zoning or code violations.
7. TITLE AND SURVEY
7.1 Title Commitment; Survey. Within five (5) Business Days after the Effective Date, Seller shall cause Escrow Agent to deliver the Title Commitment to Buyer. Buyer shall, at its cost, procure the Survey.
7.2 Title Review.
(a) Objections. Buyer shall deliver written notice of any objections (“Title Objection Notice”) within [ • ] days after receipt of the later of the Title Commitment or Survey.
(b) Seller Response. Seller shall have five (5) Business Days to elect to cure or decline to cure each objection.
(c) Deemed Acceptance. Failure of Buyer to object within the time period shall be deemed acceptance of the Title Commitment and Survey.
(d) Termination. If Seller elects not to cure a timely objection, Buyer may terminate this Agreement within three (3) Business Days and receive a refund of the Earnest Money.
7.3 Title Policy. At Closing, Escrow Agent shall issue to Buyer an ALTA Owner’s Policy, Form 2006, in the amount of the Purchase Price, insuring fee-simple title to the Land and Improvements, subject only to the Permitted Exceptions (the “Title Policy”). [// GUIDANCE: Consider 2021 ALTA form when adopted by Colorado Title Association.]
8. ZONING AND LAND USE COMPLIANCE
8.1 Seller Representation. Seller represents that, to Seller’s Knowledge, (a) the current zoning designation for the Property is [ZONING CLASSIFICATION], permitting use as [USE]; (b) no written notices of violation remain uncured; and (c) the Improvements and current use are legal, conforming (or lawfully non-conforming) under Applicable Law.
8.2 Buyer’s Zoning Contingency. Buyer’s obligations are conditioned upon Buyer’s confirmation, prior to the end of the Inspection Period, that the Property’s zoning permits Buyer’s intended use.
8.3 Cooperation. Seller shall reasonably cooperate (at no cost) with Buyer’s applications for any required re-zoning, variances, or conditional use permits.
9. ENVIRONMENTAL MATTERS
9.1 Phase I ESA. Buyer may obtain a Phase I Environmental Site Assessment (“Phase I ESA”) in accordance with ASTM E1527-21 during the Inspection Period.
9.2 Seller Disclosures. To Seller’s Knowledge, except as disclosed in Schedule 9.2:
(a) No Hazardous Materials have been released on or under the Property in violation of Environmental Laws;
(b) Seller has received no written notice of Environmental Claims; and
(c) The Property contains no underground storage tanks requiring registration or closure.
9.3 Environmental Indemnity. From and after Closing, Seller shall indemnify, defend, and hold harmless Buyer and its Affiliates from any Losses arising from (i) a breach of Seller’s environmental representations, or (ii) pre-Closing releases of Hazardous Materials at, on, or migrating from the Property (“Environmental Indemnity”). The Environmental Indemnity shall survive Closing [SURVIVAL PERIOD, e.g., “for six (6) years” or “indefinitely”].
9.4 Buyer Entry & Remediation. Prior to Closing, Buyer shall not perform invasive environmental testing without Seller’s prior written consent, not to be unreasonably withheld.
10. CLOSING
10.1 Closing Date; Escrow. Closing shall occur on the Closing Date at the offices of Escrow Agent or via remote conference, in escrow, per standard Colorado Real Estate Title Association protocols.
10.2 Seller Closing Deliverables. Seller shall deliver:
(a) the Deed;
(b) a bill of sale;
(c) assignment and assumption of Leases and Contracts;
(d) FIRPTA certificate;
(e) seller’s affidavit of title;
(f) existing warranties;
(g) settlement statement; and
(h) such additional documents reasonably required by Escrow Agent.
10.3 Buyer Closing Deliverables. Buyer shall deliver:
(a) the Purchase Price balance;
(b) counterpart assignments and assumptions; and
(c) settlement statement.
10.4 Closing Costs. Seller shall pay: (i) one-half of Escrow Agent’s fees; (ii) the cost of the owner’s portion of the Title Policy (standard coverage); and (iii) Colorado documentary fee ($0.01 per $100). Buyer shall pay: (i) the lender’s title policy (if any); (ii) extended coverage or endorsements; (iii) recording fees; (iv) Survey; and (v) one-half of Escrow Agent’s fees.
10.5 Prorations. The following shall be prorated as of 11:59 p.m. Mountain Time on the day preceding the Closing Date: real property taxes (on a calendar-year basis), rent, CAM charges, utilities, and other income/expenses per custom in the county where the Property is located.
11. REPRESENTATIONS & WARRANTIES
11.1 Mutual. Each Party represents and warrants that:
(a) it is duly formed, validly existing, and in good standing;
(b) it has full power and authority to execute and perform this Agreement;
(c) this Agreement has been duly authorized and constitutes a valid obligation; and
(d) execution does not violate any governing documents or Applicable Law.
11.2 Seller. Seller further represents and warrants that, as of the Effective Date and as of Closing:
(a) Title. Seller is the sole fee simple owner of the Land and Improvements;
(b) Leases. The rent roll attached as Schedule 11.2(b) is true and correct;
(c) Contracts. Schedule 2 lists all material Contracts;
(d) Litigation. There is no pending litigation affecting the Property;
(e) Tax. All property taxes are paid or will be paid at Closing;
(f) Foreign Person. Seller is not a “foreign person” under FIRPTA;
(g) Violation Notices. Seller has received no uncured written notices of violation of Applicable Law;
(h) OFAC. Seller is not on any OFAC or related sanctions list.
11.3 Buyer. Buyer further represents that:
(a) Buyer has available funds to close; and
(b) Buyer has not dealt with any broker other than [BROKER NAMES], whose commission Seller shall pay under separate agreement.
11.4 Survival; Limitation. Seller’s representations and warranties shall survive Closing for [SURVIVAL PERIOD, e.g., 12 months] and are subject to the limitation of liability in Section 17.
12. COVENANTS
12.1 Seller Covenants Prior to Closing. Seller shall:
(a) operate and maintain the Property in substantially the same manner;
(b) not enter, amend, or terminate any Lease or Contract without Buyer’s consent (not to be unreasonably withheld);
(c) maintain existing insurance;
(d) provide prompt notice of material changes; and
(e) comply with Applicable Law.
12.2 Buyer Covenants. Buyer shall not assign this Agreement, except as provided in Section 18.2, without Seller’s prior written consent; provided that Buyer may assign to an Affiliate without consent if Buyer remains liable.
13. CONDITIONS PRECEDENT
13.1 Buyer’s Conditions. Buyer’s obligation to close is conditioned on:
(a) accuracy of Seller’s representations at Closing;
(b) delivery of Seller Closing Deliverables;
(c) issuance of the Title Policy;
(d) absence of a Material Adverse Change; and
(e) satisfaction or waiver of Inspection Period contingencies.
13.2 Seller’s Conditions. Seller’s obligation to close is conditioned on:
(a) accuracy of Buyer’s representations;
(b) delivery of the Purchase Price; and
(c) delivery of Buyer Closing Deliverables.
14. CASUALTY & CONDEMNATION
14.1 Risk of Loss. Risk of loss remains with Seller until Closing.
14.2 Material Casualty. If prior to Closing the Property suffers damage exceeding [THRESHOLD, e.g., 5% of Purchase Price], Buyer may (a) terminate this Agreement and recover the Earnest Money or (b) proceed to Closing with an assignment of insurance proceeds and a credit for the deductible.
14.3 Condemnation. If prior to Closing any eminent domain proceeding is commenced for a taking exceeding [•] square feet or materially affecting access, Buyer may terminate and recover the Earnest Money or proceed with an assignment of the award.
15. DEFAULT; REMEDIES
15.1 Buyer Default. If Buyer defaults and fails to cure within five (5) Business Days after notice, Seller may terminate and retain the Earnest Money as liquidated damages, which the Parties agree is not a penalty but a reasonable estimate of Seller’s damages.
15.2 Seller Default. If Seller defaults and fails to cure within five (5) Business Days after notice, Buyer may elect:
(a) (i) termination and refund of the Earnest Money plus reimbursement of Buyer’s documented out-of-pocket third-party costs not to exceed $[CAP]; or
(b) specific performance of Seller’s obligations, it being acknowledged that the Property is unique.
[// GUIDANCE: Injunctive relief via specific performance is mandated by the metadata.]
15.3 Attorney Fees. The prevailing Party in any action shall recover reasonable attorney fees, expert fees, and costs.
16. RISK ALLOCATION
16.1 Environmental Indemnity. See Section 9.3.
16.2 General Indemnity.
(a) Seller Indemnity. Seller shall indemnify Buyer against Losses arising from (i) pre-Closing bodily injury or property damage on the Property due to Seller’s negligence, or (ii) Seller’s breach of this Agreement.
(b) Buyer Indemnity. Buyer shall indemnify Seller against Losses arising from (i) Buyer’s activities on the Property prior to Closing, or (ii) Buyer’s breach of this Agreement.
16.3 Limitation of Liability. EXCEPT FOR fraud, willful misconduct, or the Environmental Indemnity, Seller’s aggregate liability for claims arising under this Agreement shall not exceed $[LIABILITY CAP].
16.4 Insurance. Each Party shall maintain (and Buyer shall cause its contractors to maintain) commercially reasonable insurance per Exhibit C.
16.5 Force Majeure. If a party is prevented from timely performance by acts of God, pandemic, governmental orders, war, or similar events beyond its reasonable control, the affected time periods shall be extended for the duration of the delay, not to exceed thirty (30) days.
17. DISPUTE RESOLUTION
17.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado, without regard to conflict-of-laws principles.
17.2 Forum Selection. The Parties submit to the exclusive jurisdiction of the state courts located in [COUNTY], Colorado.
17.3 Optional Arbitration. [OPTIONAL] In lieu of state-court litigation, either Party may elect binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. Such election must be made by written notice within ten (10) days after service of a complaint. The arbitration shall be held in [CITY], Colorado.
17.4 Jury Trial Waiver. [OPTIONAL] EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT TO A TRIAL BY JURY.
17.5 Specific Performance. The Parties agree that monetary damages may be insufficient for Seller default, and Buyer shall be entitled to specific performance.
17.6 Equitable Relief. The Parties may seek temporary or permanent injunctive relief to maintain the status quo pending arbitration or litigation.
18. GENERAL PROVISIONS
18.1 Notices. All notices shall be in writing and delivered by (i) hand, (ii) reputable overnight courier, or (iii) email with confirmation, to the addresses set forth below each Party’s signature block.
18.2 Assignment. Buyer may not assign this Agreement without Seller’s prior written consent, except to an Affiliate controlled by Buyer; provided Buyer remains liable.
18.3 Amendment; Waiver. No modification or waiver is effective unless in writing signed by the Party against whom enforcement is sought.
18.4 Entire Agreement. This Agreement, together with each exhibit and schedule, constitutes the entire agreement and supersedes all prior discussions.
18.5 Severability. If any provision is invalid, the remaining provisions shall remain in full force, and the invalid provision shall be reformed to effectuate the Parties’ intent.
18.6 Successors & Assigns. This Agreement binds and benefits the Parties and their permitted successors and assigns.
18.7 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original. Facsimile and electronic signatures (including via DocuSign or Adobe Sign) are binding.
18.8 Time of the Essence; Business Days. Time is of the essence. If any deadline falls on a non-Business Day, performance is due on the next Business Day. “Business Day” means any day other than Saturday, Sunday, or Colorado legal holiday.
18.9 No Third-Party Beneficiaries. Except as expressly set forth herein, nothing creates rights in any third party.
19. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
SELLER:
[SELLER LEGAL NAME]
By: ____
Name: ____
Title: ________
Date: _____
BUYER:
[BUYER LEGAL NAME]
By: ____
Name: ____
Title: ________
Date: _____
[NOTARY ACKNOWLEDGMENT BLOCKS AS REQUIRED UNDER C.R.S. § 24-21-507]
20. EXHIBITS & SCHEDULES
Exhibit A – Legal Description of Land
Exhibit B – Form of Special Warranty Deed
Exhibit C – Insurance Requirements
Schedule 2 – Contracts
Schedule 4.4 – Purchase Price Allocation
Schedule 6.3 – Due Diligence Materials
Schedule 9.2 – Environmental Disclosures
Schedule 11.2(b) – Rent Roll
[// GUIDANCE: Ensure all referenced exhibits/schedules are prepared prior to execution.]
END OF DOCUMENT