COMMERCIAL REAL ESTATE PURCHASE AND SALE AGREEMENT
(Delaware‐Governed)
[// GUIDANCE: This template is intentionally comprehensive. Delete all bracketed instructions and modify placeholders before finalizing for client use.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Purchase and Sale of Property
- Purchase Price; Deposit; Allocation of Closing Costs
- Title and Survey
- Due Diligence and Inspection Rights
- Representations and Warranties
- Covenants
- Conditions Precedent
- Closing
- Prorations, Credits, and Adjustments
- Transfer Taxes and Recording Fees
- Environmental Matters and Indemnity
- Default; Remedies
- Risk Allocation
- Dispute Resolution
- Miscellaneous / General Provisions
- Execution Block
1. DOCUMENT HEADER
COMMERCIAL REAL ESTATE PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:
Seller: [LEGAL NAME OF SELLER], a [STATE OF FORMATION & ENTITY TYPE] (“Seller”)
Buyer: [LEGAL NAME OF BUYER], a [STATE OF FORMATION & ENTITY TYPE] (“Buyer”)
Seller and Buyer are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”
Recitals
A. Seller is the fee simple owner of certain real property located in the State of Delaware, commonly known as [STREET ADDRESS OR PROPERTY NAME], consisting of approximately [ACREAGE/SQUARE FOOTAGE] together with all improvements thereon (collectively, the “Property”).
B. Buyer desires to purchase the Property from Seller, and Seller desires to sell the Property to Buyer, subject to the terms and conditions set forth herein.
C. The Parties intend that Delaware law shall govern this Agreement and that any disputes shall be resolved in accordance with Section 16 below.
NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
2. DEFINITIONS
For ease of reference, the following terms shall have the meanings set forth below. Terms defined in this Section 2 and elsewhere in this Agreement shall apply equally to both the singular and plural forms.
“Affiliate” means any entity controlling, controlled by, or under common control with the referenced Party.
“Agreement” has the meaning set forth in the introductory paragraph.
“Allocation Schedule” has the meaning set forth in Section 11.1.
“Arbitration Option” means the optional arbitration procedure described in Section 16.3.
“Business Day” means any day other than Saturday, Sunday, or a day on which national banks in the State of Delaware are required or permitted to be closed.
“Closing” has the meaning set forth in Section 10.1.
“Closing Date” means [CLOSING DATE OR “the date specified in Section 10.1”].
“Deed” means a general warranty deed in the form attached hereto as Exhibit A conveying fee simple title to the Property to Buyer, subject only to Permitted Exceptions.
“Deposit” has the meaning set forth in Section 4.2.
“Environmental Laws” means, collectively, the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9601 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), Delaware Hazardous Substance Cleanup Act (7 Del. C. § 9101 et seq.), and any other applicable federal, state, or local statutes, regulations, ordinances, or common-law doctrines relating to pollution or protection of the environment.
“Escrow Agent” means [TITLE COMPANY / ESCROW AGENT NAME] or such other party mutually agreed upon in writing by the Parties.
“Inspection Period” has the meaning set forth in Section 6.1.
“Permitted Exceptions” has the meaning set forth in Section 5.2.
“Specific Performance” has the meaning set forth in Section 14.2(b).
“Survey” has the meaning set forth in Section 5.1(b).
“Title Commitment” has the meaning set forth in Section 5.1(a).
“Title Company” means [TITLE COMPANY NAME], acting as issuing agent for [UNDERWRITER].
[// GUIDANCE: Expand or contract this Definitions section as needed for deal complexity.]
3. PURCHASE AND SALE OF PROPERTY
3.1 Agreement to Sell and Purchase. Seller agrees to sell, transfer, and convey to Buyer, and Buyer agrees to purchase from Seller, the Property, together with (a) all easements, hereditaments, and appurtenances belonging thereto; (b) all right, title, and interest of Seller in any adjacent streets, alleys, or rights-of-way; (c) all rights under any governmental approvals, permits, licenses, or entitlements relating to the Property; and (d) all intangible rights owned by Seller with respect to the Property, including warranties, guaranties, and assignable contracts (collectively, the “Intangibles”).
3.2 Excluded Property. The Property does not include and Seller expressly reserves all of Seller’s right, title, and interest in (a) cash or cash equivalents on hand or in accounts; (b) accounts receivable accrued prior to the Closing Date; and (c) any proprietary Seller trademarks, service marks, or trade names.
4. PURCHASE PRICE; DEPOSIT; ALLOCATION OF CLOSING COSTS
4.1 Purchase Price. The total purchase price for the Property shall be [PURCHASE PRICE IN WORDS] Dollars (US $[NUMERALS]) (the “Purchase Price”), subject to prorations and adjustments provided herein. Buyer shall pay the Purchase Price as follows:
a. Deposit (defined below) credited at Closing; and
b. Balance of Purchase Price in immediately available federal funds at Closing.
4.2 Deposit. Within three (3) Business Days after the Effective Date, Buyer shall deposit with Escrow Agent the sum of US $[DEPOSIT AMOUNT] (the “Deposit”). The Deposit shall be held and disbursed pursuant to this Agreement and the joint escrow instructions attached hereto as Exhibit B.
[// GUIDANCE: Consider a two-tier earnest money structure (refundable during due diligence, non-refundable thereafter) for additional protection.]
4.3 Payment of Closing Costs. Closing costs shall be allocated as follows:
a. Seller’s Costs: Deed preparation, one-half of escrow fees, and any release fees for existing liens;
b. Buyer’s Costs: Title insurance premium, Survey costs, one-half of escrow fees, and any lender charges; and
c. Transfer Taxes: Allocated per Section 12.
5. TITLE AND SURVEY
5.1 Title Work.
a. Title Commitment. Within five (5) Business Days after the Effective Date, Seller shall cause the Title Company to deliver to Buyer a commitment for an ALTA Owner’s Policy of Title Insurance (the “Title Commitment”) in the amount of the Purchase Price, together with copies of all underlying exception documents.
b. Survey. Buyer may, at Buyer’s sole cost, obtain an ALTA/NSPS Land Title Survey of the Property (the “Survey”) certified to Buyer, Buyer’s lender, and the Title Company.
5.2 Permitted Exceptions. Buyer shall have until the earlier of (a) the expiration of the Inspection Period or (b) ten (10) Business Days after receipt of the last-delivered Title Commitment and Survey to object in writing to any title or survey matters. Any exceptions not objected to (or timely cured) shall become “Permitted Exceptions.”
5.3 Title Policy. At Closing, the Title Company shall issue to Buyer an ALTA Owner’s Policy of Title Insurance in the amount of the Purchase Price, insuring fee simple title to the Property, subject only to the Permitted Exceptions.
6. DUE DILIGENCE AND INSPECTION RIGHTS
6.1 Inspection Period. Buyer shall have until [NUMBER] days after the Effective Date (the “Inspection Period”) to conduct any and all investigations of the Property, including but not limited to physical inspections, environmental assessments, zoning and land-use reviews, and financial analyses.
6.2 Access. Seller grants Buyer and its agents reasonable access to the Property during the Inspection Period, subject to (a) at least twenty-four (24) hours’ prior notice, (b) compliance with Seller’s safety protocols, and (c) restoration of the Property to its pre-inspection condition.
6.3 Right of Termination. Buyer may terminate this Agreement for any reason prior to the expiration of the Inspection Period by delivering written notice to Seller, whereupon the Deposit shall be returned to Buyer and neither Party shall have further liability (except as expressly stated to survive).
6.4 Confidentiality. All non-public information obtained by Buyer in connection with its due diligence shall be kept confidential in accordance with Section 17.8.
7. REPRESENTATIONS AND WARRANTIES
7.1 Seller’s Representations and Warranties. Seller hereby represents and warrants to Buyer as of the Effective Date and again as of Closing that:
a. Authority. Seller is duly formed, validly existing, and in good standing under the laws of its state of formation and has full power to enter into and perform this Agreement.
b. Title. Seller is the sole fee simple owner of the Property, free and clear of all liens other than Permitted Exceptions.
c. No Conflicts. The execution and performance of this Agreement will not violate any governing documents, judgment, or contractual obligation of Seller.
d. Compliance with Laws. To Seller’s Knowledge, the Property is in material compliance with all laws, ordinances, and regulations, including applicable zoning requirements.
e. Litigation. There is no pending or, to Seller’s Knowledge, threatened litigation affecting the Property.
f. Environmental. Except as disclosed on Schedule 7.1(f), Seller has not received written notice of any violation of Environmental Laws relating to the Property.
g. Foreign Person. Seller is not a “foreign person” within the meaning of Section 1445 of the Internal Revenue Code.
h. Operating Agreements. All service contracts listed on Schedule 7.1(h) are the only agreements affecting the Property and are terminable on or before the Closing Date without penalty.
7.2 Buyer’s Representations and Warranties. Buyer hereby represents and warrants to Seller as of the Effective Date and again as of Closing that:
a. Authority. Buyer is duly formed, validly existing, and in good standing and has full power to enter into and perform this Agreement.
b. Funds. Buyer has, and at Closing will have, sufficient funds to pay the Purchase Price and perform its obligations hereunder.
c. No Conflicts. The execution and performance of this Agreement will not violate any governing documents, judgment, or contractual obligation of Buyer.
7.3 Survival; Limitation. The representations and warranties set forth in this Article 7 shall survive Closing for a period of [12–24] months (the “Survival Period”) and shall thereafter terminate, except for claims timely asserted in writing before such termination.
8. COVENANTS
8.1 Seller’s Pre-Closing Covenants. From the Effective Date until Closing, Seller shall:
a. Operate and maintain the Property in substantially the same manner as prior to the Effective Date;
b. Not enter into any new leases, contracts, or encumbrances affecting the Property without Buyer’s prior written consent (which shall not be unreasonably withheld, conditioned, or delayed);
c. Deliver prompt notice to Buyer of any material adverse change or governmental notice concerning the Property; and
d. Maintain in force all existing insurance coverage on the Property.
8.2 Buyer’s Pre-Closing Covenants. Buyer shall:
a. Timely perform all due diligence activities in a manner that does not unreasonably interfere with Seller’s operations;
b. Indemnify Seller against any mechanic’s lien or property damage arising from Buyer’s inspection activities; and
c. Maintain confidentiality of Seller’s proprietary information.
9. CONDITIONS PRECEDENT
9.1 Buyer’s Conditions. Buyer’s obligation to close is conditioned upon satisfaction or written waiver of the following:
a. Seller’s representations and warranties remain true and correct in all material respects as of Closing;
b. Seller has performed all obligations required to be performed on or before Closing;
c. Title Company is prepared to deliver the Title Policy subject only to Permitted Exceptions;
d. Buyer’s receipt and approval of the Survey and zoning confirmation; and
e. No material adverse change has occurred with respect to the Property.
9.2 Seller’s Conditions. Seller’s obligation to close is conditioned upon:
a. Buyer’s representations and warranties remaining true and correct in all material respects as of Closing;
b. Buyer’s performance of its covenants and obligations under this Agreement;
c. Receipt of the Purchase Price (net of prorations and adjustments); and
d. Title Company’s readiness to issue the Owner’s Policy of Title Insurance.
10. CLOSING
10.1 Closing Date. The consummation of the transaction contemplated by this Agreement (the “Closing”) shall occur on [CLOSING DATE] or such earlier date as the Parties may mutually agree (the “Closing Date”). Closing shall be conducted through an escrow with the Title Company unless otherwise agreed.
10.2 Seller’s Closing Deliveries. At or before Closing, Seller shall deliver to Escrow Agent:
a. Executed Deed;
b. FIRPTA Affidavit;
c. Bill of Sale and Assignment of Intangibles;
d. Assignment and Assumption of Contracts;
e. Updated rent roll (if applicable); and
f. Such other documents reasonably required by the Title Company or Buyer.
10.3 Buyer’s Closing Deliveries. At or before Closing, Buyer shall deliver to Escrow Agent:
a. The Purchase Price (less the Deposit and plus/minus prorations);
b. Counterparts of the Assignment and Assumption of Contracts; and
c. Such other documents reasonably required by the Title Company or Seller.
10.4 Possession. Possession of the Property shall be delivered to Buyer at Closing, subject only to the Permitted Exceptions and any post-closing occupancy agreements executed by the Parties.
11. PRORATIONS, CREDITS, AND ADJUSTMENTS
11.1 Items Prorated. The following items shall be prorated between the Parties as of 11:59 p.m. on the day immediately preceding the Closing Date: real property taxes and assessments (whether payable in arrears or advance), utilities, operating expenses, and, if applicable, rents and security deposits. The prorations shall be set forth on a mutually-approved closing statement (the “Allocation Schedule”).
11.2 Re-Proration. If any prorated item is based on an estimate or preliminary bill, the Parties shall re-prorate such item when the actual amount is determined, and the owing Party shall pay the other within fifteen (15) days of written demand.
12. TRANSFER TAXES AND RECORDING FEES
12.1 Delaware Real Estate Transfer Tax. Pursuant to 30 Del. C. § 5402, a tax is imposed on the transfer of real property in Delaware. The Parties agree that [ALLOCABLE PERCENTAGE]% shall be paid by Seller and [ALLOCABLE PERCENTAGE]% shall be paid by Buyer at Closing.
[// GUIDANCE: The statutory default is typically 2% paid by each party (total 4%). Adjust as negotiated.]
12.2 Recording Fees. Buyer shall pay all recording fees for the Deed and related documents unless otherwise required by local custom.
13. ENVIRONMENTAL MATTERS AND INDEMNITY
13.1 Phase I/Phase II. Buyer may, at its option and expense, obtain a Phase I Environmental Site Assessment (and, if recommended, a Phase II) in accordance with ASTM E1527-21 or then-current standard.
13.2 Environmental Indemnity.
a. Seller Indemnity. Seller shall defend, indemnify, and hold Buyer and its Affiliates harmless from and against any and all losses, damages, liabilities, obligations, claims, fines, penalties, and reasonable attorneys’ fees (“Losses”) arising out of or resulting from (i) any Hazardous Materials located on, under, or migrating from the Property as of the Closing Date, or (ii) any violation of Environmental Laws relating to the period prior to Closing, except to the extent caused by Buyer.
b. Survival. The indemnity set forth in this Section 13 shall survive Closing for a period of [X] years or the applicable statute of limitations, whichever is longer.
[// GUIDANCE: Consider an escrow hold-back or environmental insurance policy for higher-risk properties.]
14. DEFAULT; REMEDIES
14.1 Buyer Default. If Buyer defaults and fails to cure within five (5) Business Days after written notice, Seller shall, as its sole and exclusive remedy, either (a) terminate this Agreement and retain the Deposit as liquidated damages or (b) seek Specific Performance.
[// GUIDANCE: Delaware courts generally enforce liquidated-damage provisions when the amount is a reasonable pre-estimate of damages.]
14.2 Seller Default. If Seller defaults and fails to cure within five (5) Business Days after written notice, Buyer may elect:
a. Termination and return of the Deposit, plus reimbursement of Buyer’s out-of-pocket due diligence costs not to exceed [CAP] US $; or
b. Specific Performance (“Specific Performance”) to compel Seller to convey the Property.
14.3 Attorney Fees. The prevailing Party in any action or proceeding arising out of this Agreement shall be entitled to reasonable attorneys’ fees and costs.
15. RISK ALLOCATION
15.1 Limitation of Liability. Except for Seller’s fraud or willful misconduct and the environmental indemnity under Section 13, Seller’s aggregate liability under this Agreement shall not exceed [LIABILITY CAP AMOUNT] US $.
[// GUIDANCE: Set the cap at 5%–10% of Purchase Price or as negotiated.]
15.2 Force Majeure. Neither Party shall be liable for failure to perform due to events beyond its reasonable control, including acts of God, war, terrorism, pandemic, labor disputes, or governmental actions, provided the affected Party gives prompt notice and resumes performance as soon as practicable.
15.3 Insurance. Until Closing, Seller shall maintain property and liability insurance in commercially reasonable amounts. After Closing, Buyer shall obtain and maintain insurance customary for similarly situated properties.
16. DISPUTE RESOLUTION
16.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflict-of-laws principles.
16.2 Forum Selection. Any suit, action, or proceeding arising out of or relating to this Agreement shall be instituted exclusively in the state courts located in [COUNTY, DELAWARE], and each Party irrevocably submits to the jurisdiction of such courts.
16.3 Arbitration (Optional). At any time prior to the filing of a complaint, either Party may invoke the arbitration procedure set forth in this Section 16.3 by written notice to the other. Arbitration shall be administered by the American Arbitration Association under its Commercial Arbitration Rules by a single arbitrator in Wilmington, Delaware. Judgment on the award may be entered in any court having jurisdiction. Participation in arbitration is voluntary; if not invoked, disputes will be resolved in the forum designated in Section 16.2.
16.4 Jury Trial Waiver (Optional). To the extent permitted by applicable law, each Party hereby waives its right to a trial by jury in any action arising out of this Agreement.
16.5 Injunctive Relief. Nothing herein shall preclude either Party from seeking temporary, preliminary, or permanent injunctive relief, including Specific Performance, in accordance with Section 14.
17. MISCELLANEOUS / GENERAL PROVISIONS
17.1 Notices. All notices shall be in writing and delivered by (a) personal delivery, (b) nationally recognized overnight courier, or (c) email with confirmed receipt, addressed to the Parties at the addresses set forth below (or as later designated):
Seller: [ADDRESS / EMAIL]
Buyer: [ADDRESS / EMAIL]
With copy to counsel: [IF ANY]
Notice is deemed given upon receipt or refusal.
17.2 Assignments. Buyer may not assign this Agreement without Seller’s prior written consent, except to a Buyer Affiliate or a special-purpose entity formed to acquire the Property, provided Buyer remains liable for all obligations.
17.3 Amendments; Waivers. No amendment or waiver shall be effective unless in writing signed by the Party against whom enforcement is sought. No waiver of any breach shall be deemed a waiver of any other breach.
17.4 Severability. If any provision is determined invalid or unenforceable, the remaining provisions shall remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to achieve the Parties’ original intent.
17.5 Entire Agreement. This Agreement (including all exhibits and schedules) constitutes the entire agreement between the Parties and supersedes all prior understandings.
17.6 Counterparts; Electronic Signatures. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which together constitute one document. Electronic signatures are binding to the same extent as originals.
17.7 Successors and Assigns. Subject to Section 17.2, this Agreement binds and benefits the Parties and their respective successors and assigns.
17.8 Confidentiality. Except as required by law, the Parties shall keep confidential the terms of this Agreement and all non-public information regarding the Property.
17.9 Time of the Essence. Time is of the essence with respect to all dates and time periods set forth herein.
17.10 No Third-Party Beneficiaries. Nothing in this Agreement is intended to confer any benefit upon any person or entity other than the Parties and their permitted successors and assigns.
18. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Commercial Real Estate Purchase and Sale Agreement as of the Effective Date.
SELLER:
[LEGAL NAME OF SELLER]
By: _____
Name: [NAME]
Title: [AUTHORIZED TITLE]
Date: _____
BUYER:
[LEGAL NAME OF BUYER]
By: _____
Name: [NAME]
Title: [AUTHORIZED TITLE]
Date: _____
[// GUIDANCE: Attach Exhibits—Deed (Exhibit A), Escrow Instructions (Exhibit B), Seller Disclosure Schedules, etc.—as required.]
[END OF AGREEMENT]