PURCHASE AND SALE AGREEMENT
(Commercial Real Estate – State of New Jersey)
[// GUIDANCE: This is a comprehensive, court-ready template for the purchase and sale of commercial real estate located in New Jersey. Bracketed text must be completed or revised to suit the transaction. Section numbers auto-update if edited in a modern word processor.]
TABLE OF CONTENTS
- Definitions
- Purchase and Sale
- Due Diligence
- Closing
- Representations and Warranties
- Covenants
- Conditions Precedent
- Default; Remedies
- Risk Allocation
- Casualty and Condemnation
- Dispute Resolution
- Miscellaneous
- Execution Blocks
Exhibits:
A. Legal Description of the Property
B. Due Diligence Materials Index
C. Form of Bargain and Sale Deed with Covenants Against Grantor’s Acts
D. FIRPTA Affidavit
E. Bill of Sale for Personal Property
F. Assignment of Leases and Contracts
G. Tenant Estoppel Certificate
H. Environmental Indemnity Agreement
I. DOCUMENT HEADER
This Purchase and Sale Agreement (“Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:
Seller: [SELLER LEGAL NAME], a [STATE] [ENTITY TYPE]
Business Address: [ADDRESS]
Buyer: [BUYER LEGAL NAME], a [STATE] [ENTITY TYPE]
Business Address: [ADDRESS]
Seller and Buyer are sometimes referred to individually as a “Party” and collectively as the “Parties.”
Recitals
A. Seller is the owner of the Property (as defined below) located in the State of New Jersey.
B. Buyer desires to purchase, and Seller desires to sell, the Property on the terms and conditions set forth herein.
C. In consideration of the mutual covenants herein, the Parties agree as follows:
II. DEFINITIONS
The following terms, when used with initial capital letters, shall have the meanings set forth below. Defined terms appear alphabetically for ease of reference.
“Additional Deposit” – Defined in Section 2.2(b).
“Affiliate” – Any Person that, directly or indirectly, controls, is controlled by, or is under common control with a Party.
“Agreement” – This Purchase and Sale Agreement, including all Exhibits and Schedules, as the same may be amended.
“Applicable Law” – All federal, state, county, municipal, and local statutes, laws, ordinances, rules, regulations, orders, and directives applicable to the Property or the transaction contemplated herein, including without limitation (i) the New Jersey Industrial Site Recovery Act (“ISRA”), (ii) the New Jersey Site Remediation Reform Act, and (iii) zoning, building, fire, and health codes.
“Business Day” – Any day other than Saturday, Sunday, or a day on which nationally chartered banks in [CITY, STATE] are authorized or required to close.
“Buyer’s Knowledge” – The actual knowledge, without duty of inquiry or investigation, of [NAME/TITLE OF BUYER’S KNOWLEDGE PERSONNEL].
“Closing” – The consummation of the transaction contemplated by this Agreement, to occur on the Closing Date.
“Closing Date” – The date on which Closing occurs, as set forth in Section 4.1.
“Deposit” – Collectively, the Initial Deposit and any Additional Deposit delivered pursuant to Section 2.2.
“Due Diligence Period” – The period commencing on the Effective Date and expiring at 5:00 p.m. Eastern Time on [DATE] (unless terminated earlier pursuant hereto).
“Environmental Laws” – Collectively, all Applicable Laws governing the discharge, release, storage, treatment, generation, transportation, or disposal of Hazardous Substances, including the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9601 et seq.) and the New Jersey Spill Compensation and Control Act.
“Escrow Agent” – [TITLE COMPANY/ESCROW AGENT NAME], as designated in Section 2.2(f).
“Hazardous Substances” – Any hazardous, toxic, or regulated substance, material, or waste as defined, listed, or regulated under Environmental Laws.
“Initial Deposit” – Defined in Section 2.2(a).
“Permitted Exceptions” – Those title exceptions approved or deemed approved by Buyer under Section 3.2.
“Property” – All of Seller’s right, title, and interest in and to: (a) the land described in Exhibit A (the “Land”); (b) all buildings, structures, fixtures, and other improvements located on the Land (collectively, the “Improvements”); (c) all easements, rights, privileges, and appurtenances pertaining to the Land; (d) all leases and tenant security deposits (“Leases”), if any; (e) all assignable permits, licenses, approvals, warranties, and guaranties; and (f) all tangible personal property located on and used in connection with the operation of the Land and Improvements.
“Purchase Price” – The consideration for the Property, as set forth in Section 2.3.
“Seller’s Knowledge” – The actual knowledge, without duty of inquiry or investigation, of [NAME/TITLE OF SELLER’S KNOWLEDGE PERSONNEL].
“Survey” – An ALTA/NSPS Land Title Survey of the Property prepared by a licensed surveyor in accordance with 2021 Minimum Standard Detail Requirements.
“Title Company” – [TITLE COMPANY NAME], who shall also serve as Escrow Agent and issuing agent for the owner’s title policy in accordance with Section 3.2.
[// GUIDANCE: Add or delete definitions to align with transaction specifics. Ensure each defined term is used consistently throughout the Agreement.]
III. OPERATIVE PROVISIONS
2. Purchase and Sale
2.1 Agreement to Sell and Purchase. Subject to the terms and conditions of this Agreement, Seller agrees to sell, assign, and convey to Buyer, and Buyer agrees to purchase from Seller, all of Seller’s right, title, and interest in and to the Property.
2.2 Deposit.
(a) Initial Deposit. Within three (3) Business Days after the Effective Date, Buyer shall deliver to Escrow Agent the sum of [AMOUNT] USD (the “Initial Deposit”) by wire transfer of immediately available funds.
(b) Additional Deposit. If Buyer elects to proceed beyond the Due Diligence Period, Buyer shall, on or before the last day of the Due Diligence Period, deposit an additional [AMOUNT] USD (the “Additional Deposit”) with Escrow Agent.
(c) Application. The Deposit shall be applied to the Purchase Price at Closing or disbursed pursuant to this Agreement.
(d) Non-Refundability. Following the expiration of the Due Diligence Period (unless this Agreement is earlier terminated by Buyer in accordance herewith), the Deposit shall become non-refundable except in the event of Seller Default or failure of a Buyer Closing Condition.
(e) Interest. Interest earned on the Deposit shall follow the disposition of principal.
(f) Escrow Instructions. The Parties shall execute escrow instructions consistent with this Section 2.2. In the event of conflict, this Agreement shall control.
2.3 Purchase Price. The Purchase Price is [AMOUNT] USD, payable as follows:
(a) Deposit credit at Closing; and
(b) The balance of the Purchase Price, by wire transfer of immediately available funds, at Closing.
2.4 Allocation of Purchase Price. Within thirty (30) days after Closing, Buyer and Seller shall agree upon an allocation of the Purchase Price among the Property components for federal and state tax purposes. If the Parties fail to agree, each shall adopt its own allocation consistent with Applicable Law.
3. Due Diligence
3.1 Access; Inspections. During the Due Diligence Period, Buyer and its Representatives may, upon not less than twenty-four (24) hours’ notice, enter the Property at reasonable times to conduct inspections, tests, and investigations, including environmental assessments and zoning/planning reviews, provided that (i) Buyer shall not unreasonably interfere with tenants’ operations; (ii) Buyer shall restore any physical alterations; and (iii) Buyer shall maintain not less than [AMOUNT] USD general liability insurance naming Seller as an additional insured.
3.2 Title and Survey Review.
(a) Title Commitment. Within five (5) Business Days after the Effective Date, Seller shall cause Title Company to deliver to Buyer a commitment for an ALTA owner’s policy of title insurance (the “Commitment”) together with copies of all underlying documents.
(b) Survey. Buyer shall obtain the Survey at its cost.
(c) Objections. Buyer shall have until the expiration of the Due Diligence Period to deliver written notice of title or Survey objections. Seller shall have five (5) Business Days to elect to cure or decline to cure. Failure to respond constitutes election not to cure. If Seller declines or fails to cure, Buyer may (i) terminate this Agreement and receive a refund of the Deposit or (ii) waive such objections, in which case they become Permitted Exceptions.
3.3 Environmental Assessments.
(a) Phase I. Buyer may obtain a Phase I Environmental Site Assessment (“ESA”) in accordance with ASTM Standard E1527-21.
(b) Sampling. Invasive sampling (e.g., Phase II) shall require Seller’s prior written consent, not to be unreasonably withheld.
(c) ISRA Applicability. Seller shall, within five (5) Business Days after the Effective Date, deliver an ISRA applicability affidavit. If ISRA is applicable, the Parties shall cooperate to satisfy ISRA prior to Closing as set forth in Section 6.2.
3.4 Zoning and Land Use Review. Buyer may review all zoning ordinances, land use approvals, certificates of occupancy, and code compliance documents. Seller shall cooperate with any municipal zoning officer requests, including executing customary owner authorization forms.
3.5 Buyer’s Right to Terminate. Buyer may, for any or no reason, terminate this Agreement by written notice to Seller and Escrow Agent on or before the expiration of the Due Diligence Period, in which event the Deposit shall be refunded to Buyer (less independent consideration of $100, which shall be paid to Seller and retained as consideration for the option herein granted).
4. Closing
4.1 Closing Date. The Closing shall occur on [DATE] (or, if that date is not a Business Day, on the next Business Day) at the offices of Title Company or via escrow (“Closing Date”), unless extended pursuant to the terms hereof.
4.2 Seller’s Closing Deliveries.
(a) Duly executed and acknowledged Bargain and Sale Deed with Covenants Against Grantor’s Acts (“Deed”) in the form of Exhibit C;
(b) Bill of Sale (Exhibit E);
(c) Assignment of Leases and Contracts (Exhibit F);
(d) Tenant Estoppel Certificates for not less than [PERCENTAGE]% of rentable area;
(e) FIRPTA Affidavit (Exhibit D);
(f) Bring-down certificates for Seller’s representations;
(g) Evidence of authority, including resolutions and incumbency certificates; and
(h) Such additional documents as Title Company may reasonably require to issue the owner’s policy free of monetary liens other than Permitted Exceptions.
4.3 Buyer’s Closing Deliveries.
(a) Wire transfer of the Purchase Price balance;
(b) Counterparts of documents listed in Section 4.2 requiring Buyer’s signature;
(c) Evidence of authority; and
(d) Such affidavits and certificates as Title Company may reasonably require.
4.4 Prorations and Adjustments. Taxes, assessments (on a cash or accrual basis as elected in writing by the Parties), rents, operating expenses, and utility charges shall be prorated as of 11:59 p.m. on the day preceding the Closing Date. Security deposits shall be credited to Buyer.
4.5 Recording and Transfer Taxes. The Deed shall be recorded at Buyer’s expense. The New Jersey Realty Transfer Fee and any “Mansion Tax” shall be paid by [PARTY] pursuant to N.J.S.A. 46:15-7 et seq.
IV. REPRESENTATIONS & WARRANTIES
5.1 Seller’s Representations. Seller represents and warrants to Buyer, as of the Effective Date and again as of Closing, that:
(a) Organization/Authority. Seller is duly organized, validly existing, and in good standing under the laws of its formation jurisdiction and is qualified to do business in New Jersey.
(b) Title. Seller holds good and marketable fee simple title to the Land and Improvements, free and clear of liens other than Permitted Exceptions.
(c) No Violations. To Seller’s Knowledge, Seller has not received written notice of any uncured violation of Applicable Law, including environmental, building code, or zoning violations.
(d) Environmental Matters. Except as disclosed in the Due Diligence Materials, Seller has not received written notice of any Release of Hazardous Substances requiring remediation under Environmental Laws.
(e) Leases. The Rent Roll delivered to Buyer is true and correct in all material respects.
(f) Contracts. Seller is not in material default under any assignable service contract affecting the Property.
(g) Litigation. There is no pending or, to Seller’s Knowledge, threatened litigation or condemnation proceeding affecting the Property.
5.2 Buyer’s Representations. Buyer represents and warrants that:
(a) Organization/Authority. Buyer is duly organized and in good standing and has requisite authority to enter into and perform this Agreement.
(b) Funding. Buyer has, or will have at Closing, sufficient funds to consummate this transaction.
(c) OFAC. Neither Buyer nor its principals is affiliated with any Person identified on OFAC’s Specially Designated Nationals and Blocked Persons List.
5.3 Survival. Seller’s representations in Sections 5.1(c), (d), and (g) shall survive Closing for [SURVIVAL PERIOD] months; all other representations shall merge into the Deed.
5.4 Disclosure Schedules. Any matters disclosed in a schedule shall be deemed disclosed for all representations to which such matter logically applies.
V. COVENANTS & RESTRICTIONS
6.1 Pre-Closing Operations. From the Effective Date until Closing, Seller shall:
(a) Operate the Property in the ordinary course consistent with past practices;
(b) Not enter into any new Lease or service contract exceeding one (1) year or materially modify an existing Lease, without Buyer’s consent (not to be unreasonably withheld);
(c) Maintain all existing insurance coverage; and
(d) Promptly notify Buyer of any material casualty, condemnation, or new violation notice.
6.2 ISRA Compliance.
(a) Determination. If ISRA applies, Seller shall, at its sole cost, file the required General Information Notice and engage a Licensed Site Remediation Professional (“LSRP”) acceptable to Buyer.
(b) Obligations. Seller shall complete all required preliminary assessments, remedial investigations, and remedial actions necessary to obtain an Unrestricted Use Response Action Outcome (“RAO”) letter prior to Closing, or, if Buyer consents, fund an escrow agreed upon by the Parties to secure completion post-Closing.
(c) Buyer Cooperation. Buyer shall reasonably cooperate, including executing access or authorization forms, provided Buyer incurs no material expense.
6.3 Post-Closing Cooperation. Each Party shall furnish records or testimony reasonably required for post-Closing tax filings, audits, or ISRA compliance, with the requesting Party reimbursing out-of-pocket costs.
6.4 Notice and Cure. Each Party shall promptly notify the other of any breach of representation or covenant and shall have five (5) Business Days to cure pre-Closing.
VI. CONDITIONS PRECEDENT
7.1 Buyer’s Conditions. Buyer’s obligation to close is conditioned upon:
(a) Truthfulness of Seller’s representations;
(b) Seller’s performance of its covenants;
(c) Title Company readiness to issue an ALTA owner’s policy (2006 form or latest) for the Purchase Price, subject only to Permitted Exceptions;
(d) Receipt of RAO letter or ISRA escrow as required; and
(e) Absence of a material adverse change to the Property caused by casualty or condemnation not addressed under Article 10.
7.2 Seller’s Conditions. Seller’s obligation to close is conditioned upon:
(a) Truthfulness of Buyer’s representations;
(b) Buyer’s performance of its covenants; and
(c) Receipt of the Purchase Price.
7.3 Failure of Condition. If a Party’s condition precedent is not satisfied or waived by Closing, such Party may terminate this Agreement by notice, whereupon the Deposit shall be disbursed in accordance with this Agreement and neither Party shall have further liability except as expressly stated herein.
VII. DEFAULT & REMEDIES
8.1 Seller Default. If Seller defaults, Buyer may:
(a) Elect specific performance;
(b) Terminate this Agreement and receive a refund of the Deposit plus documented out-of-pocket expenses not to exceed [CAP]; or
(c) Pursue all other remedies at law or in equity, subject to Section 9.4 (Liability Cap).
8.2 Buyer Default. If Buyer defaults prior to Closing, Seller’s sole and exclusive remedy shall be to terminate this Agreement and receive the Deposit as liquidated damages, the Parties acknowledging that actual damages would be difficult to ascertain and the Deposit constitutes a reasonable estimate thereof.
8.3 Specific Performance. The Parties acknowledge that the Property is unique and that Buyer would not have an adequate remedy at law for Seller’s failure to convey the Property in accordance with this Agreement; therefore, Buyer shall be entitled to seek specific performance, injunctive relief, or both.
8.4 Attorneys’ Fees. The prevailing Party in any action arising out of this Agreement shall be entitled to recover reasonable attorneys’ fees and court costs.
VIII. RISK ALLOCATION
9.1 Environmental Indemnity. From and after Closing, Seller shall indemnify, defend, and hold harmless Buyer, its Affiliates, and their respective officers, directors, and employees (“Buyer Indemnified Parties”) from and against any Losses arising out of:
(a) A Release of Hazardous Substances at, on, under, or migrating from the Property attributable to pre-Closing activities of Seller or its tenants; or
(b) Any failure of Seller to comply with ISRA or Environmental Laws prior to Closing.
[// GUIDANCE: For transactions involving significant environmental risk, attach a stand-alone Environmental Indemnity Agreement as Exhibit H with escrow-backed security.]
9.2 Buyer Indemnity. Buyer shall indemnify, defend, and hold harmless Seller and its Affiliates for Losses arising out of Buyer’s or its agents’ entry upon the Property prior to Closing, including bodily injury and property damage, except to the extent caused by Seller’s negligence or willful misconduct.
9.3 Insurance. Buyer shall maintain commercial general liability insurance of not less than [AMOUNT] USD per occurrence prior to Closing, naming Seller as additional insured.
9.4 Liability Cap; Basket. Except for (i) fraud, (ii) willful misconduct, (iii) breaches of covenants to be performed after Closing, and (iv) indemnification obligations under Section 9.1, Seller’s aggregate liability under this Agreement shall not exceed [CAP AMOUNT] USD (the “Liability Cap”), and neither Party shall be liable for any claim unless the aggregate amount of all claims exceeds [BASKET AMOUNT] USD, whereupon the claimant may recover the full amount (above the basket) up to the Liability Cap.
9.5 Force Majeure. Neither Party shall be liable for failure to perform caused by acts of God, pandemic, war, terrorism, or government orders, provided that the affected Party gives notice within five (5) Business Days and performance is resumed promptly thereafter; provided, however, that monetary obligations shall not be excused.
IX. CASUALTY AND CONDEMNATION
10.1 Casualty. If, prior to Closing, the Property suffers damage by casualty exceeding [THRESHOLD]% of the Purchase Price, Buyer may (a) terminate this Agreement and receive a refund of the Deposit or (b) proceed to Closing with an assignment of insurance proceeds and a credit for any deductible.
10.2 Condemnation. If, prior to Closing, any material condemnation proceeding is commenced, Buyer may elect to terminate this Agreement by notice to Seller within ten (10) Business Days after receipt of Seller’s notice of such proceeding, in which event the Deposit shall be refunded. Absent termination, Buyer shall receive all condemnation awards.
X. DISPUTE RESOLUTION
11.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey, without regard to conflicts-of-laws principles.
11.2 Forum Selection. Any lawsuit arising under this Agreement shall be brought exclusively in the state courts sitting in [COUNTY], New Jersey, and each Party irrevocably submits to such jurisdiction.
11.3 Waiver of Jury Trial. [OPTIONAL – DELETE IF NOT AGREED] EACH PARTY HEREBY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF THIS AGREEMENT.
11.4 Optional Arbitration. [OPTIONAL – STRIKE IF NOT ELECTED] Upon written election of either Party delivered prior to commencement of litigation, any dispute shall be resolved by binding arbitration administered by the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules. The arbitration shall be held in [CITY], New Jersey before a single arbitrator who is a licensed New Jersey attorney experienced in commercial real estate law. Judgment on the award may be entered in any court of competent jurisdiction. The arbitrator shall have authority to award specific performance.
11.5 Equitable Relief. Nothing in this Article 11 shall limit a Party’s right to seek provisional or injunctive relief, including specific performance, in a court of competent jurisdiction to preserve the status quo pending resolution of the dispute.
XI. MISCELLANEOUS
12.1 Notices. All notices shall be in writing and delivered by (i) personal delivery, (ii) reputable overnight courier, or (iii) electronic mail with confirmation of receipt, to the addresses set forth below, and shall be deemed given upon receipt (or refusal). Either Party may change its notice address by notice to the other.
Seller Notices To:
[NAME/TITLE]
[ADDRESS]
Email: [EMAIL]
Buyer Notices To:
[NAME/TITLE]
[ADDRESS]
Email: [EMAIL]
12.2 Entire Agreement. This Agreement (including Exhibits) constitutes the entire agreement between the Parties and supersedes all prior negotiations or agreements.
12.3 Amendments and Waivers. No amendment or waiver shall be effective unless in writing signed by the Party to be bound.
12.4 Assignment. Buyer may assign its rights to an Affiliate upon not less than five (5) Business Days’ notice, provided the assignee assumes all obligations herein. Any other assignment requires Seller’s prior written consent, which may be withheld in Seller’s sole discretion.
12.5 Severability. If any provision is held invalid, the remainder of this Agreement shall remain in full force, and the invalid provision shall be reformed to reflect the Parties’ intent to the maximum extent permitted by law.
12.6 Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.
12.7 No Third-Party Beneficiaries. Nothing herein is intended to confer rights upon any Person other than the Parties.
12.8 Interpretation. Headings are for convenience only and shall not affect interpretation. The term “including” means “including without limitation.”
12.9 Counterparts; Electronic Signatures. This Agreement may be executed in multiple counterparts, all of which together constitute one instrument. Signatures delivered by electronic transmission (e.g., PDF, DocuSign) shall be deemed originals.
XII. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
SELLER:
[SELLER LEGAL NAME]
By: _____
Name: [NAME]
Title: [TITLE]
Date: _______
BUYER:
[BUYER LEGAL NAME]
By: _____
Name: [NAME]
Title: [TITLE]
Date: _______
[// GUIDANCE: Insert notary acknowledgments if the Deed or state law requires the Agreement itself to be notarized. Customary practice in NJ is to notarize the Deed, not the PSA.]
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
[INSERT OR ATTACH METES AND BOUNDS DESCRIPTION]
EXHIBIT B
DUE DILIGENCE MATERIALS INDEX
1. Current Rent Roll
2. Copies of all Leases and Amendments
3. Service Contracts
4. Real Estate Tax Bills (3 years)
5. Environmental Reports (Phase I/II, NJDEP correspondence)
6. Zoning and Land Use Approvals
7. Certificates of Occupancy
8. ALTA Survey (if existing)
9. Utility Bills (12 months)
[// GUIDANCE: Tailor exhibits to reflect actual materials delivered.]
Additional Exhibits follow the forms referenced above.
[END OF DOCUMENT]