COMMERCIAL PURCHASE AND SALE AGREEMENT
(Pennsylvania – Commercial Real Estate)
[// GUIDANCE: This template is drafted to Pennsylvania practice standards. Bracketed items must be tailored. Remove guidance comments before circulation.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Purchase and Sale; Consideration
- Conditions Precedent & Subsequent
- Representations and Warranties
- Covenants and Restrictions
- Closing Deliverables
- Default and Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
- Exhibits & Schedules
1. DOCUMENT HEADER
This Commercial Purchase and Sale Agreement (“Agreement”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:
• [SELLER LEGAL NAME], a [STATE OF ORGANIZATION & ENTITY TYPE] (“Seller”); and
• [BUYER LEGAL NAME], a [STATE OF ORGANIZATION & ENTITY TYPE] (“Buyer”).
Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, the Property (as defined below) upon the terms and conditions set forth herein.
2. DEFINITIONS
For ease of reference, the following terms shall have the meanings assigned below. Capitalized terms not defined in this Section shall have the meanings otherwise given in this Agreement.
“Affected Party” – the Party claiming Force Majeure.
“Affiliate” – any entity controlling, controlled by, or under common control with a Party.
“Allocated Purchase Price” – the portion of the Purchase Price allocated to each component of the Property as set forth on Schedule 2.
“Applicable Law” – collectively, (i) the laws of the Commonwealth of Pennsylvania and the United States, (ii) all ordinances, regulations, codes, orders, and directives of Governmental Authorities having jurisdiction, including Environmental Laws and Zoning Laws.
“Business Day” – any day other than a Saturday, Sunday, or federal holiday.
“Closing” – the consummation of the sale and purchase contemplated hereunder.
“Closing Date” – the date on which the Closing occurs, anticipated to be [CLOSING DATE].
“Deposit” – the earnest money deposit described in Section 3.3.
“Due Diligence Period” – the period described in Section 4.1.
“Environmental Laws” – all Applicable Laws relating to pollution, protection of the environment, or the storage, generation, use, handling, transportation, treatment, or disposal of Hazardous Substances.
“Escrow Agent” – [TITLE/ESCROW COMPANY], or any successor escrow agent mutually acceptable to the Parties.
“Excluded Property” – property of Seller not included in the sale, listed on Schedule 1.
“Governmental Authority” – any federal, state, county, municipal or other political subdivision, administrative or regulatory body, or court having jurisdiction.
“Hazardous Substances” – substances, wastes, pollutants, or contaminants regulated under Environmental Laws.
“Inspection Materials” – due diligence materials delivered or made available by Seller to Buyer.
“Intangible Property” – all intangible rights appertaining to the Real Property, including warranties, permits, and licenses, to the extent transferable.
“Lease(s)” – existing leases affecting the Real Property, identified on Schedule 3.
“Property” – collectively, the Real Property, Improvements, Personal Property, Intangible Property, and Assigned Contracts.
“Purchase Price” – the consideration for the Property stated in Section 3.1.
“Real Property” – the land described in Exhibit A, together with all easements, hereditaments, and appurtenances.
“Specific Performance” – the equitable remedy described in Section 8.4.
“Survey” – an ALTA/NSPS Land Title Survey of the Real Property obtained by Buyer under Section 4.2.
“Title Commitment” – the title insurance commitment issued by the Title Company under Section 4.2.
“Title Company” – [TITLE INSURANCE COMPANY].
“Zoning Laws” – Applicable Laws governing land use, zoning, or development of the Real Property.
3. PURCHASE AND SALE; CONSIDERATION
3.1 Purchase and Sale. Subject to the terms of this Agreement, Seller agrees to sell, and Buyer agrees to purchase, the Property for an aggregate cash purchase price of $[PURCHASE PRICE] (the “Purchase Price”), as adjusted under Section 3.2.
3.2 Adjustments. The Purchase Price shall be adjusted at Closing for prorations, escrows, and credits described in Schedule 4.
3.3 Deposit.
(a) Within two (2) Business Days after the Effective Date, Buyer shall deposit $[DEPOSIT AMOUNT] (the “Deposit”) with Escrow Agent.
(b) The Deposit shall be applicable to the Purchase Price and held in an interest-bearing account.
(c) The Deposit shall become non-refundable to Buyer upon expiration of the Due Diligence Period, except as otherwise provided herein.
3.4 Payment of Purchase Price. At Closing, Buyer shall deliver the Purchase Price, less the Deposit and subject to adjustments, to Escrow Agent by wire transfer of immediately available funds.
4. CONDITIONS PRECEDENT & SUBSEQUENT
4.1 Due Diligence Period. Buyer shall have until 5:00 p.m. Eastern Time on the date that is [NUMBER] days after the Effective Date (“Due Diligence Period”) to conduct inspections of the Property. Buyer may terminate this Agreement for any reason before expiration of the Due Diligence Period by written notice, in which event the Deposit shall be refunded to Buyer.
4.2 Title and Survey.
(a) Title Commitment. Within five (5) Business Days after the Effective Date, Seller shall cause Title Company to deliver to Buyer a Title Commitment for an owner’s policy of title insurance (the “Title Policy”) in the amount of the Purchase Price.
(b) Survey. Buyer may, at its sole cost, cause the Survey to be prepared.
(c) Title Objections. Buyer shall have until the end of the Due Diligence Period to object in writing to any exceptions shown in the Title Commitment or matters disclosed by the Survey (“Title Objection Notice”). Seller shall have five (5) Business Days thereafter to elect to cure such objections. Failure to timely elect shall be deemed an election not to cure.
(d) Zoning Compliance. During the Due Diligence Period, Buyer may obtain a zoning report. Any zoning non-conformity shall be treated as a title defect.
4.3 Environmental Reports; Phase I. Buyer may obtain at its sole cost a Phase I Environmental Site Assessment compliant with ASTM E1527-21. If recommended, Buyer may perform additional investigations.
4.4 Financing Contingency [OPTIONAL]. [Buyer’s obligation to close is conditioned upon securing financing described in Exhibit B.]
4.5 Seller’s Conditions. Seller’s obligation to close is conditioned upon (i) Buyer’s timely delivery of the Purchase Price, and (ii) Buyer’s representations remaining true.
4.6 Failure of Conditions. If any condition precedent is not satisfied or waived on or before the applicable date, the Party for whose benefit the condition exists may terminate this Agreement by notice to the other Party, whereupon the Deposit shall be handled pursuant to Section 8.3.
5. REPRESENTATIONS AND WARRANTIES
5.1 Seller’s Representations. Seller represents and warrants to Buyer that as of the Effective Date and as of Closing:
a) Organization; Authority. Seller is duly organized, validly existing, and in good standing under Applicable Law and has full power to execute this Agreement.
b) Title. Seller owns good and marketable fee simple title to the Real Property, free and clear of all liens except Permitted Exceptions.
c) No Conflicts. Execution and performance do not violate any agreement binding on Seller.
d) Leases. The Lease schedule is true and complete; no defaults exist to Seller’s knowledge.
e) Environmental Compliance. To Seller’s knowledge, (i) Seller has received no written notice of violation of Environmental Laws; (ii) no Hazardous Substances are present above reportable quantities except as disclosed on Schedule 5(e).
f) Zoning. Seller has not received written notice of any pending rezoning, special assessment, or condemnation.
g) Litigation. No litigation or governmental proceeding is pending or, to Seller’s knowledge, threatened relating to the Property.
h) Foreign Person. Seller is not a “foreign person” under 26 U.S.C. § 1445(f)(3).
5.2 Buyer’s Representations. Buyer represents and warrants to Seller that:
a) Organization; Authority. Buyer is duly organized, validly existing, and has authority to enter into this Agreement.
b) No Conflicts. Execution and performance do not violate Buyer’s organizational documents or agreements.
c) Financial Capacity. Buyer has funds or binding financing commitments to pay the Purchase Price.
5.3 Survival; Limitations.
(a) Survival. Seller’s representations shall survive Closing for [SURVIVAL PERIOD] months, except the Fundamental Representations (authority, title, environmental) which shall survive for [LONGER PERIOD].
(b) Knowledge Qualifiers. “Seller’s knowledge” means the actual knowledge of [NAME OR TITLE], without duty of inquiry.
(c) Cap on Liability. Seller’s post-closing liability for breaches of non-Fundamental Representations shall not exceed $[CAP AMOUNT] in the aggregate.
6. COVENANTS AND RESTRICTIONS
6.1 Interim Covenants of Seller. 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 create liens, encumbrances, or new Leases without Buyer’s prior written consent.
c) Maintain existing insurance coverages.
d) Provide prompt notice to Buyer of any event materially affecting the Property.
6.2 Buyer’s Covenants. Buyer shall:
a) Conduct inspections in a manner that does not unreasonably interfere with tenants or operations.
b) Indemnify Seller against mechanics’ liens arising from Buyer’s inspections.
6.3 Post-Closing Covenants.
a) Seller shall reasonably cooperate with Buyer, at no cost to Seller, in transferring utilities, permits, and Intangible Property.
b) Buyer shall comply with Pennsylvania Act 2 (Land Recycling Program) if Buyer initiates remediation post-closing.
7. CLOSING DELIVERABLES
7.1 Seller Closing Deliverables.
a) Deed. Special Warranty Deed in recordable form conveying the Real Property subject only to Permitted Exceptions.
b) Bill of Sale for Personal and Intangible Property.
c) Assignment and Assumption of Leases and Contracts.
d) FIRPTA Affidavit.
e) Owner’s Affidavit and Gap Indemnity required by Title Company.
f) Keys, codes, and originals of documents in Seller’s possession.
7.2 Buyer Closing Deliverables.
a) Purchase Price.
b) Assignment and Assumption Agreements executed by Buyer.
c) Evidence of authority and resolutions.
d) Pennsylvania Realty Transfer Tax Statement of Value (REV-183).
8. DEFAULT AND REMEDIES
8.1 Buyer Default. If Buyer fails to close when required while Seller is ready, willing, and able, Seller’s sole remedy shall be to receive the Deposit as liquidated damages, the Parties acknowledging that Seller’s actual damages would be difficult to ascertain. [// GUIDANCE: Remove if specific performance against Buyer is desired.]
8.2 Seller Default. If Seller fails to close when required while Buyer is ready, willing, and able, Buyer may, as its sole and exclusive remedies:
a) Terminate this Agreement and receive a refund of the Deposit plus reimbursement of documented out-of-pocket costs not to exceed $[CAP ON COSTS]; or
b) Seek Specific Performance in any court of competent jurisdiction.
8.3 Failure of Conditions. Upon lawful termination under Section 4.6, the Deposit shall be returned to Buyer, and neither Party shall have further liability except for obligations that expressly survive termination.
8.4 Specific Performance; Injunctive Relief. The Parties acknowledge that the Property is unique and that monetary damages may be inadequate; therefore, subject to Section 8.1, either Party may seek Specific Performance or injunctive relief to enforce this Agreement.
8.5 Attorneys’ Fees. The prevailing Party in any dispute shall be entitled to reasonable attorneys’ fees and costs.
9. RISK ALLOCATION
9.1 Environmental Indemnity.
(a) From and after Closing, Seller shall indemnify, defend, and hold Buyer harmless from Losses arising from (i) pre-Closing violations of Environmental Laws; or (ii) releases of Hazardous Substances occurring prior to Closing.
(b) Buyer shall indemnify Seller for Losses arising from post-Closing violations or releases caused by Buyer.
(c) The indemnities in this Section shall survive Closing for [INDEMNITY SURVIVAL PERIOD] years and are subject to the liability caps in Section 5.3(c).
9.2 Limitation of Liability. Except for the Fundamental Representations, Environmental Indemnity, fraud, or willful misconduct, neither Party’s aggregate liability shall exceed $[LIABILITY CAP]. Neither Party shall be liable for incidental, consequential, or punitive damages.
9.3 Insurance. Until Closing, Seller shall maintain its existing insurance. Buyer shall obtain, effective as of Closing, (i) commercial general liability insurance of not less than $[AMOUNT] per occurrence, and (ii) property insurance covering full replacement cost of the Improvements.
9.4 Casualty; Condemnation.
(a) Seller shall promptly notify Buyer of any casualty or condemnation.
(b) If damage exceeds [DOLLAR THRESHOLD OR % of Purchase Price], Buyer may terminate this Agreement and receive the Deposit, or proceed to Closing and receive all insurance proceeds or condemnation awards.
9.5 Force Majeure. If performance is delayed by an event beyond the reasonable control of the Affected Party (including acts of God, governmental orders, or pandemics), the time for performance shall be extended for the period of delay, not to exceed [FORCE MAJEURE CAP] days.
10. DISPUTE RESOLUTION
10.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to conflict-of-laws principles.
10.2 Forum Selection. Any action arising from or relating to this Agreement shall be brought exclusively in the state courts located in [COUNTY], Pennsylvania.
10.3 Arbitration [OPTIONAL]. [If the box below is initialed by both Parties, all disputes shall be resolved by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules.
[ ] Seller Initials _ [ ] Buyer Initials ___ ]
10.4 Jury Trial Waiver [OPTIONAL]. EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION RELATING TO THIS AGREEMENT.
10.5 Specific Performance. Nothing in this Section shall limit either Party’s right to seek Specific Performance or injunctive relief in a court of competent jurisdiction.
11. GENERAL PROVISIONS
11.1 Notices. All notices shall be in writing and delivered (i) by hand, (ii) via nationally recognized overnight courier, or (iii) by email with confirmation of receipt, to the addresses set forth below each Party’s signature. Notice is deemed given upon delivery or refusal.
11.2 Amendment and Waiver. No amendment or waiver shall be effective unless in a writing signed by the Party against whom enforcement is sought.
11.3 Assignment. Buyer may not assign this Agreement without Seller’s prior written consent, except to a Buyer Affiliate that assumes all obligations herein. Any assignment in violation of this Section is void.
11.4 Successors and Assigns. This Agreement binds and benefits the Parties and their permitted successors and assigns.
11.5 Severability. If any provision is held invalid, the remaining provisions shall remain in full force and the invalid provision shall be reformed to the minimum extent necessary to achieve its original intent.
11.6 Merger Clause. This Agreement, together with the Exhibits and Schedules, constitutes the entire agreement between the Parties and supersedes all prior understandings.
11.7 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original, and all of which constitute one instrument. Electronic and facsimile signatures shall be deemed originals.
11.8 Further Assurances. Each Party shall execute and deliver such documents and take such actions as reasonably requested to effectuate the purposes of this Agreement.
11.9 Confidentiality. Except as required by law, neither Party shall disclose the terms of this Agreement to third parties other than affiliates, advisors, or financing sources who agree to keep such information confidential.
12. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
SELLER:
[SELLER LEGAL NAME]
By: ____
Name: ____
Title: ____
Date: ______
Address for Notices:
Email: _____
BUYER:
[BUYER LEGAL NAME]
By: ____
Name: ____
Title: ____
Date: ______
Address for Notices:
Email: _____
COMMONWEALTH OF PENNSYLVANIA )
: ss.
COUNTY OF ____ )
On this _ day of _, 20, before me, the undersigned, a Notary Public in and for the Commonwealth of Pennsylvania, personally appeared ________, who acknowledged that (he/she) executed the foregoing instrument on behalf of the entity identified therein.
Notary Public
My Commission Expires: ______
13. EXHIBITS & SCHEDULES
Exhibit A Legal Description of the Real Property
Exhibit B Financing Terms [if applicable]
Schedule 1 Excluded Property
Schedule 2 Allocated Purchase Price
Schedule 3 Rent Roll / Leases
Schedule 4 Prorations and Closing Adjustments
Schedule 5(e) Environmental Disclosures
[// GUIDANCE: Add or delete exhibits and schedules as needed. Ensure the legal description is survey-consistent and recordable.]
[// GUIDANCE: Verify Pennsylvania Realty Transfer Tax allocations with local counsel. Consider municipal transfer taxes (e.g., City of Philadelphia). Review environmental indemnities for Act 2 compatibility, and confirm Zoning Hearing Board requirements for any contemplated post-closing development. Tailor liability caps to client’s risk tolerance.]