Contract of purchase and sale of real estate is the most common type of contracts in the field of real estate transactions. Such contract can relate to both the purchase of housing or land plot for personal use and the purchase of a large industrial facility or property complex.
The essential terms of the contract of purchase and sale of real estate are the subject, price and term of validity of the contract. In addition, the contract is always notarized. Without fulfilling these terms, the contract is deemed void.
Contract of purchase and sale of real estate should not be limited to the essential terms that are determined by the legislation, therefore, VigoLex recommends, in addition to the essential contractual terms and conditions, to include the following terms in the contract of purchase and sale of real estate:
- procedure and terms of acceptance and transfer of the real estate;
- procedure for checking the object for damages, defects, etc., procedure for drawing up a protocol of such an inspection, etc.;
- payment procedure in accordance to contract: is it prepayment, or paid at the day of effective signing of the contract, or upon signing the protocol of the inspection of the real estate object, etc.;
- seller’s guarantees: that he/she has the right to sign the contract, that he/she confirms the absence of encumbrances, open legal proceedings, claims of third parties, etc.in relation to this real estate object, etc.;
- terms on the parties’ responsibility: the contract for the sale and purchase of real estate should provide for what actions the party of the contract should be responsible for and what kind of responsibility it should be – payment of a fine to the other party, termination of the contract, etc.;
- procedure and terms of the contract cancellation: it is important to provide that you have the right to cancel the contract as soon as possible with the return of your paid funds in certain circumstances, for example, if the seller conceals the fact of seizure of the real estate object, or if the buyer conceals the fact that he or shedoes not have the right to sign this contract.
In addition, the third party involved of such contract can very often be a realtor – his or her role may not be regulated within the scope of the contract of purchase and sale of real estate, since the relations between him or her and the party of the contract must be regulated by a separate service contract. An exception to this rule is a situation where a realtor acts as a representative of a party of the contract and signs the contract on tis behalf – then the realtor must have a power of attorney from such party to enter contract, and the contract itself should indicate that the realtor acts as a representative for and on behalf of such a party of the contract.
VigoLex team will be eager to provide you with the services of drafting a contract of purchase and sale of real estate and/or its legal support and representation of interests within the framework of such a transaction.