Commercial Psa

Purchase and Sale Agreement — Commercial Real Estate

Drafts a litigation-ready PSA for commercial property transfers, ensuring enforceability under applicable state law.

Quick Start

1. Collect prerequisites (see below). Do NOT draft if deal terms are insufficient — request missing info first.
2. Extract data points from uploaded documents.
3. Draft the PSA following the output structure.
4. Run the final checks.

Prerequisites

1. Parties — exact legal names, entity types, states of formation, addresses
2. Property — legal description, address, tax parcel ID, improvements
3. Deal terms — purchase price, earnest money, closing timeline, financing
4. Title commitment and existing survey (if available)
5. Lease schedule — rent roll, all leases/amendments (income-producing properties)
6. Environmental — Phase I ESA or known conditions
7. Service contracts — management, maintenance, vendor agreements
8. Client role — buyer or seller; risk tolerance and priorities

Document Extraction

Before drafting, extract from uploaded materials:

Output Structure

1. Header & Parties

• Title: "PURCHASE AND SALE AGREEMENT"
• Effective date: date of last signature unless specified otherwise
• Full party ID: legal name, entity type, state of formation, principal + notice address
• Identify parent/guarantor relationships for SPEs or multi-tiered entities

2. Property Description & Purchase Price

Property description: street address, common name, legal description (Exhibit A), county/state, tax parcel ID, acreage/SF, improvement summary, appurtenant rights, personal property schedule (Exhibit B — conveys as-is without warranty).

Price structure:

All closing payments by wire of immediately available federal funds.

3. Title Review & Survey

Title: Seller delivers commitment within 10–15 days of effective date with all Schedule B exception docs. Buyer review: 10–15 days. Distinguish mandatory cure defects (monetary liens, marketable fee simple issues) from voluntary (easements, CCRs). Seller response: 10–15 days. Buyer election: 5–10 days to accept or terminate. Mandatory cure survives closing.

Survey: ALTA/NSPS with Table A items (improvements, zoning/setbacks, parking, utilities, flood zone). Certified to Buyer, lender, title company. Buyer review: 10–15 days. Seller cures encroachments, boundary disputes, zoning violations.

4. Due Diligence

Period: 30 days (single-tenant) to 60–90 days (complex/multi-tenant/environmental). Time is of the essence.

Access: 24–48 hours' notice, business hours. Coordinate tenant access through Seller/PM.

Scope: Physical (building systems, structure, utilities) | Environmental (Phase I per ASTM E1527 [VERIFY current edition]; Phase II if RECs) | Financial — income properties (leases, rent rolls, operating statements, capex) | Regulatory (zoning, ADA, COs, permits).

Buyer obligations: CGL insurance ≥ $1M/$2M aggregate naming Seller as additional insured; no interference with operations; repair damage; bear all costs.

Seller cooperation: Provide all property documents; may require confidentiality; may redact tenant confidential business info (not lease terms).

Termination: Buyer may terminate for any/no reason by 5:00 PM (property TZ) on last DD day. On termination: earnest money refunded in 3–5 business days; Buyer delivers third-party reports (retains work product). If NOT terminated: earnest money becomes non-refundable (except Seller default or express contingency failure).

5. Representations & Warranties

Seller reps (true as of effective date and closing): authority/organization | good and marketable fee simple title | no pending/threatened litigation or condemnation | environmental compliance (knowledge-qualified) | zoning/code compliance (knowledge-qualified) | leases: rent roll accurate, no defaults, deposits held per law | financial statements accurate | all contracts/options disclosed.

Knowledge qualifier: "To Seller's actual knowledge without independent investigation" for environmental and compliance reps.

Buyer reps: Authority/capacity | as-is acknowledgment based on own investigation (does NOT limit remedies for breach of express reps or fraud).

Survival & caps: 12–18 months | de minimis threshold $10K–$25K | aggregate cap 5–10% of price | fraud: unlimited, no caps.

6. Closing

Date: Date certain or formula (e.g., 30 days post-DD). Time is of the essence; 15–30 day extension for title cure.

Seller delivers: Special warranty deed | bill of sale (Exhibit B, as-is) | FIRPTA certificate (15% withholding if foreign [VERIFY rate under IRC §1445]) | owner's affidavit | assignment of leases (with Buyer assumption) | tenant estoppels | assignment of contracts/warranties | keys/codes | updated certified rent roll | licenses/permits/COs | settlement statement | entity authority docs | transfer tax declarations.

Buyer delivers: Purchase price (wire, net of deposits/financing ± prorations) | entity authority docs | assumption agreements | lender-required docs.

7. Prorations & Adjustments

Prorate as of 11:59 PM day before closing:

• Taxes — most recent bill; true-up within 30 days of actual bill
• Rent (income properties) — collected (not accrued); post-closing collections: current first, then delinquent
• Security deposits — transfer or credit; Buyer assumes return obligations
• Operating expenses — utilities, insurance, CAM, management fees (prepaid/accrued)
• TI/leasing commissions — Seller responsible for pre-closing lease obligations; holdback if incomplete
• Special assessments — allocate per agreement

Post-closing adjustment period: 90–120 days.

8. Default & Remedies

Seller default — Buyer elects: (a) Terminate: full earnest money refund + reasonable OOP expenses (cap $25K–$50K); OR (b) Specific performance (may record lis pendens).

Buyer default — Seller's sole remedy: Terminate and retain earnest money as liquidated damages. Include enforceability language (reasonable pre-estimate, not a penalty). Escrow agent: notice, cure period, interpleader if disputed.

General: Written notice + 5–10 business day cure. No cure period for failure to close, repudiation, or fraud. Prevailing party fees optional (advise client it cuts both ways).

9. General Provisions

• Notices: Personal delivery, overnight courier, email (with confirmation), certified mail RRR. Deemed delivered: same day / next business day / 3 business days (certified)
• Assignment: Affiliate assignment without consent if assignor remains liable; unaffiliated requires consent (not unreasonably withheld); §1031 exchange cooperation permitted
• Governing law: Property state, no conflicts-of-law principles
• Disputes: Mandatory mediation first (30–60 days); exclusive jurisdiction in property county
• Jury waiver: Mutual, knowing, voluntary (separately initialed if required)
• Standard: Integration, written amendments only, severability, counterparts, e-signatures

Exhibits

• A — Legal description
• B — Personal property schedule
• C — Form of deed (optional)
• D — Form of bill of sale (optional)
• E — Assignment and assumption of leases (income properties)
• F — Tenant estoppel certificate (income properties)

Final Checks

• Jurisdiction: Verify state-specific transfer tax rates, mandatory disclosures (lead-based paint if pre-1978 residential component), recording requirements
• Property type adjustments: Office (parking, TI) | Retail (exclusive use, percentage rent) | Industrial (environmental, zoning) | Multifamily (rent control, deposit regs)
• FIRPTA: 15% withholding for foreign sellers [VERIFY current rate under IRC §1445]
• §1031 exchange: Include cooperation clause; cooperating party bears no additional cost/liability
• Entity verification: Confirm legal names against secretary of state records
• Timeline validation: Calculate all deadlines effective date through closing; flag conflicts
• Cross-references: Verify exhibit references, defined terms, section cross-references, dollar amounts
• Mark uncertain statutory citations with [VERIFY]