Common use of Practice Tip Clause in Contracts

Practice Tip. If the Buyer does not want to perform any inspections that are not named above, it is recommended that the Buyer initial “Waived” to make it clear that the lines were intentionally left blank. Practice Tip: There is only one line to elect and one line to waive this contingency. If more than one item is listed under other and the parties would like to remove one, the item to be removed should be crossed out and initialed. It might be clearer to simply address this change in an addendum to the Agreement. Existing Conditions There is a space to list any items that are to be excluded from any of these “blanket” inspection contingencies. The Sellers may want to consider excluding any items/systems that have already been disclosed as faulty. For example, if the Seller has disclosed that a hot water heater needs to be replaced, that defect should be considered by the Seller in setting an asking price and by the Buyer when making an offer. Including it in the list does not mean the Buyer cannot inspect for it, but it does mean that the Seller does not have to negotiate over it in a report/as part of a Written Corrective Proposal. The Seller should consider listing all defects so the Buyer does not attempt to negotiate the offer based on an inspection report detailing a defect that was already disclosed. Subparagraph (D): Notices Regarding Property & Environmental Inspections Clients should be directed to these Notices when they are deciding whether to elect or waive any certain inspection. These Notices provide a small description of some less-common issues that may arise and direct them to agencies which can give them more information. Paragraph 13: INSPECTION CONTINGENCY‌ Subparagraph (A): Contingency Period The Contingency Period that applies to all inspections elected in Paragraph 12 is established in Paragraph 13(A). The default Contingency Period is 10 days, though the parties can agree to a different length if desired.

Practice Tip. Where a Seller has the right to terminate under this provision but does not intend to do so, the parties may want to consider adding an addendum stating that the Seller waives the right to terminate under this provision. Practice Tip: If the Seller terminates the Agreement under subparagraph (C) 2 or 3, OR if the Buyer is unable to obtain financing in good faith (i.e., the Buyer has done everything required under the Agreement and hasn’t misrepresented their finances to the Seller or the lender), the Buyer will have all deposit monies returned. The Buyer will not be entitled to the refund of fees paid in advance, and may have to pay cancellation fees. Note: If financing is not received by the Settlement Date, the Agreement is automatically terminated. The settlement date cannot be extended except by written agreement of the parties. Remember that the Buyer is under an obligation to submit a valid mortgage application and has a general duty to cooperate in the processing of that application. If an inability to obtain financing is due to action or inaction by the Buyer that violates these obligations, the Buyer may be in default. Subparagraph (F) This paragraph explains the rights and obligations of the Buyer and the Seller when a mortgage lender or a property and casualty insurer requires repairs to the Property as a condition of getting financing: ▪ The Seller has the option of making the required repairs. If the repairs are made, the Buyer must proceed with the purchase of the Property under the terms of the Agreement. ▪ If the Seller chooses not to make the repairs, the Buyer has the option to make the required repairs at the Buyer’s expense or to terminate the Agreement. If the Buyer is willing to make the repairs, the Seller may not “unreasonably withhold” permission for the Buyer to do the repairs, nor access the Property to be able to perform the repairs. If the Buyer terminates under this provision, the Agreement is void and all deposit monies are returned to the Buyer. Note: Because this provision is included in the Mortgage Contingency paragraph, it is only applicable if the Buyer elects the contingency. Where the Buyer is not subject to the terms of the contingency, the Buyer does not want to perform any inspections that are not named above, it is recommended that have the Buyer initial “Waived” to make it clear that the lines were intentionally left blank. Practice Tip: There is only one line to elect and one line to waive this contingency. If more than one item is listed under other and the parties would like to remove one, the item to be removed should be crossed out and initialed. It might be clearer to simply address this change in an addendum to the Agreement. Existing Conditions There is a space to list any items that are to be excluded from any of these “blanket” inspection contingencies. The Sellers may want to consider excluding any items/systems that have already been disclosed as faulty. For example, if the Seller has disclosed that a hot water heater needs to be replaced, that defect should be considered by the Seller in setting an asking price and by the Buyer when making an offer. Including it in the list does not mean the Buyer cannot inspect for it, but it does mean that the Seller does not have right to negotiate over it in a report/as part of a Written Corrective Proposal. The Seller should consider listing all defects so repairs that might be required by the Buyer does not attempt to negotiate the offer based on lender either directly or through an inspection report detailing a defect that was already disclosed. Subparagraph (D): Notices Regarding Property & Environmental Inspections Clients should be directed to these Notices when they are deciding whether to elect or waive any certain inspection. These Notices provide a small description of some less-common issues that may arise and direct them to agencies which can give them more information. Paragraph 13: INSPECTION CONTINGENCY‌ Subparagraph (A): Contingency Period The Contingency Period that applies to all inspections elected in Paragraph 12 is established in Paragraph 13(A). The default Contingency Period is 10 days, though the parties can agree to a different length if desiredinsurer.

Practice Tip. If the Buyer does not want to perform any inspections that are not named aboveidentify a mortgage lender in subparagraph (A), it is recommended that the Buyer initial can apply to any “Waivedreputable” to make it clear that lender of the lines were intentionally left blankBuyer’s choice. Practice Tip: There Even if a lender is only one line to elect and one line to waive this contingency. If more than one item is listed under other and the parties would like to remove oneidentified, the item Buyer can still make additional applications, as long as an application to the original lender is also made. The Agreement does not prohibit the Buyer from accepting a loan from another lender, but if that financing agreement falls through the Buyer may be removed should be crossed out and initialedin default. It might be clearer Best practice is to simply address this change in submit an addendum to the Agreement. Existing Conditions There is a space to list any items that are to be excluded from any of these “blanket” inspection contingencies. The Sellers may want to consider excluding any items/systems that have already been disclosed as faulty. For example, Seller if the Seller has disclosed that Buyer decides to apply to a hot water heater needs to be replaceddifferent lender, that defect so there is no issue regarding permission. If the additional lender is reputable, most Sellers should be considered by the Seller in setting an asking price and by the Buyer when making an offer. Including it in the list does not mean the Buyer cannot inspect for it, but it does mean that the Seller does not have a problem agreeing to negotiate over it in a report/as part that sort of a Written Corrective Proposal. The Seller should consider listing all defects so the Buyer does not attempt to negotiate the offer based on an inspection report detailing a defect that was already disclosedchange. Subparagraph (D): Notices Regarding Property & Environmental Inspections Clients ) The Buyer is obligated to not only make the application for financing, but to provide all necessary information and cooperate with the lender in the process. Failure to cooperate in good faith, or failure to provide truthful information, may be considered to be a default of the Agreement. Failure to lock in an interest rate 15 days before the Settlement Date, as required in paragraph 8(B), or failure to pay the lender for a credit report or appraisal when asked would make the Buyer in default of this Agreement. Subparagraph (E) Use a specific date for the Mortgage Commitment Date. Because time is of the essence, be realistic in establishing this date by considering all the elements in the approval process. A copy of the written commitment must be received by the Seller by the Mortgage Commitment Date or the Seller has the option to terminate the Agreement in writing; notifying the Seller via e-mail or phone isn’t sufficient. If a copy of the written commitment is not delivered by the Mortgage Commitment Date, the Buyer is still obligated to seek financing, but the Seller has the right to terminate the Agreement at any time until a written commitment is received. The Buyer must promptly deliver a copy of the mortgage commitment to the Seller or the Broker for the Seller. As noted above, this contingency is not satisfied until a copy of the written commitment is delivered to the Seller, so the Buyers should be directed sure to these Notices when they are deciding whether to elect or waive any certain inspection. These Notices provide a small description of some less-common issues that may arise and direct them to agencies which can give them more information. Paragraph 13: INSPECTION CONTINGENCY‌ Subparagraph (A): Contingency Period The Contingency Period that applies to all inspections elected in Paragraph 12 is established in Paragraph 13(A). The default Contingency Period is 10 days, though the parties can agree to a different length if desiredmake delivery as early as possible.

Practice Tip. If the Buyer does parties wish to use the default time periods in the locations where blanks are provided it is not want absolutely necessary to perform any inspections that are not named abovefill in the blank, but best practice would be to do so anyway. Even with a default provided, it is recommended inadvisable to proceed with an Agreement that has any unfilled blank lines, especially considering that a misunderstanding over one of these time periods could cause major problems in the Buyer initial “Waived” to make it clear that the lines were intentionally left blanktransaction. Practice TipNote: There is only one line to elect and one line to waive this contingency. If more than one item is listed under other and are some provisions in the parties would like to remove one, the item to be removed should be crossed out and initialed. It might be clearer to simply address this change in an addendum to the Agreement. Existing Conditions There is a space to list any items Agreement that are to required by law (e.g., Department of Transportation, Zoning, Coal Notice) that should not be excluded from any modified. Paragraph 5: FIXTURES AND PERSONAL PROPERTY‌ Subparagraph (A): Fixtures “Fixtures” are pieces of these “blanket” inspection contingencies. The Sellers may want to consider excluding any items/systems personal property that have already been disclosed as faultyattached to land or a building in such a way that makes removal impractical. For example, if the Seller a gas fireplace is an item of personal property but once it has disclosed that been installed as a hot water heater needs focal point of a bar, it is more likely to be replacedregarded as a fixture. While disputes over these items are not new, that defect should advancing technology makes certain items of personal property inherently more mobile and less inclined to be considered by attached to the Seller property in setting an asking price and by the Buyer when making an offer. Including it in the list any sort of permanent way; however, this does not mean the Buyer cannot inspect for it, but it does necessarily mean that the Seller does item is not have a fixture. The point of this language is to negotiate remind the parties that they should be very specific when negotiating which items of personal property will be included with the sale and which will not. It is better to spend some time clarifying what you might think is obvious at the outset than fighting over it the morning of settlement. Subparagraphs (B) and (D): Included/Excluded Subparagraph (B) specifies what existing items are included in a report/as part the sale of a Written Corrective Proposalthe Property. The Seller should consider listing all defects so Additional items included in the sale can be listed on the lines provided. Cross out any pre-printed items that are not included and have both the Buyer does not attempt to negotiate and the offer based on an inspection report detailing a defect that was already disclosed. Seller initial and date the deletions, and/or specify any excluded fixtures and items in Subparagraph (D): Notices Regarding Property & Environmental Inspections Clients should be directed to these Notices when they are deciding whether to elect or waive any certain inspection. These Notices provide a small description of some less-common issues that may arise and direct them to agencies which can give them more information. Paragraph 13: INSPECTION CONTINGENCY‌ Subparagraph (A): Contingency Period The Contingency Period that applies to all inspections elected in Paragraph 12 is established in Paragraph 13(A). The default Contingency Period is 10 daysIf there are other items not listed in this paragraph, though use the parties can agree blanks to a different length if desiredclearly state which items are to be included or excluded (shelving, etc.).

Practice Tip. Having the Seller “provide access” to the on-lot sewage system may mean more than simply leaving the gate open and pointing an inspector towards the system. Other measures may also be necessary to “provide access,” (for example, clearing brush or digging to uncover elements of the system that may be underground). The Seller also agrees to return the Property to its prior condition. If the Buyer does not want Seller is aware that any additional expenses may be necessary to perform any inspections that are not named aboveprovide access to the on-lot sewage system and/or to restore the Property after testing, it is recommended that these expenses should be calculated into the Buyer initial “Waived” to make it clear that the lines were intentionally left blankprocess or negotiated separately. Practice Tip: There is only one line Be sure to elect and one line to waive this contingency. If more than one item is listed under other and check with the parties would like to remove one, sewage inspector about all the item to be removed should be crossed out and initialed. It might be clearer to simply address this change details of the inspection well in an addendum to the Agreement. Existing Conditions There is a space to list any items that are to be excluded from any of these “blanket” inspection contingencies. The Sellers may want to consider excluding any items/systems that have already been disclosed as faultyadvance. For example, depending on the system and the tests being done, the inspector may provide specific instructions regarding whether to empty the tank prior to testing. Practice Tip: This paragraph (and paragraph 12(B)) only applies if the Seller has disclosed elects to have a sewage inspection and the on-site system is discovered to have defects that a hot water heater do not require expansion or replacement of the existing system. If the report indicates that the system needs to be expanded or replaced, the Inspection Contingency will be carried out according to the terms of paragraph 12(C), which states that defect should be considered Seller may obtain a detailed corrective proposal (including who is responsible for any repairs) and submit that proposal to the Buyer. The Buyer will then elect one of three options: 1) accept the Property and the terms of the corrective proposal; 2) accept the Property and, if required by the mortgage lender or government authority, make the repairs at the Buyer’s expense and with the Seller’s permission; or 3) terminate the Agreement. If the Seller in setting an asking price denies permission to perform repairs, the Buyer also may terminate the Agreement. Note: Unlike every other inspection contingency, situations that require the expansion or replacement of the system put the responsibility to obtain the corrective proposal lies with the Seller, not the Buyer. This is due primarily to the extensive time and expense that may be necessary to perform the required testing and to perform the necessary work. Remember that if no corrective proposal is obtained and delivered by the Buyer when making an offer. Including it in end of the list does not mean stated time period, the Buyer cannot inspect for it, but it does mean that has the Seller does not have option to negotiate over it in a report/as part of a Written Corrective Proposal. The Seller should consider listing all defects so choose among the Buyer does not attempt to negotiate the offer based on an inspection report detailing a defect that was already disclosed. Subparagraph (D): Notices Regarding Property & Environmental Inspections Clients should be directed to these Notices when they are deciding whether to elect or waive any certain inspection. These Notices provide a small description of some less-common issues that may arise and direct them to agencies which can give them more information. Paragraph 13: INSPECTION CONTINGENCY‌ Subparagraph (A): Contingency Period The Contingency Period that applies to all inspections elected in Paragraph 12 is established in Paragraph 13(A). The default Contingency Period is 10 days, though the parties can agree to a different length if desiredthree choices above.

Practice Tip. If you are unsure about information regarding the other agent in the transaction -- especially whether they are working as a designated agent -- do not fill in that information. Rather, contact the Broker or Licensee to learn of their status or ask the other Broker or Licensee to fill in the information when they have the Agreement. Dual and Designated Agent Flow Chart - Buyer does not want YES NO YES NO YES NO YES NO Agreement for the Sale of Commercial Real Estate Guidelines for Preparation and Use 7/22 You are a Buyer Agent You are a Dual Agent You are a Buyer Agent with Designated Agency Do you represent both Buyer and Seller? Are you a Designated Agent? Are you a Designated Agent? Is this an in-house transaction? Answer the questions in the flow charts on the next page to perform any inspections that determine which box to check on the Agreement. Dual and Designated Agent Flow Chart - Seller YES NO YES NO YES NO YES NO You are not named abovea Seller Agent You are a Dual Agent You are a Seller Agent with Designated Agency Do you represent both Buyer and Seller? Are you a Designated Agent? Are you a Designated Agent? Is this an in-house transaction? Paragraph 1: DATE To establish the date of the offer, it is recommended insert the date that the Buyer initial Agreement is signed by the first party (usually the Buyer) in the “Waiveddated” to make it clear that blank. Do not pre-date or post-date the lines were intentionally left blankAgreement. Practice Tip: There This identification date on the Agreement should not change as the form is only one line being passed between the parties in negotiation. The purpose of this date is to elect and one line to waive this contingencyidentify which “version” of the original contract is being negotiated. If more than one item is listed under other and the parties should write a new Agreement for the transaction it would like be acceptable to remove one, start that version of the item to be removed should be crossed out and initialed. It might be clearer to simply address this change in an addendum to the Agreement. Existing Conditions There is Agreement with a space to list any items that are to be excluded from any of these “blanket” inspection contingencies. The Sellers may want to consider excluding any items/systems that have already been disclosed as faulty. For example, if the Seller has disclosed that a hot water heater needs to be replaced, that defect should be considered by the Seller in setting an asking price and by the Buyer when making an offer. Including it in the list does not mean the Buyer cannot inspect for it, but it does mean that the Seller does not have to negotiate over it in a report/as part of a Written Corrective Proposal. The Seller should consider listing all defects so the Buyer does not attempt to negotiate the offer based on an inspection report detailing a defect that was already disclosed. Subparagraph (D): Notices Regarding Property & Environmental Inspections Clients should be directed to these Notices when they are deciding whether to elect or waive any certain inspection. These Notices provide a small description of some less-common issues that may arise and direct them to agencies which can give them more informationnew date. Paragraph 132: INSPECTION CONTINGENCY‌ PURCHASE PRICE AND DEPOSITS‌ Subparagraph (A): Contingency Period The Contingency Period that applies Purchase Price Write in the Purchase Price by using numbers on the first line and write it out on the second and third lines. Do not use “00/100” or “No/100” as when writing a check. Example: Purchase Price $ 453,000 (Four Hundred and Fifty-Three Thousand U.S. Dollars), to all inspections elected in Paragraph 12 is established in Paragraph 13(A). The default Contingency Period is 10 daysbe paid by Xxxxx as follows: Practice Tip: When filling out the Agreement to submit the initial offer, though write the parties can agree purchase price to the far left of the line to permit a different length if desiredSeller to submit a counter-offer by crossing out the original amount and inserting a new amount on the same line.

Practice Tip. If the Buyer does not want to perform any inspections that are not named above, it is recommended that the Buyer initial “Waived” to make it clear that the lines were intentionally left blank. Practice Tip: There is only one line to elect and one line to waive this contingency. If more than one item is listed under other and the parties would like to remove one, the item to be removed should be crossed out and initialed. It might be clearer to simply address this change in an addendum to the Agreement. Existing Conditions There is a space to list any items that are to be excluded from any of these “blanket” inspection contingencies. The Sellers may want to consider excluding any items/systems that have already been disclosed as faulty. For example, if the Seller has disclosed that a hot water heater needs to be replacedan environmental issue, that defect should be considered by the Seller in setting an asking price and by the Buyer when making an offer. Including it in the list does not mean the Buyer cannot inspect for it, but it does mean that the Seller does not have to negotiate over it in a report/as part of a Written Corrective Proposal. The Seller should consider listing all defects so the Buyer does not attempt to negotiate the offer based on an inspection report detailing a defect that was already disclosed. Subparagraph (D): Notices Regarding Property & Environmental Inspections Clients should be directed to these Notices when they are deciding whether to elect or waive any certain inspection. These Notices provide a small description of some less-common issues that may arise and direct them to agencies which can give them more information. Paragraph 13: INSPECTION CONTINGENCY‌ Subparagraph (A): Contingency Period The Contingency Period that applies to all inspections elected in Paragraph 12 is established in Paragraph 13(A). The default Contingency Period is 10 days, though the parties can agree to a different length if desired.