Contingencies in a home purchase contract are conditions that need to be met before the final sales closing can take place. They operate much like “escape hatches”, allowing the buyer to walk away from the deal if the contingencies aren’t met.
In most real estate contracts, there are usually several weeks in between the signing of the contract and the actual closing of the sale. During this period, also known as escrow, most if not all of these contingencies are expected to be fulfilled. If all contingencies are not met by the final closing, either party may have a right to cancel the purchase contract.
Some examples of contingencies that commonly occur in a real estate contract involve:
There may be several other different kinds of contingencies in a real estate contract. These will depend on the needs and abilities of both the buyer and seller in the deal.
Most legal disputes related to contingencies arise when either negotiating the terms of contingencies in the purchase agreement or if one party fails to meet one of the contingencies after the purchase agreement is signed. If a dispute arises regarding the terms or conditions of the purchase agreement, the parties are generally bound by whatever dispute resolution process is indicated in the purchase agreement. This may require the parties to resolve the matter outside of court.
Buying property is generally a significant financial investment. Contingencies in a real estate contract are important for securing the interests for both buyers and sellers. Before signing a purchase agreement, it is important to consult a skilled real estate attorney to safeguard your investment. Your real estate lawyer can identify important conditions to include in the purchase agreement and help ensure that the conditions are properly fulfilled. In addition, if a dispute arises, a real estate attorney can maintain a record of the purchasing process and represent your interests in court.
Last Modified: 07-12-2017 02:33 PM PDTLaw Library Disclaimer
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