Fillable Printable Contract of Sale - Office, Commercial and Multi-Family Residential Premises

Contract of Sale - Office, Commercial and Multi-Family Residential Premises

CONTRACT OF SALE – OFFICE, COMMERCIAL AND MULTI-FAMILY RESIDENTIAL

PREMISES. This form was originally prepared by the Committee on Real Property Law of the

Association of the Bar of the City of New York. This form may have been altered by the user and

any such alterations may not be apparent. To view or download the original unaltered text of this

form and an introduction to this form, visit the Real Estate Forms site at the Reports/Publications/

Forms link at www.nycbar.org.

Contract of Sale – Office, Commercial and Multi-Fa mily Residential Premises

Between

___________________________________________ (“Seller”)

and

___________________________________________ (“Purchaser”)

dated _____________

Premises:

Street Address:

City or Town:

County:

State: New York

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Table of Contents

Section 1. Sale of Premises and Acceptable Title.........................................................1

Section 2. Purchase Price, Acceptable Funds, Existing Mortgages,

Purchase Money Mortgage, Escrow of Downpayment and

Foreign Persons............................................................................................2

Section 3. The Closing..................................................................................................7

Section 4. Representations and Warranties of Seller....................................................7

Section 5. “As Is” Condition, No Representations Not Expressly Set

Out in Contract, Representations and Warranties of

Purchaser....................................................................................................12

Section 6. Seller’s Obligations as to Leases ...............................................................14

Section 7. Responsibility for Violations.....................................................................16

Section 8. Destruction, Damage or Condemnation.....................................................17

Section 9. Covenants of Seller....................................................................................19

Section 10. Seller’s Closing Obligations ......................................................................19

Section 11. Purchaser’s Closing Obligations................................................................22

Section 12. Apportionments..........................................................................................23

Section 13. Objections to Title, Failure of Seller or Purchaser to Perform

and Vendee’s Lien .....................................................................................25

Section 14. Broker ........................................................................................................26

Section 15. Notices .......................................................................................................27

Section 16. Limitations on Survival of Representations, W arranties,

Covenants and other Obligations...............................................................27

Section 17. Due Diligence Period.................................................................................27

Section 18. Miscellaneous Provisions ..........................................................................29

SCHEDULES

Schedule A. DESCRIPTION OF PREMISES ............................................................ A-1

Schedule B. PERMITTED EXCEPTIONS..................................................................B-1

Schedule C. PURCHASE PRICE ................................................................................C-1

Schedule D. MISCELLANEOUS ............................................................................... D-1

Schedule E. RENT SCHEDULE .................................................................................E-1

Schedule F. FORM OF ESTOPPEL LETTER............................................................F-1

Schedule G. INSURANCE POLICIES....................................................................... G-1

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Schedule H. EMPLOYEES......................................................................................... H-1

Schedule I. SERVICE CONTRACTS.........................................................................I-1

Schedule J. CERTIFICATE OF OCCUPANCY .........................................................J-1

Schedule K. FORMS OF PURCHASE MONEY NOTE AND MORTGAGE .......... K-1

Contract of Sale -- Office, Commercial and Multi-Family Residential Premises

CONTRACT OF SALE (“Contract”) dated _______________ between

___________________________ (“Seller”) and _____________________________

(“Purchaser

”).

Seller and Purchaser hereby covenant and agree as follows:

Section 1. Sale of Premises and Acceptable Title

§1.01. Seller shall sell to Pur chaser, and Purchaser sh all purchase from Seller, at

the price and upon the term s and conditions set fort h in this contract: (a) the parcel of land

more particularly described in Schedule A attached hereto (“Land”); (b) all buildings and

improvements situated on the Land (collectively, “Building

”); (c) all right, title and interest

of Seller, if any, in and to the land lying in the bed of any street or highway in front of or

adjoining the Land to the center line thereof and to any unpaid award for any taking by

condemnation or any damage to the Land by reason of a change of grade of any street or

highway; and (d) the appurtenances and all the estate and rights of Seller in and to the Land

and Building (collectively, the “Premises”). For purposes of this contract,

“appurtenances” shall include all right, title and interest of Seller, if any, in and to (i) streets,

easements, rights-of-way and vehicle parking righ ts used in connection with the Prem ises;

(ii) any strips or gores of land between the Land and abutting or adjacent properties; (iii)

the leases, licenses and occupancy agreements for space in the Building, and all guarantees

thereof, as shown on Schedule E attached hereto and any leases entered into by Seller

between the date of this contract and the Closing (as hereinafter defined); (iv) the Service

Contracts (as hereinafter defined); (v) plans, specifications, architectural and engineering

drawings, prints, surveys, soil and substrata studies relating to the Premises in Seller’s

possession, whether or not stored, managed or contained on computer software or

hardware; (vi) all operating manuals and books, data and records regarding the Premises

and its component systems in Seller’s possession; (vii) all licenses, permits, certificates of

occupancy and other approvals issued by any state, federal or local authority relating to the

use, maintenance or operation of the Premises or the fixtures, machinery or equipment

included in this sale to the extent that they may be transferred or assigned; (viii) all

warranties or guaranties, if any, applicable to the Premises, to the extent such warranties or

guaranties are assignable; (ix) all tradenames , trademarks, servicem arks, logos, copyrights

and good will relating to or used in connection with the operation of the Premises and

(x) air rights and development rights. This sale also includes all trade fixtures and all

equipment, machinery, materials, supplies and other personal property attached or

appurtenant to the Building or located at and used in the operation or maintenance of the

Land or Building to the extent same are owned by Seller or any affiliate of Seller (the

“Personal Property”). The street address of the Premises is set forth on Schedule D

attached hereto.

§1.02. Seller shall convey and Purchaser shall accept fee simple title to the

Premises in accordance with the terms of this contract, subject only to: (a) the matters set

forth in Schedule B attached hereto (collectively, “Permitted Exceptions”); and (b) such

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other matters as the title insurer specified in Schedule D attached hereto (or if none is so

specified, then any title insurer licensed to do business by the State of New York) shall be

willing to om it as exceptions to coverage or to except with insurance against collection out

of or enforcement against the Premises.

Section 2. Purchase Price, Acceptable Funds, Existing Mortgages, Purchase

Money Mortgage, Escrow of Downpayment and Foreign Persons

§2.01. Purchaser shall pay Seller the purchase price (“Purchase Price”) set forth

in Schedule C attached hereto, subject to the terms and conditions of this contract. Seller

and Purchaser acknowledge that no portion of the Purchase Price is allocated to the

Personal Property, if any, transferred pursuant to this contract.

§2.02. Except for the Downpayment (hereinafter defined), all monies payable

under this contract, unless otherwise specified in this contract, shall be paid by (a) certified

checks of Purchaser or any person making a loan to Purchaser drawn on any bank or trust

company having a banking office in the City of New York and which is a member of the

New York Clearing House Association or (b) official bank checks drawn by any such

banking institution, except that uncertified checks of Purchaser payable to the order of

Seller up to the amount of $2,500 shall be acceptable for sums payable to Seller at the

Closing, or (c) with respect to the portion of the Purchase Price payable at the Closing, at

Seller’s election, by wire transfer of immediately available federal funds to an account

designated by Seller not less than three business days prior to the Closing.

§2.03. (a) If Schedule C provides for the acceptance of title by Purchaser subject

to one or more existing mortgages (collectively, “Existing Mortgage(s)”), the amounts

specified in Schedule C with reference thereto may be approximate and the following shall

apply:

(i) If at the Closing the aggregate principal amount of the Existing

Mortgage(s), as reduced by payments required thereunder prior to the Closing, is less than

the aggregate amount of the Existing Mortgage(s) as specified in Schedule C

, the

difference shall be added to the monies payable by Purchaser at the Closing, unless

otherwise expressly provided herein.

(ii) If any of the documents constituting the Existing Mortgage(s) or the

note(s) secured thereby prohibits or restricts the conveyance of the Premises or any part

thereof without the prior consent of the holder or holders thereof (“Mortgagee(s)”) or

confers upon the Mortgagee(s) the right to accelerate payment of the indebtedness or to

change the terms of the Existing Mortgage(s) if a conveyance is made without consent of

the Mortgagee(s), Seller shall notify such Mortgagee(s) of the proposed conveyance to

Purchaser within 10 days after execution and delivery of this contract, requesting the

consent of such Mortga gee(s) thereto. Seller and Purchaser shall furn ish the Mortgagee(s)

with such information as may reasonably be required in connection with such request and

shall otherwise cooperate with such Mortgagee(s) and with each other in an effort

expeditiously to procure such consent, but neither shall be obligated to make any payment

to obtain such consent. If such Mortgagee(s) shall fail or refuse to grant such consent in

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writing on or before the closing date specified in Schedule D or shall require as a condition

of the granting of such consent (i) that additional consideration be paid to the Mortgagee(s)

and neither Seller nor Purchaser is willing to pay such additional consideration or (ii) that

the terms of the Existing Mortgage(s) be changed and Purchaser is unwilling to accept such

change(s), then unless Seller and Purchaser mutually agree to extend such date or

otherwise modify the terms of this contract, either Purchaser or Seller may terminate this

contract by notice given to the other party within five business days after notice of such

Mortgagee’s decision. If either Purchaser or Seller terminates this contract pursuant to this

§2.03(b), such termination shall be subject to the provisions of §13.07.

§2.04. Even if Schedule C does not provide for the acceptance of title by

Purchaser subject to one or more Existing Mortgages, Seller shall, upon request of

Purchaser, use commercially reasonable efforts to cause the holder(s) of the existing

mortgage(s) encumbering the Premises to assign it (them) to Purchaser’s lender at Closing,

and to deliver to Purchaser’s lender the original mortgage(s) and the original promissory

note(s) secured thereby and Purchaser shall pay any and all costs in connection therewith.

The amount paid by Purchaser (or its lender) to the holder(s) of such existing mortgage(s)

as payment for the assignm ent of such mortgage(s) shall be deemed a payment on account

of the Purchase Price.

§2.05. (a) If Schedule C provides for payment of a portion of the Purchase Price

by execution and delivery to Seller of a note secured by a purchase money mortgage

(“Purchase Money Mortgage”), such note and Purchase Money Mortgage shall be

substantially in the forms attached hereto as Schedule K. At the Closing, Purchaser shall

pay the mortgage recording tax and recording fees therefor, the filing fees for any financing

statements delivered in connection therewith and the fees of Seller’s attorney for preparing

the note and Purchase Money Mortgage (to the extent such attorneys’ fees do not exceed

$___________).

(b) If Schedule C provides for the acceptance of title by Purchaser subject to

Existing Mortgage(s) prior in lien to the Purchase Money Mortgage, the Purchase Money

Mortgage shall provide that it is subject and subordinate to the lien(s) of the Existing

Mortgage(s) and shall be subject and subordinate to any extensions, modifications,

renewals, consolidations, substitutions or replacements thereof (collectively,

“Refinancing” or “Refinanced Mortgage”), provided that (i) the rate of interest payable

under a Refinanced Mortgage shall not be greater than that specified in Schedule D as the

Maximum Interest Rate or, if no Maximum In terest Rate is specified in Schedule D

, shall

not be greater than the rate of interest that was payable on the refinanced indebtedness

immediately prior to such Refinancing, and (ii) if the principal amount of the Refinanced

Mortgage plus the principal amount of other Existing Mortgage(s), if any, remaining after

placement of a Refinanced Mortgage exceeds the amount of principal owing and unpaid on

all mortgages on the Premises superior to the Purchase Money Mortgage immediately prior

to the Refinancing, an amount equal to the excess shall be paid at the closing of the

Refinancing to the holder of the Purchase Money Mortgage, w ithout prepayment premium

or other charge, in reduction of principal payments due thereunder in inverse order of

maturity. The Purchase Money Mortgage shall further provide that the holder thereof shall,

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on demand and without charge therefor, execute, acknowledge and deliver any agreement

or agreements reasonably required by the mortgagor to confirm such subordination.

provisions:

(i) “The mortgagor or any owner of the mortgaged prem ises shall have

the right to prepay the entire unpaid indebtedness secured by this mortgage, together with

accrued interest, but without penalty, at any time on or after [insert the day following the

last day of the fiscal year of the mortgagee in which the Closing occurs or, if a Prepayment

Date is specified in Schedule D

, the specified Prepayment Date], on not less than 10 days’

written notice to the holder hereof.”

(ii) “Notwithstanding anything to the contrary contained herein, the

obligation of the mortgagor for the payment of the indebtedness and for the performance of

the terms, covenants and conditions contained herein and in the note secured hereby is

limited solely to recourse against the property secured by this mortgage, and in no event

shall the mortgagor or any principal of the mortgagor, disclosed or undisclosed, be

personally liable for any breach of or default under the note or this mortgage or for any

deficiency resulting from or through any proceedings to foreclose this mortgage, nor shall

any deficiency judgment, money judgment or other personal judgment be sought or entered

against the mortgagor or any principal of the mortgagor, disclosed or undisclosed, but the

foregoing shall not adversely affect the lien of this mortgage or the mortgagee’s right of

foreclosure. Notwithstanding the provisions of this subparagraph (ii), mortgagor shall be

personally liable to mortgagee for losses due to:

(A) fraud or intentional or willful misrepresentation;

(B) mortgagor’s misapplication or misappropriation of rents or other

income received by mortgagor after the occurrence of an event of default.

deposits or rents collected more than (1) month in advance;

(D) the misapplication or the m isappropriation of insurance proceeds or

condemnation awards;

(E) mortgagor’s failure to pay real estate taxes, water charges or sewer

rents (except to the extent that sum s sufficient to pay such am ounts have been deposited in

escrow with mortgagee pursuant to the terms hereof) but only to the extent that the

mortgaged premises generates sufficient income to pay the same when due;

(F) any act of intentional waste or arson by mortgagor, or any officer,

director, member or general partner of mortgagor;

(G) subject to the rights of the holder of any superior mortgage,

mortgagor’s failure following any event of default to deliver to mortgagee on demand all

rents and other income and books and records relating to the mortgaged premises;

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(H) damage to the mortgaged premises arising from the intentional

misconduct or gross negligence of mortgagor, or any officer, director, member or general

partner of mortgagor.”

(iii) “In addition to performing its obligations under Section 274-a of the

Real Property Law, the mortgagee, if other than one of the institutions listed in Section

274-a, agrees that, within 10 days after written request by the mortgagor, but not more than

twice during any period of 12 consecutive months, it will execute, acknowledge and

deliver without charge a certificate of reduction in recordable form (a) certifying as to (1)

the then unpaid principal balance of the indebtedness secured hereby, (2) the m aturity date

thereof, (3) the rate of interest, (4) the last date to which interest has been paid and (5) the

amount of any escrow deposits then held by the mortgagee, and (b) stating, to the actual

knowledge of the mortgagee, whether there are any alleged defaults hereunder and, if so,

specifying the nature thereof.”

(iv) The additional provisions, if any, specified in a rider hereto.

§2.06. (a) All sums paid on account of the Purchase Price prior to the Closing

(collectively, “Downpayment”) shall be paid by good check or checks drawn to the order

of and delivered to Seller’s attorney or another escrow agent designated in writing by the

parties (“Escrowee”). The Escrowee shall hold the proceeds thereof in escrow in a special

bank account at _____________ located at _____________ (or as otherwise agreed in

writing by Seller, Purchaser and Escrowee) until the Closing or sooner termination of this

contract and shall pay over or apply such proceeds in accordance with the terms of this

section. Escrowee shall hold such proceeds in an interest-bearing account, and such

interest shall be paid to the same party entitled to the Downpayment, and the party

receiving such interest shall pay any income taxes thereon. Escrowee shall not be

responsible for any interest on the Downpayment except as is actually earned, or for the

loss of any interest resulting from the withdrawal of the Downpayment prior to the date

interest is posted thereon or for any loss caused by the failure, suspension, bankruptcy or

dissolution of the institution in which the Downpayment is deposited. The tax

identificatio n num bers of the parties are se t forth in Schedule D. Each of the parties, upon

Escrowee’s request, shall promptly furnish to Escrowee a completed and executed Form

W-9, together with such other information as Escrowee shall reasonably require. At the

Closing, such proceeds and the interest thereon, if any, shall be paid by Escrowee to Seller.

If for any reason the Closing does no t occur and either party m akes a written demand upon

Escrowee for payment of such amount, Escrowee shall give written notice to the other

party of such demand. If Escrowee does not receive a written objection from the other

party to the proposed payment within 10 business days after the giving of such notice,

Escrowee is hereby authorized to make such payment. If Escrowee does receive such

written objection within such 10 day period or if for any other reason Escrowee in good

faith shall elect not to make such payment, Escrowee shall continue to hold such amount

until otherwise directed by written instructions from the parties to this contract or a final

and non-appealable judgment of a court. However, Escrowee shall have the right at any

time to deposit the escrowed proceeds and interest thereon, if any, with the clerk of the

Supreme Court of the county in which the Premises is located. Escrowee shall give written

notice of such deposit to Seller and Purchaser. Upon such deposit Escrowee shall be

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relieved and discharged of all further obligations and responsibilities hereunder. If the

Downpayment is deposited in a m oney market account, dividends thereon shall be treated,

for purposes of this Section, as interest.

(b) The parties acknowledge that Escrowee is acting solely as a stakeholder at

their request and for their convenience, that the duties of Escrowee hereunder are purely

ministerial in nature and shall be expressly limited to the safekeeping and disposition of the

Downpayment in accordance with the provisions of this contract, that Escrowee shall not

be deemed to be the agent of either of the parties, and that Escrowee shall not be liabl e to

either of the parties for any act or omission on its part unless taken or suffered in bad faith,

in willful disregard of this contract or involving gross negligence. Seller and Purchaser

shall jointly and severally indemnify and hold Escrowee harmless from and against all

costs, claims and expenses, including reasonable attorneys’ fees, incurred in connection

with the performance of Escrowee’s duties hereunder, except with respect to actions or

omissions taken or suffered by Escrowee in bad faith, in willful disregard of this contract or

involving gross negligence on the part of Escrowee.

the place indicated on the signatu re page of this contract.

(d) If Escrowee is Seller’s attorney, Escrowee or any member of its firm shall

be permitted to act as counsel for Seller in any dispute as to the disbursement of the

Downpayment or any other dispute between the parties whether or not Escrowee is in

possession of the Downpayment and continues to act as Escrow ee.

(e) Escrowee may act or refrain from acting in respect of any m atter referred to

in this §2.06 in full reliance upon and with the advice of counsel which m ay be selected by

it (including any member of its firm) and shall be fully protected in so acting or refraining

from action upon the advice of such counsel.

§2.07. If Seller is a “foreign person”, as defined in Internal Revenue Code

Section 1445 and regulations issued thereunder (collectively, the “Code Withholding

Section”), or if Seller fails to deliver the certification of non-foreign status required under

§10.01(k), or if Purchaser is not entitled under the Code Withholding Section to rely on

such certification, Purchaser shall deduct and withhold from the Purchase Price a sum

equal to ten percent (10%) thereof and shall at Closing remit the withheld amount with

Forms 8288 and 8288A (or any successor forms) to the Internal Revenue Service; and if

the cash balance of the Purchase Price payable to Seller at the Closing after deduction of

net adjustments, apportionments and credits (if any) to be made or allowed in favor of

Seller at the Closing as herein provided is less than ten percent (10%) of the Purchase Price,

Purchaser shall have the right to terminate this contract. If Purchaser so terminates this

contract, such termination shall be subject to the provisions of §13.07. The right of

termination provided for in this §2.07 shall be in addition to and not in limitation of any

other rights or remedies available to Purchaser under applicable law.

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Section 3. The Closing

§3.01. Except as otherwise provided in this c ontract, the closing of title pursuant

to this contract (“Closing”) shall take place on the scheduled date and at the time of closing

specified in Schedule D (the actual date of the Closing being herein referred to as “Closing

Date”) at the place specified in Schedule D.

Section 4. Representations and Warranties of Seller

Seller represents and warrants to Purchaser as follow:

§4.01. Seller is the sole owner o f the Prem is es and has not granted any option to

purchase the Premises or any right of first refusal or right of first offer to purchase the

Premises.

§4.02. If the Premises are encumbered by an Existing Mortgage(s), no written

notice has been received from the Mortgagee(s) asserting that a default or breach exists

thereunder which remains uncured and no such notice shall have been received and remain

uncured on the Closing Date. If Schedule C provides for the acceptance of title by

Purchaser subject to one or more Existing Mortgages, Seller represents and warrants that

Seller has delivered to Pu rchaser true and complete copies of the Existing Mortgage(s) and

the promissory notes secured thereby, and that same have not been modified or amended

except as shown in such documents.

§4.03. The information concerning written leases, written licenses and written

occupancy agreements (which together with all amendments and modifications thereo f are

collectively referred to as “Leases

”) and any tenancies or occupancies in the Premises not

arising out of the Leases (collectively, “Tenancies”; and each, individually, a “Tenancy”)

set forth in Schedule E attached hereto (“Rent Schedule”) is accurate as of the date set forth

therein or, if no date is set forth therein, as of the date hereof, and there are no Leases or

Tenancies of any space in the Prem ises other than those set forth therein and any sublea ses

or subtenancies. Except as otherwise set forth in the Rent Schedule or elsewhere in this

contract:

(a) all of the Leases are in full force and effect;

(b) none of the Leases has been modified, amended or extended;

granted to tenants, occupants or licensees;

(d) no tenant, occupant or licensee has an option to purchase the Premises or a

right of first ref usal or first offer with respect to a sale of the Premises;

(e) the rents and fees set forth are being collected on a current basis and there

are no arrearages in excess of one month;

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(f) no tenant, occupant or licensee is entitled to rental concessions or

abatements for any period subsequent to the scheduled date of Closing, other than an

abatement by reason of a casualty disclosed to Purchaser that occurred after the date of

execution and delivery of this contract;

(g) Seller has not sent written notice to any tenant, occupant or licensee

claiming that such tenant is in default, which default remains uncured;

(h) no action or proceeding instituted against Seller by any tenant, occupant or

licensee of all or part of the Premises is presently pending in any court or other tribunal,

except with respect to claims involving personal injury or property damage which are

covered by insurance;

(i) there are no security deposits other than those set forth in the Rent

Schedule;

(j) the Rent Schedule accurately sets out all security deposits held by Seller

with respect to the Leases and Tenancies;

(k) true and complete copies of the Leases have been delivered to Purchaser or

its counsel and initialed by representatives of Purchaser and Seller;

(l) the tenants, occupants and licensees under the Leases and Tenancies are in

actual possession of the space demised;

(m) to Seller’s actual knowledge, Seller has performed all of the landlord’s

obligations under the Leases and Tenancies;

(n) Seller has received no notice(s) of any default of the landlord under the

Leases that remains pending;

(o) to Seller’s actual knowledge, no action or proceeding, voluntary or

involuntary, is pending against any tenant, licensee or occupant under any bankruptcy or

insolvency act; and

(p) no leasing commissions are due or owing with respect to any of the Leases

or Tenancies and all leasing commissions have been paid in full with respect to all of the

Leases and Tenancies, except to the extent any brokerage agreements may provide for

payment of a commission in case of any renewal, extension or expansion of space.

If any Lease s which h av e been exhib ited to and initialed by Purchaser or its representa tive

contain provisions that are inconsistent with the foregoing representations and warranties,

such representations and warranties shall be deemed modified to the extent necessary to

eliminate such inconsistency and to conform such representations and warranties to the

provisions of the Leases.

§4.04. If the Premises or any part thereof are subject to the New York City Rent

Stabilization Law, Seller is and on the Closing Date will be a member in good standing of