| name | commercial-psa |
| language | en |
| description | Drafts Purchase and Sale Agreements for commercial real estate transactions (office, retail, industrial, multifamily). Triggers when the user needs a commercial PSA, purchase agreement, sale contract, or acquisition agreement. Extracts deal terms from uploaded documents and structures all major provisions. |
| tags | ["agreement","drafting","transactional"] |
Purchase and Sale Agreement — Commercial Real Estate
Drafts a litigation-ready PSA for commercial property transfers, ensuring enforceability under applicable state law.
Quick Start
- Collect prerequisites (see below). Do NOT draft if deal terms are insufficient — request missing info first.
- Extract data points from uploaded documents.
- Draft the PSA following the output structure.
- Run the final checks.
Prerequisites
- Parties — exact legal names, entity types, states of formation, addresses
- Property — legal description, address, tax parcel ID, improvements
- Deal terms — purchase price, earnest money, closing timeline, financing
- Title commitment and existing survey (if available)
- Lease schedule — rent roll, all leases/amendments (income-producing properties)
- Environmental — Phase I ESA or known conditions
- Service contracts — management, maintenance, vendor agreements
- Client role — buyer or seller; risk tolerance and priorities
Document Extraction
Before drafting, extract from uploaded materials:
| Data Point | Source |
|---|
| Party names & entity structure | Org docs, term sheet |
| Legal description & address | Deed, title commitment, survey |
| Purchase price & earnest money | Term sheet, LOI |
| Closing timeline & financing | LOI, lender correspondence |
| Lease terms & rent roll | Lease files |
| Environmental conditions | Phase I/II reports |
| Special conditions | Correspondence, LOI |
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:
| Component | Details |
|---|
| Total price | Numerical + written form |
| Allocation | Real vs. personal property (must withstand IRS scrutiny) |
| Earnest money | 1–5% typical; wire within 3–5 business days to escrow |
| Additional deposits | Amount, trigger, refundability |
| Cash at closing | Price minus deposits minus financing |
| Financing | Loan amount, type (conventional/SBA/CMBS/mezzanine) |
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]
