An access agreement can help a real estate transaction move forward quickly while the parties negotiate a contract. However, the access agreement should contain provisions to protect the seller from damage if the parties do not subsequently sign a contract. Scope of the inspection. Some access agreements allow the buyer to perform any authorized inspection as part of a real estate purchase agreement. In other cases, an access agreement may limit the buyer`s inspection to non-invasive activities, for example. B the verification of financial documents or the passage of the immovable property. Notice. The buyer must notify the seller before going to the property to inspect them. Non-publicity on the part of the staff. The real estate purchase contract can allow the buyer to hire locally if the buyer buys the property. However, if the buyer does not buy the property, the seller may want to prevent the buyer from lure their employees into another of the buyer`s properties. Buyers and sellers want their commercial real estate transactions to grow rapidly. A buyer can ask to start inspecting the property and “pedal the tires” while the parties negotiate a real estate purchase agreement.
The seller may worry about allowing it without a contract. To allay these fears, the buyer and seller can sign an access agreement. Although the following conditions are generally not included in an access agreement, the parties should consider including them. Feedback if no contract has been signed. The access agreement should require the buyer to return to the seller any non-public information about the property if the parties do not sign a contract. Inspection restrictions. As a general rule, the buyer can only enter the property during normal opening hours. The buyer may not be allowed to enter land leased to tenants. Or the buyer may be asked to take the seller`s representative if the buyer does. Similarly, the seller may not want the buyer to contact government authorities due to concerns about the property.
Or the seller may not allow the buyer to do invasive tests. Duration of the access agreement. The access agreement usually ends when the parties sign a contract. However, the parties should agree on the expiry date of the access agreement in the absence of a contract being signed. Prohibition of debauchery of tenants. If the buyer has other properties in the area and has access to tenants, the seller might want to prohibit the buyer from encouraging tenants to move into the buyer`s other properties. Protection of intellectual property. During the inspection, the buyer can see the seller`s policies and procedures, rental forms, and other intellectual property rights.
The seller may want to prohibit the buyer from appropriating these items for use in another property. An access agreement contains some of the same provisions that would apply in a contract for the sale of real estate. However, an access agreement limits its scope to the conditions relating to the buyer`s visit to the property. The typical conditions of an access agreement are: insurance. The seller requires the buyer and its contractors to have general liability insurance. As a general rule, insurance should include the seller as an “additional insured”, so the buyer`s insurance covers the seller when a third party is injured during the buyer`s inspection. Compensation. The buyer undertakes to exempt the seller from damage caused by the inspection of the property by the buyer. Elizabeth Whitman is a lawyer and courtier who has represented clients in real estate transactions worth more than $US 1.3 billion. Elizabeth`s law firm, Whitman Legal Solutions, LLC, is located in suburban Washington, D.C., and represents real estate owners and title sponsors across the country. Confidentiality. The seller must require the buyer to keep confidential all information provided by the seller during the inspection process….