Buyer Remedies in Sale and Purchase Contracts
For the past decade, sellers have enjoyed a fertile market with many buyers bidding sale prices higher and driving cap rates lower. The standard sale and purchase contract has evolved into a one-sided document containing seller-favorable provisions. While these provisions are hard for buyers to stomach, sophisticated buyers may be willing to accept them because, in most cases, they have the right to terminate the contract and receive back their earnest money during the feasibility period. However, the most inequitable provisions are found in the default and remedy sections. Buyers are most vulnerable under these provisions as they have virtually no control over the seller. Yet, there are alternatives that offer more effective protection for the buyer.