The purchase offer is an extremely important document in the negotiations leading to the acquisition of a commercial or industrial building. It is the contract by which the buyer agrees to purchase what was the subject of the offer. In return, the seller who accepts the purchase offer commits to sell under the conditions determined therein.
The purchase offer will include the identification of both parties as well as a description as detailed as possible of the property (address, cadastral designation, measurements, and land area). The purchase offer should also specify a date on which it will become null to allow the property to be put back on the real estate market if the preconditions contained in the purchase offer are not met.
The purchase offer should also specify the sale price and indicate the deposit given upon acceptance of the offer, the scheduled transaction date, the inclusions and exclusions, the preparation of a location certificate, etc.
The purchase offer should include a clause stating that the buyer will have the building inspected within a reasonable time and that their final acceptance is conditional upon satisfactory inspection results. The purchase offer must also be conditional upon this building inspection to avoid any unpleasant surprises. The inspection carried out by a professional building inspector is a step not to be neglected. The inspection report must not only describe the current condition of the premises but also provide an overview of the necessary work in the coming years. This way, you can assess the quality of the construction, evaluate the possible financial contribution in the years to come, and avoid being surprised by unforeseen expenses. It is important at this stage to choose a recognized building inspector and to carefully read the inspection report related to your property. It should be noted that another undeniable advantage of a pre-purchase inspection is that if a problem arises after the sale, the expert can be an important witness. They can generally confirm that the defect existed at the time of the sale. They will also be able to present to the court an assessment of the repair and restoration costs.
The purchase offer should also be conditional upon the buyer obtaining mortgage financing and an environmental study. Finally, the purchase offer may include a clause providing for a property assessment.
As for the seller, they must ensure that the property is free from hidden defects. They should also declare that they are not aware of and have not received any information that could reduce the value of the property (zoning changes, etc.) The seller will remain responsible for defects that they were aware of but did not disclose to the buyer. In some municipalities, the seller must be able to prove that the property complies with municipal requirements for water supply, sewer, septic system, etc.
Therefore, the purchase offer binds both parties. Failure to comply with the purchase offer can have serious legal consequences for the party refusing to respect this contract. If it is the seller who refuses to execute the purchase offer, the buyer can ask the court to compel them to sell under the conditions stipulated in the purchase offer. On the other hand, if the buyer no longer wishes to fulfill their obligation, the seller can obtain a court order condemning the buyer to pay damages for the inconvenience suffered.
Our team of notaries can draft your purchase offer for a commercial building. Ideally, we can help you draft your purchase offer before you submit it to the seller.
Our team of notaries can also draft your purchase offer for a single-family home. Ideally, we can help you draft your purchase offer before you submit it to the seller.
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