VIEWS: 302 PAGES: 7 CATEGORY: Buying and Selling Commercial Real Estate POSTED ON: 3/10/2012
This is an agreement between a seller and buyer of commercial property whereby the buyer agrees to deposit earnest money to the seller to show their willingness to purchase commercial property. Earnest money is defined as partial payment of the contract to demonstrate that the buyer is serious and willing to demonstrate good faith about wanting to purchase the commercial property. This document is ideal for entities or other individuals who want to use earnest money as security for the purchase of commercial property.
This is an agreement between a seller and buyer of commercial property whereby the buyer agrees to deposit earnest money to the seller to show their willingness to purchase commercial property. Earnest money is defined as partial payment of the contract to demonstrate that the buyer is serious and willing to demonstrate good faith about wanting to purchase the commercial property. This document is ideal for entities or other individuals who want to use earnest money as security for the purchase of commercial property. COMMERCIAL EARNEST MONEY AGREEMENT This Agreement made on this ____ day of ____________________, 20______ [Instruction: Insert date.] between Seller and Buyer, as such terms are defined herein (hereinafter the “Agreement”). BETWEEN: _______________________________________ [Instruction: Insert Seller’s name and address.] (hereinafter the “Seller”), AND: _______________________________________ [Instruction: Insert Buyer’s name and address.] (hereinafter the “Buyer”), WHEREAS, Seller and Buyer have entered into and executed that certain contract dated as of the ____ day of ____________________, 20______ [Instruction: Insert contract date.], which shall hereinafter be deemed incorporated by reference (hereinafter the "Contract"), whereby Seller has agreed to sell and Buyer has agreed to buy the certain commercial real property described in the attached Exhibit A, which shall be deemed a part hereof and incorporated by reference upon the terms and conditions set forth in the Contract, including but not limited to, any agreements regarding rental income, security deposits or otherwise, as the case may be [Comment: User should set forth a description of the property in a separate document and include it as an exhibit to this Agreement.]; and WHEREAS, the Contract states that a total sum of ___________________________ Dollars ($_______________) [Instruction: Insert amount of contract deposit.] has been or will be deposited with the Seller [Comment: Revise as necessary, if any other party other than Seller will hold the money.], pending the closing of the purchase and sale pursuant to the terms of the Contract. THEREFORE, in consideration of the premises and the mutual covenants contained herein, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows. I. EARNEST MONEY Within ___ [Instruction: Insert amount of days.] days of the date of this Agreement, and as set forth in the Contract, Buyer will deposit with Seller the total sum of __________________________ Dollars ($_______________) [Instruction: Insert amount to be deposited.] (hereinafter the “Earnest Money”) as Earnest Money and a partial payment of the consideration under the Contract. Any additional earnest moneys or other deposits to be made as set forth in the Contract shall be made as set forth therein. Any such deposits shall be held as set forth herein, as if deposited as Earnest Money. Earnest Money shall not be deemed to include any rental income, security deposits or other income from the commercial real property in the Contract. © Copyright 2013 Docstoc Inc. 2 Seller (“Escrowee”) shall hold the Earnest Money in escrow in a segregated bank account until Closing or sooner termination of this Agreement and shall pay over or apply the Earnest Money in accordance with the terms of this paragraph. Seller shall hold the Earnest Money in a(n) non/interest-bearing [Instruction: Delete inapplicable.] account for the benefit of the parties. If interest is held for the benefit of the parties, it shall be paid to the party entitled to the Earnest Money and the party receiving the interest shall pay any income taxes thereon. If interest is not held for the benefit of the parties, the Earnest Money shall be placed in an account as otherwise permitted or required by law. At Closing, the Earnest Money shall be paid to Seller. Seller acknowledges receipt of the Earnest Money by check subject to collection and Seller's agreement to the provisions of this paragraph by signing in the place indicated on the signature page of this contract. [Comment: If Earnest Money is to be held by an attorney or other party, other than Seller, additional language may be required to preserve the additional rights of such party.] II. CLOSING If and when the purchase agreed upon in the Contract is consummated, Seller shall retain the Earnest Money. Buyer shall be given credit towards the total purchase price as agreed upon in the Contract for the sum of the Earnest Money retained by Seller. III. FAILURE TO CLOSE If the Contract is rescinded or terminated for any reason other than breach by Buyer, the Earnest Money, in addition to all income earned during the escrow period will be returned to Buyer. [Comment: Whether to refund the Earnest Money, here, is up to the discretion of the user. User can alter this language to state that there will be no refund.] If the Contract is breached by Buyer and the sale and purchase fail to close as a result of such breach, the Earnest Money shall be retained by Seller and considered liquidated damages for Buyer’s breach of the Contract. All income earned on the Earnest Money during the escrow period shall be retained by Buyer. IV. INSTRUCTIONS Seller will not return or otherwise distribute the Earnest Money or any income earned on the Earnest Money during the escrow period without the written consent of both parties to the Agreement. If a conflict between Buyer and Seller occurs, Seller shall deposit the Earnest Money, plus all income earned during the escrow period, with a court of competent jurisdiction located in __________________________________ [Comment: Insert city, county, state]. The Parties shall then bring an action in interpleader. Upon such deposit, Seller shall have no further liability with respect to such Earnest Money, except as otherwise set forth herein or as required by law. V. NOTICES © Copyright 2013 Docstoc Inc. 3 Any further correspondence, including documents, requests, notices and other instructions or notice, shall be in writing and delivered personally or mailed by certified mail to the following addresses: To Seller: _______________________________________ [Instruction: Insert Seller’s contact information.] To Buyer: _______________________________________ [Instruction: Insert Buyer’s contact information.] VI. ARBITRATION Any dispute or claim related to or arising from this Agreement but not from the Contract, its performance, breach, interpretation, validity or enforceability, shall be exclusively (except as provided below) resolved by final binding arbitration before the American Arbitration Association (AAA), utilizing AAA Commercial Arbitration Rules. The arbitrator shall be selected using AAA procedures. The Arbitrator shall render a written decision within thirty calendar days of the hearing. The arbitrator will not award attorney’s fees or punitive, incidental, consequential, treble or other multiple or exemplary damages, and the parties hereby agree to waive and not seek such damages. Awards shall be final, binding and non-appealable, with the exception of the grounds for appeal guaranteed by the Federal Arbitration Act and applicable laws. All awards may be filed with one or more courts, state, federal or foreign having jurisdiction over the party against whom such award is rendered or its property, as a basis of judgment and of the issuance of execution for its collection. VII. ATTORNEY’S FEES If judgment is required to enforce the contents of this Agreement or provide a remedy for a breach, the non-prevailing party will pay court costs and attorney’s fees. Any judgments required to enforce the contents of the Contract shall be as set forth in the Contract. VIII. ASSIGNMENT PROHIBITED Both the Seller and Buyer are expressly prohibited from assigning this Agreement or any rights or interest flowing from this Agreement. Any Assignment will only occur with the express written consent of both parties. IX. MODIFICATION © Copyright 2013 Docstoc Inc. 4 This Agreement shall not be modified, rescinded or revoked in any manner whatsoever, except by written consent of all parties hereto. X. GOVERNING LAW AND CONSENT TO JURISDICTION This Agreement will be interpreted and enforced under the laws of the State of ____________, [Instruction: Insert state.] without regard to conflict of laws. Both parties voluntarily consent to the jurisdiction of all courts in the State of ___________________. [Instruction: Insert state.] XI. ENTIRE AGREEMENT This Agreement contains the entire agreement of the parties, superseding any prior written or oral agreements between them on the same subject matter. Any change, modification, or waiver must be in writing and signed by both parties. IN WITNESS WHEREOF, the parties hereto execute this Agreement on this ____ day of ____________________, 20______. [Instruction: Insert date.] SELLER BUYER Authorized Signature Authorized Signature Name and Title Name and Title WITNESS Authorized Signature Name and Title © Copyright 2013 Docstoc Inc. 5 Exhibit A © Copyright 2013 Docstoc Inc. 6
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