Buy-Sell Agreement between Co-Owners of Real Property by pellcity27

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This form is set up as a Buy Sell Agreement between co-owners of rental property. It applies in the case of the death or offer of a co-owner to sell his interest in the property during his lifetime.

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									             Buy-Sell Agreement between Co-Owners of Real Property

Agreement made on the (date), between (Name of Owner One), of (street address, city,
county, state, zip code), referred to herein as Owner One, and (Name of Owner Two),
of (street address, city, county, state, zip code), referred to herein as Owner Two.

Whereas, Owner One and Owner Two (sometimes referred to herein jointly as Co-
Owners and Individually as Co-Owner) own real property as tenants-in-common at
(street address, city, county, state, zip code); and

Whereas, Owner One and Owner Two desire (1) to provide for the sale by a Co-Owner
during his or her lifetime, or by a deceased Co-Owner’s estate, with the purchase of
such interest by the remaining Co-Owner to be at a price fairly established; and (2) to
provide all or a substantial part of the funds for the purchase in the case of a sale by a
deceased Co-Owner’s estate.

Now, therefore, for and in consideration of the mutual covenants contained in this
agreement, and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as follows:

1.    Owner One and Owner Two own the following described real property (the
Property) as equal tenants-in-common: (legal description).

2.   While this Agreement is in effect, neither Co-Owner shall have the right to assign,
encumber or dispose of his/her interest in the Property except as provided herein.

3.     Upon the death of a Co-Owner, his/her estate shall sell, and the surviving Co-
Owner shall purchase, the deceased Co-Owner’s entire interest in the Property for the
price and pursuant to the other terms provided herein.

4.     If either Co-Owner desires to sell or otherwise dispose of any part of his/her
interest in the Property during his/her lifetime, he/she shall give the other Co-Owner
(herein referred to as Remaining Co-Owner) written notice of his/her intention. If there
is a prospective transferee other than the Remaining Co-Owner, such notice shall state
the name and address of such transferee and the terms and conditions of the proposed
transfer.

5.     Upon receipt of such written notice referred to in Paragraph 4, the Remaining
Co-Owner shall have the right to purchase all of the interest in the Property offered for
sale or transfer. The purchase price shall be the amount established in Paragraphs 8
and 9 below; provided, however, that if a lower price was stated in the notice to the
Remaining Co-Owner, the Remaining Co-Owner shall have the right to purchase said
interest in the Property at such lower price.

6.     The Remaining Co-Owner shall pay for the interest of the selling Co-Owner in
cash (or by cash and a Promissory Note as described in Paragraph 7) on the date of
sale, and thereafter the selling Co-Owner shall not participate in the future profits of the
Property.

7.     The Remaining Co-Owner shall have the right to pay for the interest he/she
purchases upon the following terms: ____ % of the purchase price in cash upon the
date of exercise of the option to purchase with the balance to be evidenced by a
Promissory Note containing the following provisions:

       A.    The unpaid balance of said Note shall bear interest at the rate of ___%
       per annum.

       B.      Principal and interest shall be due and payable at the address of selling
       Co-Owner in (number) consecutive equal monthly installments on the first day of
       each month beginning on the first day of the month following the exercise of this
       option by Remaining Co-Owner. Each subsequent monthly installment shall be
       due and payable on the first day of each succeeding month thereafter until the
       entire indebtedness evidenced by this Note is fully paid.

       C.     In the event default is made in the payment of this Note at maturity, or of
       any installment thereof, whether maturing by expiration of time, by default as
       herein provided, and same is placed in the hands of an attorney for collection,
       then an additional amount of Ten Percent (10%) on the principal and interest of
       this Note shall be added to the same as a collection fee, and the failure to pay
       any installment when due shall mature the entire indebtedness at the option of
       the holder of this Note.

       D.      The Remaining Co-Owner may prepay the principal amount outstanding in
       whole or in part without penalty. The holder of this Note may require that any
       partial prepayments (i) be on the date monthly installments are due, and (ii) be in
       the amount of that part of one or more monthly installments which would be
       applicable to principal. Any partial prepayment shall be applied against the
       principal amount outstanding and shall not postpone the due date of any
       subsequent monthly installments or change the amount of such installments,
       unless the holder of this Note shall otherwise agree in writing.

8.  Owner One and Owner Two agree that at this time the fair market value of each
Co-Owner’s interest in the Property is $_________________, and the purchase price to
be paid by the Remaining Co-Owner pursuant to this Agreement shall be ____% of that
amount. This value shall remain effective for the purposes herein until there is a re-
determination of the value as provided in Paragraph 9.

9.      At the end of each calendar year, the Co-Owners shall re-determine this value
and shall indicate the new values by entries in Schedule A attached hereto. Each new
set of values entered in Schedule A shall be signed by both Co-Owners, and the last
value entered opposite in Schedule A shall be controlling for the purposes of this
Agreement. In determining the value of a deceased Co-Owner’s interest in the Property
after his/her death, the excess of the death claim proceeds over the cash values of the
insurance policies on his/her life which are subject t
								
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