REAL ESTATE / CONSTRUCTION AGREEMENTS

Why are Real Estate Contracts Required?

The economic effect of any contract is to shift the risk from one party to another. In a real estate contract, you specify how the contractor should develop the property. The catch is that developing a property is a long-term commitment. Without a written contract, as time passes, the possibility for non-performance increases. Without written proof to enforce the original agreements, it is just a he-said-she-said argument.

The risk, however, need not be shifted entirely from one party to another. Generally, it is allocated so that each party shares the uncertainty in the contract. If the risk exceeds the tolerable limits, it is assigned to either party alone. For this purpose, every provision in a construction contract can be interpreted as a mechanism for shifting the risk.

A real estate contract outlines the terms of engagement between the client and the developer. It helps in charting out a plan of action to be followed for the duration of development. This is a great way to communicate expectations between the developer and the client. Because of how dynamic the changes in property development are, it is supposed to be prepared after exercising due care.

“Your agreement should not only communicate the expectations for now but should accommodate for any uncertainties that might arise in the future.”

Drafting a Real Estate Agreement

Writing a construction contract can be tricky because you have to envisage and quantify so many things that are abstract yet. Much of the contract is based on guesswork quantified because the requirements can be volatile. If you don’t have much experience in drafting agreements and but are entering into a construction contract for the first time, it can prove to be quite a hurdle.

Our real estate documents are cumulative efforts of all the legal knowledge accumulated over years of industry experience. When you purchase our templates, you buy security, quality, and carefully drafted terms that have been proof-read by industry experts and peers. You can relax after purchasing these templates because your interests are taken care of in property development.

“When large sums of money are stake, honesty and recollection of the other party to resolve the vague clauses can’t be relied upon. When you purchase our agreements, the templates give all the clauses that define all the parties’ responsibilities clearly.”

One crucial clause that a construction contract needs to include is regarding third party claims. If a third party has suffered because of the property development, you can have a potential lawsuit brewing.

That is why, any contract is a vessel for transferring the maximum liability onto another party, and a real estate contract is no different. If a contract isn’t appropriately drafted, the property developer could use the loopholes to cause significant loss to the client.

When you purchase our agreements, we offer completeness and quality. We have a comprehensive set of agreement templates that you can buy. Each of those is tailored for a specific purpose and use.

If, however, only a particular contract is required, you can browse through our exhaustive list, and choose what’s most relevant. We are confident in meeting your needs need because of the quality and professionalism of the products we offer.

The agreements in our product package are

• Construction contracts including agreements between the contractor, owner, and construction managers, design and construction of new facilities, cost-plus incentives, expansion contracts, development, construction, and maintenance, development and receivables management
• Engineering contracts including procurement and construction, facility and factory construction, HCRI disbursement, IRUs, Management services, project development, reciprocal easement, and turnkey contracts
• Purchase and sale contracts including easement use and right of access, and sale and purchase agreement
• Real estate agreements including escrow, fixture filing, time-sharing, and E&P REIT trust bylaws agreement
• Establishment expenses including granite construction and lease of plant agreement
• General contracts that define the rules and definitions of a construction agreement
• Addendum or termination agreements, including amended and restated construction loan agreement, termination to build, an amendment to construction department lease.

After you purchase our templates, the only thing to focus on is communicating to the developer how the residential property should be constructed, or how the commercial space should be developed. Our products have T&Cs that have been written by SMEs and traffic-light reviewed by peers.

Instead of spending valuable resources on legal counsel for drafting agreements you’re not sure of, purchase our templates at an affordable cost. When large sums are involved, honesty and someone’s ability to recollect the terms of the original oral agreement can’t be relied upon.