Contingencies are provisions present in contracts that must be met for the contract to be valid. Parties in real estate contracts commonly use contingency clauses to ensure that both parties perform certain tasks. New York residents involved in real estate transactions should educate themselves on what contingency clauses are and how they work.
Under real estate law, one or both parties in a contract can use contingencies to ensure the other party performs a certain task. Essentially, a contingency clause affords either party the chance to get out of the contract if a certain condition is not met. In many cases, a court will require placing a contingency into a contract as a good-faith measure.
Real estate contingency clauses
Contingency clauses in real estate contracts come in a variety of forms. For instance, a seller may require that a buyer obtain financing before making a written offer on a subject property. This type of contingency ensures that the seller’s home is not off the market while a buyer tries to find financing.
Conversely, many buyers put contingency clauses in their written offers. A popular contingency that buyers put in place says that the home must pass a professional inspection before the transaction can be complete.
Real estate transactions are about much more than simply buying and selling a piece of land or a home. There are many intricacies to consider, multiple contracts and many legalities that play a role in the process.
If you conduct a real estate transaction, you should work with an attorney who is familiar with the real estate laws of your state. This attorney can review existing contracts, help you create contingencies and ensure that you have a way out of the contract should the need for a legal exit arise.