This difference is mind blowing. Many commercial transactions involve tenants on property. It is the mismanagement of the real estate agent is not to obtain estoppel tenant certificates. I had a case that started after the large law firm failed to get a certificate from Estoppel on the sale of a large hotel because it was a „small lease“. While the deal was very amusing, this little lease cost the hotel hundreds of thousands of dollars in unnecessary litigation. This form is used in response to the standard offer agreement and the offer to purchase a buyer`s instructions. AIR`s contract 22.2 benefits the seller if the seller wins. It provides in part: this form is used by tenants who have the opportunity to purchase the premises to inform the owner of their intention. Please note that this form refers to the standard AIR offer, agreement and fiduciary instructions for the purchase of real estate that must have been negotiated, entered into and attached to the lease by the parties. The AIR agreement requires arbitration under the Commercial Rules of the American Arbitration Association, requires the forfeiture of many normal rights in litigation, and requires that each arbitrator be an impartial real estate agent with at least 5 years of full-time experience, both in the area in which the property is located and in the nature of the real estate involved.
Personally, I do not want a non-lawyer (or non-judge) to make a final decision that cannot be challenged. That is why I propose to the parties not to approve the arbitration provision as set out in the AIR agreement. This form meets the State of California`s requirement that real estate agents and sellers disclose to contractors the nature and nature of agency relationships. The CAR agreement is more restrictive because it requires the seller`s approval for any transfer of the buyer`s interest in the agreement. From a practical point of view, the buyer can give in because it would probably be unreasonable for the seller to withhold consent. But this clause can give rise to unnecessary litigation if the seller wants to play games. The CAR clause is in paragraph 30 and is in a relevant part: This form is used by brokers only for the list of real estate for sale or rent. The Air and CAR forms differ in the sale of a signed sales and sale agreement. The AIR agreement does not require the seller`s consent for a buyer to waive his rights to the agreement. This makes it much easier for Treuhand to change the buyer into an LLC owned by the buyer or a third party so that the buyer can make a quick flip.
Paragraph 1.1 of the AIR agreement provides, in the last part of 1.1, that the buyer can give up the contract, but obliges the seller to expressly release the buyer (which means hardly much). There are other ways. Today, I published the first part of an article on changes to the AIR (www.airpractitioner.com/modifications-to-the-air-purchase-agreement-part-1/) purchase agreement. In Part 2, I will focus on the seller`s representations and guarantees. The second part will be published in the coming weeks. In a later article, I propose sections of the contract to buy and sell AIR that sellers may want to revise. Before the vigilance period expires, the buyer should be able to terminate the PPE without penalty and recover the bulk of the deposit (but will often have to pay the trust and securities costs incurred).