ATG News Release
CONTINGENCIES IN REAL ESTATE CONTRACTS CAN MAKE OR BREAK DEAL
"Typical contingencies have to do with the sale of the new buyer's existing home or the approval of a mortgage," according to Peter J. Birnbaum, president and CEO of Attorneys' Title Guaranty Fund, Inc. (ATG), the state's largest independent title insurance company with 3,750 lawyer-members.
"However, there are other scenarios that can get very specific, for example, inspection approvals, repairs, or landscaping. The best advice for buyers or sellers is to make sure that an experienced real estate attorney drafts or reviews the language of the contingency," he said.
There can also be offbeat sales contingencies that warrant close inspection. "If it's in the contract, it needs to be taken seriously," Birnbaum added.
Birnbaum notes an actual real estate deal that was contingent upon the new owners keeping the previous owners' dog. The elderly home sellers were moving into a nursing home and couldn't keep their pet; the contingency included keeping the chain link fence in place for the dog, and visitation rights.
"Offbeat sales contingencies like this one are few and far between, but they underscore the importance of the contingency as a deal maker or breaker," Birnbaum continued. "If a contingency is not met by the deadline indicated in the contract, either party has the legal right to cancel the contract and bow out of the deal."
He concluded: "Properly-drafted contingencies are critical because they protect both parties. A good real estate attorney will carefully draft contingency clauses so there is no room for misunderstanding."