A property agreement in commercial real estate refers to the contract signed between the buyer and seller of a commercial property. It sets out the terms of the sale transaction, rights and obligations of both parties.

Some of the key elements of a commercial property agreement include:

• Property details: Identification and description of the property being sold including the address, lot and block numbers, fixtures and any exclusions.


• Purchase price: The agreed upon price that the buyer will pay the seller for the property. May include terms of payment.


• Earnest money: An initial deposit or "good faith" amount paid by the buyer to show commitment to the deal. This is credited toward the purchase price.


• Contingencies: Conditions that must be met for the sale to be finalized like property inspections, buyer obtaining financing, occupancy by existing tenants, etc.


• Closing date: The agreed upon date by which the sale transaction must be finalized and funds/title transferred. May include extension options.


• Prorations: Adjustments and responsibility between buyer and seller for prepaid items like property taxes, utilities and lease payments.


• Representations and warranties: Statements by the seller guaranteeing certain aspects of the property like legal and physical condition.


• Default: Consequences if either buyer or seller fails to fulfill their obligations under the agreement.


• Miscellaneous provisions: Signatures, governing law, assignments and any other agreed upon terms.