Legal FAQs for REALTORS®
— Contracts and Forms
Is the independent consideration in TAR commercial purchase contracts refundable? (Updated Feb. 17, 2015)
No. The independent consideration paid for a feasibility period in the Commercial Contract-Improved Property (TAR 1801) and the Commercial Contract-Unimproved Property (TAR 1802) is non-refundable similar to the option money in the TREC residential sales contracts. The buyer’s option to have an unrestricted right to terminate the contract for any reason requires independent consideration for the right to terminate. If there is no independent consideration (or if the independent consideration is refundable) the option becomes unenforceable.
In addition, Paragraph 7B of the commercial contracts indicates that the seller will retain the independent consideration regardless of whether the buyer exercises their right to terminate.
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