My client submitted an offer for a commercial property using the Commercial Contract—Improved Property (TAR 1801) with a request for a feasibility period and the right to inspect the property. The seller rejected my client’s offer because he is selling the property “as is” and not doing repairs. Therefore, the seller claims the feasibility period and right to inspect are not necessary.
The listing agent said we could submit another offer and leave Paragraphs 7A and 7B blank. Are the Present Condition Paragraph and Feasibility Period Paragraph mutually exclusive?
No. First, all buyers purchase property “as is”. Paragraph 7A states that the buyer accepts the property in its present condition (“as is”). If the seller agrees to make repairs to the property, Paragraph 7A also contains space to list those specific repairs.
Second, even though a seller has stated he will not make any repairs, a buyer will typically want the right to inspect the property and to terminate should the condition of the property be unacceptable. While a seller could refuse to agree to the feasibility period, it is generally not a good idea to prevent a buyer from having a right to freely inspect the property. It should be stressed to the seller that agreeing to a buyer’s feasibility study period and inspection right does not obligate him to complete any repairs other than those already agreed upon under Paragraph 7A.