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In: Operations Management

What clauses are included in a commercial real estate sales contract that do not appear in...

What clauses are included in a commercial real estate sales contract that do not appear in a residential contract?

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Expert Solution

Below clauses are included in a commercial real estate sales contract that do not appear in a residential contract:

1. Multiple party clause: In a commercial real estate contract, multiple parties are involved which is not the case with residential real estate contract. Due to multiple parties involvement, the commercial real estate contract becomes more complex and challenging.

2. Clause for leasing arrangements: In commercial real estate contract, there might be multiple tenants to whom the commercial complex is already leased out. Hence the buyer needs to take over the seller's leasing obligations and new paperwork for tenants needs to be carried out.

3. Clause for formation of legal entities: In commercial contract, there is a formation of legal entities since every party wants to limit their liability in a commercial contract and hence there is a specific clause for formation of legal entities inthe commercial contract which is not present in residential contract.


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