5 Elements of a Successful Commercial Real Estate Agreement

san antonio commercial real estate attorney

Every commercial real estate transaction, regardless of the type of property and its business purpose requires a contract. Whether for purchasing or leasing, certain elements must always be present in a valid commercial real estate contract. Without these elements, the contract can be voided or deemed unenforceable. Below, we explain the five elements that must be present in a successful commercial real estate agreement.

Inspection Terms

An agreement to purchase commercial real estate must include terms of inspection. Inspection requirements vary from state to state but should include the following:

  • The buyer agrees to purchase the property pending inspection.
  • The specific type(s) of inspection(s) that will be conducted.
  • The date the inspection(s) will be completed.
  • How long after the inspection(s) the buyer has to terminate the agreement.

Inspection terms in commercial leases are typically reserved for the end of the lease period. The landlord may require an inspection at the end of the tenancy to ensure that the property is returned in an agreed-upon manner. 

Price and Financing Terms 

The purchase price and financing terms detail the exact price of the property, how the purchase will be financed, the bank or lender financing the purchase, the exact amount being financed, and any closing costs. If there are closing costs, the agreement should describe whether the seller or buyer will be paying the costs. Also required is the projected closing date. In commercial leases, the price will be the base rent, security deposit, and any other payments the tenant is expected to pay the landlord for the length of the agreement or the lease.


Depending on the state, certain warranties and representations related to the condition, safety, and value of the property must be disclosed and detailed in the agreement. The seller or landlord should clearly and honestly describe any known problems or flaws with the property, how the issues will be addressed, and whether they will be addressed before closing. Some agreements state that the property is being sold or rented as is, meaning the seller or landlord offers no warranties and makes no representations about the property’s condition.

Detailed Description of the Property

One of the critical elements of a commercial real estate agreement is the description of the property to be purchased or rented. The description must include the exact address or location of the property and any additional property included in the purchase or lease such as furniture, other structures, inventory, or fixtures. The description should also include any liens or legal claims against the property.

Remedies in the Event of a Breach

If any party, whether the buyer, seller, landlord, or tenant, breaches or fails to comply with the terms of the agreement, the contract needs to include any remedies to which the non-breaching party will be entitled. Remedies can be monetary compensation, a court order to do or refrain from doing something, or the termination of the agreement altogether. Commercial real estate transactions can be complex and are best handled by local and experienced commercial real estate attorneys like the team at Cokinos | Young. Serving multiple cities, including Dallas, our attorneys will effectively guide business owners through the commercial real estate process at affordable rates. Contact us today for the best commercial real estate representation.

This website uses cookies to improve your experience. By using our site, you provide your consent.

Read More