[FL] [FL] How do I create an offer with contingencies for a commercial property?
I’m purchasing a property zoned to be an RV park. I want to include contingencies such as all permits going through, SBA financing going through, a 120-day due diligence period, $1,000 earnest money, etc.
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Once the offer is accepted, the contract is then drafted and signed. After the signing, you would usually enter the due diligence and contingency periods in the contract.
https://www.miamirealtors.com/wp-content/uploads/bsk-pdf-manager/2020/04/CC2v5.pdf is what the contract would look like. For the offer, you would usually include the contract with what you are offering, and a letter of intent to purchase, since this is a commercial deal.
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I'm trying to create an offer with contingencies for a commercial property.
Lexi, Chatbot
I understand you're looking to create an offer with contingencies for a commercial property. Have you already identified the specific contingencies you want to include?
Not entirely. I want to be sure I include all the right ones.
Lexi, Chatbot
Are you familiar with the local laws and regulations regarding commercial real estate transactions in the area where the property is located?
Somewhat.
Lexi, Chatbot
Is there anything else the Real Estate Lawyer should know before I connect you? Rest assured they'll be able to help with your offer contingencies.
No.
Elizabeth
Welcome and thank you for using AskaLawyer. My name is Liz and I'm the attorney who will be assisting with your legal question.
Elizabeth
So I can best help, what concerns do you have with the offer?
I want to add contingencies to my offer and make sure I include all that I should.
Elizabeth
Are you using a realtor?
No.
Elizabeth
Thank you for clarifying, how can I help?
I’m purchasing a property zoned to be an RV park. I want to include contingencies such as all permits going through, SBA financing going through, a 120-day due diligence period, $1,000 earnest money, etc.
Elizabeth
The offer usually wouldn't be where you place the contingencies, that would go in your formal contract.
So what would my offer entail? When does the formal contract happen? I want to lock in the property so it can’t be sold to someone else. 120-day period to do due diligence.
Elizabeth
Once the offer is accepted, the contract is then drafted and signed. After the signing, you would usually enter the due diligence and contingency periods in the contract.
https://www.miamirealtors.com/wp-content/uploads/bsk-pdf-manager/2020/04/CC2v5.pdf is what the contract would look like. For the offer, you would usually include the contract with what you are offering, and a letter of intent to purchase, since this is a commercial deal.
So the offer, the contract, and letter of intent are all separate documents? But they are all submitted on the same date?
Elizabeth
For commercial, yes, because the seller can then redline your offer and contract to make a counteroffer.
What would the offer document need to entail? Can I have a template? You sent me the contract. Can I just use that as a template as well? Is there a document for letter of intent too?
Elizabeth
https://eforms.com/letter-of-intent/real-estate/commercial-purchase/ has a sample letter of intent.
What about the offer letter?
Elizabeth
The letter of intent is your offer. The actual offer letter is for residential real estate contracts, and it's basically similar to the letter of intent.
Okay so I just need a letter of intent and a contract? Anything else? He said he would do $1,000 earnest money and hold it himself. Do I need to include that in the contract or letter of intent? We are planning on not using a title company or escrow.
Elizabeth
Hold it himself and not in escrow?
Correct and I’m okay with that.
Elizabeth
That does create a risk. You won't need anything else to begin. You would of course also get disclosures from them, an inspection, and the deed would need to be prepared.
What are all those things? I don’t know any of that.
He has the deed. I have a picture of it. It looks free and clear.
Elizabeth
Disclosure is when you receive a list of all things possibly wrong with the property. An inspection is done by a third party to verify things that may be wrong. The deed is the new deed which is prepared to transfer it to you. After the sale, it has to be filed with the county recorder.
What if there isn’t anything wrong with the property? It’s raw land. Can we transfer the deed ourselves with the county recorder?
Elizabeth
You still need to create a deed. Also, do you intend to develop the raw land?
I do intend to develop it. Can I create a deed at the county office?
Elizabeth
You have to create the deed before you go to the county to record it. If you intend to develop it, you may want to, for example, clarify if it needs septic, or can connect to public sewer and utilities. Does it have any known defects, like potential sinkholes?
I already know it needs septic and well. It doesn’t have any known defects and I will be sure that he signs a contract saying that. Can I create the deed on my own with him? How is that created?
Elizabeth
With septic, in order to have it placed it needs to do something called a perc, so a test is required.
I will be sure to include that all utilities will need to be permitted to be fully developed before closing. Can I create the deed on my own with him? How is that created?
Elizabeth
You can create a deed on your own.
https://www.monroecounty-fl.gov/DocumentCenter/View/336/Sample-Warranty-Deed-042024?bidId= shows a template.
So then I take that to the county office and get it transferred into my name or does that happen at closing (after the 120-day due diligence)?
Elizabeth
Closing is when you guys sign and notarize the deed, then it’s filed.
Elizabeth
I know the law can be challenging, so if I can clarify anything, please let me know.
Elizabeth
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