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Key Provisions of New York Purchase and Sale Agreements

Michael Yazdan

March 9, 2021


In New York, the specific provisions and requirements for a contract of sale for real estate can vary, depending on the type of property and other factors. However, some key provisions that an attorney should know when drafting or reviewing a contract of sale for real estate in New York include:


Property description: The contract should contain a legal description of the property and any relevant boundaries, zoning restrictions, or easements. In a New York contract of sale for real estate, the property description should be clear and accurate to avoid any ambiguity or confusion. The best way to include the property description is to provide a legal description of the property that can be easily identified and located. This typically includes:

  1. The street address of the property

  2. The lot and block number, if applicable

  3. The description of the property's boundaries, such as a metes and bounds description or a reference to a recorded survey

In addition, it is customary to attach a copy of the property survey to the contract of sale. This can provide additional information and clarification about the property boundaries and other important details. Ultimately, the goal is to provide a clear and accurate description of the property that leaves no room for misunderstandings or disputes. An experienced real estate attorney can help to ensure that the property description in a New York contract of sale is accurate and complete.


Purchase price and payment terms: The contract should specify the purchase price for the property, how and when it will be paid, and any contingencies that must be met before the sale can be completed. These are critical components of a New York contract of sale for real estate. To ensure that these provisions are clear and accurate, it's important to include the following information:

  1. Purchase price: The contract should specify the purchase price for the property, which is the amount that the buyer will pay to the seller. This should be stated in both words and numbers.

  2. Payment terms: The contract should also include the payment terms, which specify how and when the purchase price will be paid. This may include the amount of the down payment, the due date for the balance of the purchase price, and any interest or other charges that will be assessed.

  3. Contingencies: The contract may also include contingencies that must be met before the sale can be completed, such as financing contingencies or contingencies related to the sale of another property.

  4. Closing costs: The contract should also address the payment of closing costs, which are the various fees and expenses associated with the transfer of ownership. The contract should specify which party is responsible for paying these costs and which costs will be paid by the buyer or the seller.

Closing date: The contract should specify the date on which the sale will close, which is when the property ownership transfers from the seller to the buyer. To ensure that the closing date is included correctly, it's important to consider the following:

  1. Specific date: The contract should specify a specific date for the closing, which is the date on which the ownership of the property transfers from the seller to the buyer. This date should be stated in both words and numbers to avoid any confusion.

  2. Time of day: The contract should also specify the time of day when the closing will occur, as this can impact the availability of the parties involved.

  3. Place of closing: The contract should specify the location where the closing will take place, which is typically the office of the buyer's attorney or a title company.

Representations and warranties: The contract should include representations and warranties from the seller regarding the condition of the property, any known defects, and any environmental issues (note: contracts also include representations and warranties made by the buyer in favor of the seller). These statements are intended to provide the buyer with assurances about the condition and characteristics of the property. Some common representations and warranties that may be included in a contract of sale include:

  1. Title: The seller represents and warrants that they have good and marketable title to the property, and that there are no liens or encumbrances on the property that would prevent the buyer from acquiring clear title.

  2. Condition of the property: The seller represents and warrants that the property is in good condition and repair, and that there are no defects or material issues that would affect the value or use of the property.

  3. Compliance with laws: The seller represents and warrants that the property is in compliance with all applicable laws, regulations, and ordinances, including zoning laws and building codes.

  4. Utilities and services: The seller represents and warrants that all utilities and services to the property are in good working order and are available for use by the buyer.

  5. Disclosure of material facts: The seller is obligated to disclose any material facts that may affect the buyer's decision to purchase the property, including any known defects or issues with the property.

Contingencies: The contract should specify any contingencies that must be met before the sale can be completed, such as financing or inspection contingencies. Here are some contingencies that all attorneys should consider while negotiating a contract of sale:

  1. Financing contingency: This contingency requires the buyer to obtain financing for the purchase of the property within a specified period of time. If the buyer is unable to obtain financing, they may be able to terminate the contract without penalty.

  2. Inspection contingency: This contingency allows the buyer to have the property inspected by a professional inspector within a specified period of time. If the inspection reveals any defects or issues with the property, the buyer may be able to negotiate repairs or terminate the contract.

  3. Appraisal contingency: This contingency requires the property to be appraised at or above the purchase price. If the property appraises for less than the purchase price, the buyer may be able to negotiate a lower price or terminate the contract.

  4. Sale of another property contingency: This contingency allows the buyer to terminate the contract if they are unable to sell their current property within a specified period of time.

  5. Title contingency: This contingency requires the seller to provide clear and marketable title to the property. If the title is found to be defective or encumbered, the buyer may be able to terminate the contract.

In each case where the buyer is permitted to terminate the contract, the seller is required to direct the escrow company to return the initial deposit to the buyer.


Title and title insurance: The contract should address the condition of the title to the property and specify whether the seller will provide title insurance to the buyer. These provisions are intended to ensure that the buyer acquires clear and marketable title to the property, free from any liens, encumbrances, or defects. Some common provisions that may be included in a New York contract of sale for real estate dealing with title include:

  1. Title search: The contract should require the seller to provide a current title search for the property, which will show any liens, encumbrances, or defects that may affect the title.

  2. Title insurance: The contract may require the seller to provide title insurance for the property, which will protect the buyer against any claims or losses that may arise due to defects in the title.

  3. Representations and warranties: The seller may be required to make representations and warranties about the title to the property, including that they have good and marketable title to the property, that there are no liens or encumbrances on the property, and that there are no defects in the title.

  4. Closing requirements: The contract may require the seller to satisfy any outstanding liens or encumbrances on the property before the closing takes place, and to provide proof of such satisfaction.

  5. Remedies for defective title: The contract may specify the remedies available to the buyer in the event that the title is found to be defective, such as the right to terminate the contract or the right to receive damages.

Default and remedies: The contract should specify the consequences if either party defaults on the contract, such as the right to terminate the agreement, retain earnest money, or seek damages. These provisions are intended to ensure that both parties understand their obligations and responsibilities under the contract, and to provide a framework for resolving disputes that may arise. Some common provisions that may be included in a New York contract of sale for real estate dealing with default and remedies include:

  1. Default provisions: The contract should define what constitutes a default by either the buyer or the seller, such as failure to perform or breach of a representation or warranty.

  2. Notice and cure period: The contract may require the non-defaulting party to provide notice of the default to the defaulting party, and to allow a specified period of time for the default to be cured.

  3. Termination of contract: The contract may provide for termination of the contract in the event of a default by either party, with the non-defaulting party entitled to retain any deposit or other amounts paid by the defaulting party.

  4. Liquidated damages: The contract may specify a liquidated damages provision, which sets a predetermined amount of damages to be paid by the defaulting party in the event of a breach.

  5. Specific performance: The contract may provide for specific performance, which requires the defaulting party to perform its obligations under the contract, rather than simply paying damages.

Closing costs: The contract should specify which party will be responsible for paying the various closing costs associated with the sale, such as transfer taxes, title fees, and attorney fees. These provisions are intended to allocate the responsibility for payment of these costs between the buyer and the seller. Some common provisions that may be included in a New York contract of sale for real estate dealing with closing costs include:

  1. Purchase price adjustments: The contract may provide for adjustments to the purchase price to account for certain expenses, such as taxes, utilities, and other charges that may be prorated at the closing.

  2. Transfer taxes: The contract should specify which party is responsible for paying the New York State and City transfer taxes, which are imposed on the sale of real property in New York.

  3. Title insurance: The contract should specify which party is responsible for paying for the title insurance policy, which protects the buyer against losses resulting from defects in the title.

  4. Closing fees and expenses: The contract should specify which party is responsible for paying various closing fees and expenses, such as recording fees, title search fees, and attorney's fees.

  5. Prorations: The contract may require the parties to prorate certain expenses, such as property taxes and homeowner association dues, based on the date of the closing.

Signatures: The contract should be signed by both the buyer and the seller. In New York, the statute of frauds is a legal doctrine that requires certain contracts, including contracts for the sale of real estate, to be in writing in order to be enforceable in court. The statute of frauds is codified in Section 5-703 of the General Obligations Law.





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