A buy-sell agreement is an agreement between the owners of the business for purchase of each others interest in the business. Such an agreement will spell out the terms governing sale of company stock to an outsider and thus protect control of the company. It can be triggered in the event of the owner's death, disability, retirement, withdrawal from the business or other events. Life insurance owned by the corporation is often used to provide the funds to purchase the shares of a closely held company if one of the owners dies.
The time to prevent disputes is before they occur. Experience proves that owners anxieties created in dealing with one another are inversely proportional to the effort they spend addressing business problems in the event that they should happen. Dealing with these contingencies before they manifest themselves is the secret to a harmonious business relationship with other owners, Use the checklist below to determine areas where you may need assistance.
Massachusetts Checklist — Buy/Sell Agreement— - Contingencies: A Comprehensive Guide When engaging in a buy/sell transaction in Massachusetts, it is essential to have a well-drafted agreement that includes all necessary contingencies to safeguard the interests of the parties involved. This detailed checklist provides an overview of the key elements to consider when drafting or reviewing a Massachusetts buy/sell agreement, specifically focusing on contingencies. 1. Financing Contingency: In the case of a buyer who requires financing to complete the purchase, including this contingency ensures that the transaction is subject to the buyer securing satisfactory financing terms. It allows the buyer to back out of the agreement without losing their deposit if suitable financing cannot be obtained. 2. Inspection Contingency: To protect the buyer, an inspection contingency grants the right to conduct a professional property inspection. This clause should specify the timeline for completing inspections and provide the buyer with the option to negotiate repairs or terminate the agreement if significant issues are discovered. 3. Appraisal Contingency: The inclusion of an appraisal contingency enables either party to terminate the agreement or renegotiate the purchase price if the appraised value falls below the agreed-upon price. It protects buyers from overpaying and sellers from potential losses. 4. Title Contingency: A title contingency ensures that the property's title is free from any undisclosed liens, encumbrances, or legal disputes. It allows the buyer to back out if title issues arise during the title search period. 5. Home Sale Contingency: For buyers who need to sell their current home before purchasing a new one, a home sale contingency is essential. This clause permits the buyer to proceed with the purchase only upon the successful sale of their existing property within a specified time frame. Different Types of Massachusetts Checklist — Buy/Sell Agreement— - Contingencies: 1. Residential Real Estate Buy/Sell Agreement: This type of agreement is specifically tailored for residential property transactions. It addresses contingencies relevant to residential properties, considering the unique requirements and concerns of individual homebuyers. 2. Commercial Real Estate Buy/Sell Agreement: Commercial property transactions come with their own set of complexities. This type of buy/sell agreement includes contingencies that cater to the specific needs of commercial buyers and sellers, covering aspects such as zoning, environmental issues, and tenant leases. 3. Multi-unit Property Buy/Sell Agreement: When dealing with multi-unit properties such as apartment buildings or condominiums, a specialized buy/sell agreement is necessary. It encompasses contingencies related to tenant occupancy, lease agreements, and the overall management of the property. By considering these contingencies and utilizing appropriate buy/sell agreements tailored to the specific property type, buyers and sellers in Massachusetts can ensure a smoother and more secure transaction. It is always prudent to consult with a qualified real estate attorney to ensure compliance with Massachusetts laws and to address any unique circumstances or concerns.Massachusetts Checklist — Buy/Sell Agreement— - Contingencies: A Comprehensive Guide When engaging in a buy/sell transaction in Massachusetts, it is essential to have a well-drafted agreement that includes all necessary contingencies to safeguard the interests of the parties involved. This detailed checklist provides an overview of the key elements to consider when drafting or reviewing a Massachusetts buy/sell agreement, specifically focusing on contingencies. 1. Financing Contingency: In the case of a buyer who requires financing to complete the purchase, including this contingency ensures that the transaction is subject to the buyer securing satisfactory financing terms. It allows the buyer to back out of the agreement without losing their deposit if suitable financing cannot be obtained. 2. Inspection Contingency: To protect the buyer, an inspection contingency grants the right to conduct a professional property inspection. This clause should specify the timeline for completing inspections and provide the buyer with the option to negotiate repairs or terminate the agreement if significant issues are discovered. 3. Appraisal Contingency: The inclusion of an appraisal contingency enables either party to terminate the agreement or renegotiate the purchase price if the appraised value falls below the agreed-upon price. It protects buyers from overpaying and sellers from potential losses. 4. Title Contingency: A title contingency ensures that the property's title is free from any undisclosed liens, encumbrances, or legal disputes. It allows the buyer to back out if title issues arise during the title search period. 5. Home Sale Contingency: For buyers who need to sell their current home before purchasing a new one, a home sale contingency is essential. This clause permits the buyer to proceed with the purchase only upon the successful sale of their existing property within a specified time frame. Different Types of Massachusetts Checklist — Buy/Sell Agreement— - Contingencies: 1. Residential Real Estate Buy/Sell Agreement: This type of agreement is specifically tailored for residential property transactions. It addresses contingencies relevant to residential properties, considering the unique requirements and concerns of individual homebuyers. 2. Commercial Real Estate Buy/Sell Agreement: Commercial property transactions come with their own set of complexities. This type of buy/sell agreement includes contingencies that cater to the specific needs of commercial buyers and sellers, covering aspects such as zoning, environmental issues, and tenant leases. 3. Multi-unit Property Buy/Sell Agreement: When dealing with multi-unit properties such as apartment buildings or condominiums, a specialized buy/sell agreement is necessary. It encompasses contingencies related to tenant occupancy, lease agreements, and the overall management of the property. By considering these contingencies and utilizing appropriate buy/sell agreements tailored to the specific property type, buyers and sellers in Massachusetts can ensure a smoother and more secure transaction. It is always prudent to consult with a qualified real estate attorney to ensure compliance with Massachusetts laws and to address any unique circumstances or concerns.
