An Agreement of Purchase and Sale (“APS”) is a crucial document in the purchase of any new build property. It outlines the terms under which a buyer agrees to purchase a newly constructed or under-construction property from a builder. A thorough review of the APS is essential to ensure the agreement is legally binding, fair, and free from potential disputes.
What is an APS for a New Build? An APS for a new build is a contract between the buyer and builder that specifies the terms of sale, including the purchase price, completion date, contingencies, and other conditions. Once signed, it becomes legally enforceable, committing both parties to the terms.
Some Key Components of an APS for a New Build Property
- Identification of the Parties: The APS must clearly identify the buyer and builder, including legal names and contact details.
- Property Description: The APS must include a detailed description of the property, including its legal address, lot number, and construction details.
- Purchase Price: The agreed-upon price and any deposit amounts and structure must be clearly outlined.
- Contingent Clauses: These can include:
- Completion Timeline: An outline of dates for when possession will possibly take place, along with tentative final closing dates.
- Inspection: A provision allowing the buyer to inspect the property before finalizing the sale.
- Financing: A contingency that the buyer secures financing.
- Closing Date: Specifies when the buyer takes title of the property after construction is complete, and which may differ from the possession date.
- Default and Remedies: Outlines actions if either party defaults, including penalties or loss of deposit.
- Other Terms: May include warranties, timelines for completing unfinished elements, or builder disclosures.
Why APS Review for New Builds is Important?
Reviewing the APS with a lawyer is essential for risk mitigation, ensuring that the agreement is fair and legally sound, and making sure the buyer understands what they are signing. It protects the buyer by ensuring contingencies for delays or defects are in place, and it ensures the builder meets all legal obligations. A well-reviewed APS reduces the chance of future disputes over construction delays, quality, or unfulfilled promises.
A comprehensive APS review is crucial when purchasing a new build property. By addressing potential issues like construction delays, vague terms, or legal compliance, both buyers and builders can ensure a smooth, legally sound transaction. A thorough review protects both parties and helps avoid costly legal issues down the road. Do you or someone you know need assistance? Contact Samantha Machado, Associate Lawyer at Boardwalk Law to learn more: [email protected] / 905.798.5770
