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Real Estate Contracts - Read Between the Lines
Keeping all of the different agreements and contracts present in the world of real estate straight can be tough, especially since so many of them seem to do similar things as other already existing contracts. A real estate license agreement is used by a land owner who is looking to license a piece of land to another party for use. Such examples would be a university licensing a piece of land to a company to build retail space on or to a company to rent out a retail space for a set period of time. A university could also use a license agreement to rent out land or buildings to a fraternity or any other outside party. Let's break down one of these real estate license agreements and see how they work.
Compared to other real estate forms and agreements, a real estate license agreement usually runs about ten pages and is considered a fairly lengthy legal document. Just like most contracts, a real estate license agreement starts by defining the parties involved in the legal agreement and the address of the property that is being licensed. This section will be followed by several "Whereas" definitions that lay out who owns what, who is in what position relative to each other and any other legal jargon that needs to be ironed out for the rest of the contract to make sense.
In the next section, the group that is giving the license will outline everything they expect from the lessee in terms of what they can do with the property, how they can use it, what the limitations are and what happens if they violate the terms of the lease. While we are dealing with real estate license agreements, you may come across similar agreements if you're a sports fan looking to buy season tickets as many sports teams now use personal seat licenses, or licenses for suite rentals at arenas and stadiums.
The rules sections of most real estate license agreements start by defining the term of the lease then move on to officially declaring that the current lease holder is giving control of the property to the lessee. The following sections tend to be lengthy and are very important to the meat of the contract. The renting party will spell out all of the rules and regulations you must abide by during your license agreement. Most of them are common sense, but some companies have been famous for inserting unreasonable clauses into the rules section which, if signed, are legally binding.
The next part of the contract talks about any responsibilities the outside party has in the way of repairs and maintenance, while the following section will talk about the rights the owning party has when it comes to visiting the property and inspecting it.
Every real estate license agreement has a clause or two about new additions or changes the renting party can make on the property, as well.
As you can see, the average real estate license agreement can be a bit complicated, so if you aren't familiar with how they work, get some advice before you put your pen to paper.
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When it comes time to get the deal done for both buyers and sellers, we line up all the legal documents (there are many!) and make sure the train runs on-time. You can expect us to carefully manage the process. Most importantly, you’ll be apprised of the deal’s progress each step of the way. We’re friendly, competent guides who’ll help you reach the best possible outcome and achieve your real estate goals.
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