, , ,

Industrial Purchase and Sales Agreement

This article outlines specific legal concerns related to an Industrial Purchase and Sales Agreement. We’re going to include escrow instructions as we believe this is common for title and escrow services to be combined. This was actually used for a flex industrial property but it’s really applicable to any type of multi-tenant building. It is a seller-friendly agreement, so there’s going to be a lot more seller protection. We will also post another one shortly that is more buyer friendly.

Note from Spencer: This is another post in a growing section we call ‘A.CRE Legal‘. One of Texas’ top real estate attorneys, Ronald Rohde, has graciously offered to share his time, expertise, and open his library of real estate legal templates for the A.CRE audience. Click here to learn more about Ron or to contact him directly.

You can download this free industrial purchase and sale agreement and then make necessary changes to benefit your side in the transaction.

Industrial Purchase and Sales Agreement Template Walkthrough

Identifying the Parties in an Industrial Purchase and Sales Agreement

This is a critical part of the contract. Both the Seller and the Purchaser need to be properly identified to ensure the validity of authority to convey. In particular, pay attention to the ownership of multiple parcels that may not be obviously different ownership. While most drafting errors in the Purchaser and Seller entities can be remedied prior to closing, it is possible for a misidentification to limit one party’s recourse.

Identifying the Purchaser Entity in an industrial PSA

For the Purchaser, it’s common to form a shell LLC entity as the signing Purchaser in all real estate deals. This entity then will assign such contract to the Special Purpose Entity (SPE) prior to closing and taking title. The shell SPE is important to protect the Purchaser in the event of any Purchaser default or other monetary obligations which survive termination of the PSA. As a Seller, you want to ensure that individuals or other corporate entities that have assets remain jointly liable beyond just the shell SPE.

Identifying the Seller Entity in an industrial PSA

Beyond demonstrating a basic level of proficiency in records research, properly identifying the Seller establishes credibility for any unsolicited or non-represented offers. It’s critical to name the correct party, especially if you have multiple owners within an industrial park. Note that it’s not necessary to try and dig into proper ownership of the entity, or to try and create a signature block for the seller, just confirm parcel ownership and the number of parcels you intend to purchase.

Opening instructions for an Industrial Purchase and Sales Agreement

We think it’s always important to do the PSA plus binding instructions on the title company because, as a Buyer, you want them as a party to this contract when they control substantial earnest money. There are almost always issues, so if we need to sue for breach of contract we have this agreement that governs the title company as escrow agent.


Certain real property and improvements is a common description, but lately, the scope has expanded and this is something we like to talk about. The real property (land and permanent improvements thereon) also combines with a lot of intangible intellectual property. We may want the names, phone numbers, photos, website directory listings, trade names, websites, etc. If they’ve got a great website with traffic, this is something you want to purchase.

Certain Basic Definitions

Contact information: You may want to include all the information as possible. You will identify the broker and the buyer with their legal name, address, email, and phone numbers. You can also include who would be their attorney with their contact information as well.

Personal property: We start to expand these clauses including logos and registered trademarks, there are really a lot of URL domain names, social media accounts like a Facebook page, and Google to drive tenants, especially on the multi-family side or consumer-based.

Title Company: Usually, the title company will be the same as the escrow agent.

Sale of Property; Purchase Price

Deposit: It is not very common to see only two days, it is a very short period. We usually see three or more days.

Independent consideration: This clause may not be very useful in other countries or states, but it is a clause that is commonly used in Texas.


Closing date: The extension option “two business days prior to the initial closing date and a -day extension,” is actually very generous. Other contracts would require a full week or hard money deposited to purchase such a long extension period.

Title Matters

These are all obligations of the seller and they are all quite normal. You definitely set up each of the periods where the buyer can object, the seller can respond, and then a deadline for the buyer to respond, and then the seller responds. It’s good to have that additional structure, we have deadlines for each party to keep the ball moving back and forth with actual deadlines.


Notice: This contract has 48 hours notice, but sometimes if it’s buyer’s friendly it has only 24 hours.

Testing and Surveys: Returning the property to its original condition, that’s not always listed. A lot of people will fill in boring testing holes, but this template is very explicit in terms of what you have to do to restore the property.

No Reliance on Documents: This one can be a sticking point for either side; sometimes we modify this for the buyer’s benefit. The Buyer can put some responsibility, representations, or warranties on the seller for documents that they provide. From the seller’s perspective, they do not want to be held liable for any statements or documents provided to the buyer.

Termination notice: If you are going to terminate and want your earnest money back, it’s critical that you understand everything in this paragraph and that your lawyer strictly complies with it. There can be timing requirements, notice delivery, stated reasons, ambiguous termination language, etc. Do not risk your earnest money by creating any conditional (if, then) statements. Do not add any factual basis for termination that could be construed as contingent termination.

Escrow matters

These are all your seller obligations and we think it’s really important to include all these documents as a form so you have an opportunity to actually see the form of the Special Warranty Deed, the form of the Tenant Notice Letter, etc. You don’t want to go under contract and then create a disagreement about what should be on each document. Tenant Estoppel letters frequently create problems if a Buyer expects additional details to be confirmed by the tenants, but the tenants may have a form of estoppel per their own lease. Therefore, it creates a difficult situation for the seller. If these documents were in the Purchase and Sales Agreement then all you have to do is fill in the party’s names.

Prorations and adjustments: We spend a lot of time in this clause because industrial is unlike any other property, in industrial you typically have fewer tenants and they’re writing larger checks. As a result, each tenant becomes more valuable and if one of those tenants has a dispute or he’s late for whatever reason and you close on the third, he may not pay and you really want to make sure that you get that money prorated or you get it back, or you have some understanding of what the proration should be post-closing for buyer obligation to remit those funds for the prorated time.

Property Being Sold “AS-IS/WHERE-IS”; Release

AS-IS condition: This one is pretty big, this is a lot of buyer acknowledgment. We would remove this clause and many of the acknowledgments of the buyer–particularly for items we may not know. We don’t want our client to initial this if they don’t have all of those understandings.

Damage or Destruction; Condemnation

Material event: We spend a lot of time on defining this threshold, this example it’s kind of high, we probably would like something closer to the purchase price. But if there is structural damage and we want to terminate because we don’t know the extent of damage (foundation, roof, etc.) and that puts more risk on the buyer. To negate that automatic risk, we include detailed procedures about determining the contractors, the inspections, and third-party inspectors to evaluate and ultimately estimate the impact to value to dictate what happens to the contract. It should cover almost every type of situation.

Representations and Warranties

This is where you really want to make sure that they are providing accurate rent rolls: both during due diligence and bring down not more than 3 days before closing. In addition, any executory contracts and due diligence provided are true, correct, and complete copies. That can come out later in litigation, where the seller had a document and didn’t pass it on even though he really had it.

This is a very detailed contract with many seller favorable clauses. If you are looking to sell your industrial property this Industrial Purchase and Sales agreement is perfect for your needs. We didn’t spend a lot of time on every clause, but as always, if you have any questions please feel free to contact us and we would be happy to help you.

Download the Industrial Purchase and Sales Agreement Template

To make this legal template accessible to everyone, it is offered on a “Pay What You’re Able” basis with no minimum (enter $0 if you need) or maximum (your support helps keep the content coming – typical legal document templates sell for $100+). Just enter a price together with an email address to send the download link to, and then click ‘Continue’.

We regularly update the template (see version notes). Paid contributors to the Industrial Purchase and Sales Agreement template receive a new download link via email each time the template is updated.

Version Notes


  • Initial release

About the A.CRE Legal Contibutor: Ronald Rohde has over ten years of legal experience with real estate transactions, leasing, and investment. He received his undergraduate degree from Cornell University and his juris doctor from the University of Miami.