Seller Financing Contract Template for Denmark

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Key Requirements PROMPT example:

Seller Financing Contract

I need a Seller Financing Contract for a commercial warehouse property in Copenhagen, with a 30% down payment and the remaining balance to be paid over 10 years starting March 2025, including quarterly payments and default provisions if payments are missed.

What is a Seller Financing Contract?

The Seller Financing Contract is utilized when traditional bank financing is either not preferred or not available for a property transaction in Denmark. This document serves as both a purchase agreement and a financing arrangement, typically used in situations where sellers are willing to accept periodic payments instead of a lump sum payment for their property. The contract must comply with Danish property law, the Danish Contracts Act, and relevant financial regulations. It includes detailed terms about the property transfer, financing conditions, security arrangements, and payment obligations. The document is particularly relevant in situations where buyers seek alternative financing options or when sellers want to generate ongoing income from the property sale. The agreement must be structured to protect both parties' interests while ensuring enforceability under Danish law.

What sections should be included in a Seller Financing Contract?

1. Parties: Identification of the seller (financier) and buyer (borrower), including full legal names, addresses, and registration numbers if applicable

2. Background: Context of the transaction, including the seller's ownership of the property and the buyer's desire to purchase with seller financing

3. Definitions: Key terms used throughout the agreement, including Property, Purchase Price, Loan Amount, Interest Rate, and Payment Terms

4. Property Description: Detailed description of the property being sold, including address, land registry details, and property identification numbers

5. Purchase Price and Financing Terms: Total purchase price, down payment, loan amount, interest rate, and amortization schedule

6. Payment Terms: Details of payment frequency, method of payment, and consequences of late or missed payments

7. Security Arrangements: Description of the mortgage or other security interests being granted to the seller

8. Title Transfer: Process and timing of property title transfer and registration requirements

9. Representations and Warranties: Statements of fact and promises made by both parties regarding their capacity, authority, and the property's condition

10. Insurance and Maintenance: Requirements for property insurance and maintenance obligations of the buyer

11. Default and Remedies: Definition of default events and the seller's remedies, including foreclosure rights

12. Costs and Taxes: Allocation of transaction costs, registration fees, and ongoing property taxes

13. Governing Law and Jurisdiction: Confirmation of Danish law application and jurisdiction for disputes

14. Notices: Process for formal communications between parties

15. Signatures: Execution blocks for all parties and witnesses if required

What sections are optional to include in a Seller Financing Contract?

1. Early Repayment: Terms for early loan repayment, including any penalties or fees, optional if early repayment is permitted

2. Property Use Restrictions: Specific restrictions on property use or modifications, needed if seller wants to maintain certain controls

3. Third-Party Rights: Recognition of any third-party rights or restrictions, needed if applicable

4. Assignment and Transfer: Rights to assign or transfer the contract, optional if parties want to restrict these rights

5. Due Diligence Results: Reference to property inspection results and identified issues, needed if specific issues were found

6. Consumer Protection Provisions: Additional protections required when buyer is a consumer, needed if buyer is not a business entity

7. Property Management: Specific requirements for property management during the financing period, needed for commercial properties

8. Environmental Provisions: Environmental responsibilities and liabilities, needed for properties with environmental concerns

What schedules should be included in a Seller Financing Contract?

1. Property Details: Detailed property description, including plans, boundaries, and included fixtures

2. Payment Schedule: Detailed amortization table showing payment dates, amounts, and interest calculations

3. Property Condition Report: Current condition assessment and any identified defects or issues

4. Title Documentation: Copies of relevant title documents and registration details

5. Insurance Requirements: Detailed insurance specifications and minimum coverage requirements

6. Property Maintenance Standards: Specific maintenance and upkeep requirements

7. Due Diligence Reports: Technical, environmental, or other property assessment reports

8. Existing Encumbrances: List of any existing mortgages, easements, or other encumbrances

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Real Estate

Property Development

Commercial Property

Residential Property

Agriculture

Retail

Industrial

Hospitality

Office Space

Mixed-Use Development

Relevant Teams

Legal

Finance

Real Estate

Risk Management

Compliance

Business Development

Property Management

Investment

Operations

Commercial

Relevant Roles

Real Estate Attorney

Property Lawyer

Financial Manager

Real Estate Manager

Commercial Director

Property Developer

Investment Manager

Legal Counsel

Finance Director

Risk Manager

Contract Manager

Real Estate Agent

Property Portfolio Manager

Business Development Manager

Compliance Officer

Industries
Danish Contracts Act (Aftaleloven): Fundamental law governing contract formation, validity, and enforcement in Denmark. Essential for establishing the basic contractual framework of the seller financing agreement.
Danish Credit Agreements Act (Kreditaftaleloven): Regulates credit agreements and financial arrangements, including seller financing. Sets requirements for interest rates, payment terms, and disclosure obligations.
Danish Property Formation Act (Udstykningsloven): Governs the registration and transfer of real property in Denmark, crucial for documenting the property transfer aspect of the seller financing arrangement.
Danish Registration of Property Act (Tinglysningsloven): Regulates the registration of property rights and mortgages, essential for securing the seller's interest in the financed property.
Danish Interest Act (Renteloven): Governs interest rates and late payment penalties, crucial for defining the financial terms of the seller financing arrangement.
Danish Mortgage-Credit Loans Act (Realkreditloven): While primarily focused on mortgage institutions, provides relevant framework for property financing arrangements and security interests.
Danish Consumer Protection Act (Forbrugeraftaleloven): Applies when the buyer is a consumer, providing additional protection and requirements for the financing agreement.
Danish Money Laundering Act (Hvidvaskloven): Relevant for compliance with anti-money laundering requirements in financial transactions, including seller financing arrangements.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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