Sale And Leaseback Contract Template for United States

A Sale and Leaseback Contract is a complex financial arrangement governed by U.S. federal and state laws, where an owner sells their property to a buyer and simultaneously enters into a lease agreement to continue using the property as a tenant. This transaction type is regulated by various U.S. statutes including the Internal Revenue Code, UCC, and state property laws, requiring careful consideration of tax implications, accounting standards, and legal requirements in the relevant jurisdiction.

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What is a Sale And Leaseback Contract?

The Sale And Leaseback Contract is utilized when organizations seek to unlock capital from their real estate assets while maintaining operational use of the property. This document type, commonly used in U.S. commercial transactions, combines elements of both a purchase agreement and a lease agreement. It must comply with federal tax regulations, state property laws, and accounting standards (particularly ASC 842). The contract typically includes detailed provisions for the sale transaction, lease terms, maintenance obligations, and potential buyback options, making it essential for businesses seeking to optimize their real estate holdings while maintaining operational continuity.

What sections should be included in a Sale And Leaseback Contract?

1. Parties: Identification of seller-lessee and buyer-lessor, including full legal names and addresses

2. Background: Context of the transaction, property description, and purpose of the sale-leaseback arrangement

3. Definitions: Key terms used throughout the agreement including Property, Closing Date, Lease Term, Base Rent, etc.

4. Sale Terms: Purchase price, payment terms, closing conditions, and transfer of title provisions

5. Lease Terms: Rent amount, duration, payment schedule, and basic obligations of both parties

6. Representations and Warranties: Statements of fact by both parties regarding property condition, authority to enter agreement, and compliance with laws

7. Covenants: Ongoing obligations including maintenance, insurance, taxes, and compliance with laws

8. Default and Remedies: Events of default and corresponding remedies for both sale and lease portions

9. Miscellaneous: Standard provisions including notices, governing law, amendments, and severability

What sections are optional to include in a Sale And Leaseback Contract?

1. Environmental Provisions: Additional terms regarding environmental compliance, investigations, and remediation obligations

2. Financing Provisions: Terms related to third-party financing, including lender rights and requirements

3. Purchase Option: Terms allowing lessee to repurchase property, including price determination and exercise conditions

4. Operating Expense Provisions: Detailed allocation of operating expenses between parties

What schedules should be included in a Sale And Leaseback Contract?

1. Schedule A - Property Description: Detailed legal description of the property including boundaries, improvements, and fixtures

2. Schedule B - Rent Schedule: Detailed payment schedule including base rent amounts, payment dates, and any escalations

3. Schedule C - Operating Expense Allocation: Detailed breakdown of responsibility for operating costs between parties

4. Schedule D - Permitted Use: Specific permitted and prohibited uses of the property during lease term

5. Schedule E - Maintenance Responsibilities: Detailed allocation of maintenance and repair obligations between parties

6. Schedule F - Required Insurance: Specific insurance requirements for both parties including coverage types and amounts

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

Jurisdiction

United States

Publisher

Genie AI

Document Type

Sale Agreement

Cost

Free to use

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