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TAR Purchase Agreements - Good but not Great?

  • TAR has form commercial real estate purchase agreements that can be very beneficial.

  • While they cover lots of the issues of a sale, they do not provide all the protection you may need.

  • As a result, its always best to hire a real estate attorney to help negotiate your purchase agreement.


If you have purchased commercial property in Texas, you probably know about the Texas Association of Realtors’ (“TAR”) form commercial purchase agreements. If you are unfamiliar, TAR has drafted a number of form purchase agreements to make the purchase process in Texas easier. Two that we deal with regularly are a) the Commercial Contract – Improved Property and b) the Commercial Contract – Unimproved Property.

The TAR agreements are often quite helpful in getting a buyer and seller to agree on contract language. But they are not always the right fit for everyone. In this blog article, I discuss what the benefits of a TAR form are and why you may not want to use one when purchasing a property.

Benefits of the TAR Agreements

As mentioned above, it can be a huge benefit to commercial property investors that TAR has drafted these forms. There are definitely some benefits to them. Specifically, the TAR agreements can be a help because –

  • Basic Terms - They have most of the basic terms that are needed in a purchase agreement. TAR addresses the most common disputed issues in its agreements.

  • Familiarity – Most buyers and sellers and their attorneys are familiar with the TAR agreements. As are the title companies. As a result, you generally know what you are getting when you use the agreement.

  • Missing Pieces – TAR has left blank spaces and blank paragraphs that allow you to update the agreements for any missing pieces that you may want to add.

  • Seller protection – The TAR agreements provide a fair amount of protection to a property Seller.

Because of these benefits, many people are happy with just using the TAR agreements. Its easy, convenient, and you know what you are getting. Having said that, there are some very good reasons why the TAR agreements may not be the best for you.

Why You Want to Use Your Own Purchase Agreement

So now that I have complimented TAR and the form agreements that it has put together, I’ll tell you why you shouldn’t use it – especially if you are a buyer. As mentioned above, the TAR agreement does a solid job of protecting the seller, but as a buyer we recommend more protections.

As a result, we much prefer to draft our own purchase agreements. Our agreements have additional clauses that provide extra protection. Specifically, we often want to add clauses that address the following –

  • Clawback – We want to make sure the buyer is fully protected if there are significant changes in the property prior to – or even after – closing.

  • Clearing title – Our clients are not going to accept any liens on the property prior to close. We want to make sure that is clearly spelled out in the agreement.

  • Seller default protections – The TAR agreements do not have clear enough protections for the buyer if the seller defaults. We add our own.

  • Seller reps and warranties – There are additional reps and warranties that are important for the buyer to get from the Seller.

  • COVID-19 clauses – Unfortunately COVID is here and it affects closings. Accounting for that in the purchase agreement is important.

These are just a sampling of some of the additional protections we think are important for a buyer to have. And it’s the reason we always want to use our own purchase agreement. At the very least, we would want to add riders to the TAR agreement.

What I hope is clear is that the TAR agreements can be very beneficial. But it should not eliminate you hiring a commercial real estate attorney. A good attorney can draft his or her own purchase agreement that provides more protection and coverage than the TAR agreement. So please do not go into a commercial property purchase without an attorney.

If you have any questions, please contact us at 512-614-0335.

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Email: sbukowski@bukowskilawfirm.com
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