How Does a Contract Rider for NYC Real Estate Work?
What exactly is a contract rider for a real estate deal in New York City? Does the contract rider supersede the main purchase contract? We’ll discuss everything you need to know about the contract rider for real estate transactions in NYC and show you sample cover letters and contract riders.
What Is a Contract Rider in NYC?
A contract rider is a separate document from the contract of sale which addresses the specific nuances of a real estate transaction.
Please keep in mind that most real estate attorneys do not mark up the contract of sale which is often a template from official sources such as the Committee on Real Property Law of the Association of the Bar of the City of New York. Instead, the seller’s attorney will typically send a separate contract rider for the seller and the buyer’s attorney will send a separate contract rider for the buyer. Both of these contract riders are negotiated and will be part of any fully executed purchase contract.
In fact, most of these standard contracts of sale will have a disclaimer about just how general these contracts can be:
Note: This form is intended to deal with matters common to most transactions involving the sale of a condominium unit. Provisions should be added, altered or deleted to suit the circumstances of a particular transaction. No representation is made that this form of contract complies with Section 5–702 of the General Obligations Law (“Plain Language Law”).
Pro Tip: Did you or your attorney verify the square footage of the apartment you’re about to purchase? If not, make sure to read our guide on how to measure square feet for real estate in NYC. That last thing you’ll want is to be bamboozled into thinking you’re buying more space than in reality. You don’t want to be the classic remorseful buyer!
Does the Contract Rider Override the Purchase Contract?
Yes. In the event of any inconsistencies between the main purchase contract and the contract rider, the contract rider will always govern. This is typically indicated in the first bullet point of a contract rider.
Remember that the contract review and negotiation period is just that, a time for the attorneys to negotiate a deal that works for both respective parties. That means all of the points in the contract rider are subject to negotiation and agreement.
The Contract Rider is Negotiable
For example, you’ll see in our sample contract rider for a seller below that the seller’s attorney has asked for a monetary reimbursement if the closing takes place outside of Manhattan. You’ll also see a request for the buyer to cover the seller’s carrying costs if closing doesn’t take place within 60 days of a contract being fully executed. Just remember that these are all negotiable points that the buyer’s attorney may push back on!
Pro Tip: If you haven’t found the right attorney yet, make sure to read our guide on the right questions to ask your attorney before you hire them. Then, check out our article on average and typical real estate lawyer fees in NYC.
Cover Letter for Contract Rider
This is a hypothetical cover letter from a seller’s attorney to a buyer’s attorney. This will typically be sent via email either as an attachment or in the body of the email. This email will typically also attach a Lead Paint Disclosure Statement, a standard contract of sale and the seller’s rider to the contract.
Dear Counsel,
Enclosed herewith please find one set of Contract of Sale and Rider to Contract of Sale for your review and comment.
Should you have any proposed amendment or comments, please do call this office for discussion.
If you find the Contract and Rider acceptable, please kindly make three additional sets and have your client sign same and return them to me along with the Contract Deposit Check payable to “NYC Real Estate Attorney Services, LLP as Escrowee” in amount of $150,000.
Note that, as is customary, the attached draft shall not be binding on the Seller until a contract is returned to you executed by such seller.
Pro Tip: Make sure you understand the difference between a final walk-through for a re-sale vs a punch list walkthrough when buying a new condo conversion or new construction home in NYC. If your buyer’s broker can’t explain the difference to you, it’s time to get rid of your real estate agent and work with one of our seasoned buyer’s brokers who will not only give you great advice, but will also give you a discreet closing credit worth $20,000 or more against your closing costs!
Read the Full Article: https://www.hauseit.com/contract-rider-nyc-real-estate-explained/
Disclosure: Hauseit (https://www.hauseit.com) and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. The services marketed on Hauseit.com are provided by licensed real estate brokers and other third party professional service providers. Hauseit LLC is not a licensed real estate broker nor a member of any multiple listing service (MLS).
