Who can terminate a contract?

Once a purchase contract, a contract to lease or a lease agreement is signed, it becomes a legal, binding document that if one of the parties’ defaults on their obligations, as stated on the agreement, may result on monetary loss or legal implications. Either way, it could be costly.

The only options to terminate a fully executed contract without penalty are:

1. By mutual agreement
2. According to contingencies on the contract that after having exercised due diligent effort could not be met.

Contingencies

Are clauses that allow either party, but usually the Buyer or the Tenant, to terminate the contract without monetary risk or penalty if these contingencies are not met. Some of these contingencies are already included and made part of the contract, others need to be clearly spelled out at the time the contract is prepared.

Purchase Contracts:

1. Inspections
2. Mortgage Denied
3. Cloud in Title
4. Appraisal valuation
5. Sale of another property
6. Subject to viewing the property
7. Attorney’s approval
8. Condo Documents

Contract to Lease

1. Unusual provisions or conditions on the lease
2. Lease execution beyond due date
3. Credit check

Lease

1. Approval of Condo Association
2. Required repairs or conditions not met

Notice that the options to cancel a lease without penalty once executed are very limited.