Finance contingency clauses in contracts of sale.

Generally, all purchasers of cooperative or condominium apartments need to obtain a loan to conclude their purchase. To protect the purchaser, the contract should contain a clause called the "finance contingency" clause, which provides that in the event the purchaser does not obtain a written loan commitment from a lender within a certain time period, the purchaser or the seller has the right to cancel the contract with a refund of the down payment.

This article will explore the issues for both purchasers and sellers in connection with the finance contingency clause.

The Finance Contingency Clause

The accepted practice amongst attorneys in the industry is to use the B