Real Estates Riders
Often referred to as “add-ons” to the main real estate contract, riders are additional documents that are incorporated into and made part of the purchase agreement or lease. Riders can cover a variety of different and detailed circumstances that may require additional attention than is usually included in the main documents. Here, we’ll look at what they are and draw attention to some of the more popular real estate riders used in many transactions.
What Is a Real Estate Rider?
Real estate riders are typically used in residential, commercial and industrial real estate transactions, although they are becoming a more common tool for all kinds of real estate transactions. A rider is a legal document that supplements the terms of a contract, creating additional or distinct provisions related to a property sale or lease. Riders are especially useful when there are additional details or stipulations beyond the generalities spelled out in the original contract.
Types of Riders
Real estate riders can cover a wide range of issues, such as:
- Survey: This rider describes the property’s boundaries and improvements, as per the survey.
- Escrow Agreement: The escrow agreement describes how the closing fees, commissions and other fees will be paid.
- Home Inspection: The purpose of this rider is to define the buyer’s rights to have the property inspected prior to closing.
- Financing: This is used when a buyer will be obtaining a loan to fund part of the purchase and outlines the buyer’s rights and responsibilities as regards the loan.
- Radon: This rider requires the seller to have the home inspected for radon and to make necessary repairs or corrections to any compromised areas.
- Lead-Based Paint: This rider requires the seller to have the home inspected for evidence of lead-based paint and to make necessary repairs or corrections.
- Right of First Refusal: This rider gives a tenant the right to match a third-party’s offer or bid before the landlord is allowed to accept it.
- Pets: This rider defines the rules and regulations which govern pets in the rental property.
Keep in mind that each state and market may have different standard riders and that these are just some of the more common riders to be aware of. For this reason, it is important to do your due diligence and ensure that all of your real estate paperwork is legally binding and appropriate for your specific property.