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Seller Financing Purchase Agreement Template for Pakistan

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Key Requirements PROMPT example:

Seller Financing Purchase Agreement

"I need a Seller Financing Purchase Agreement for a commercial property in Lahore, with a 30% down payment and the remaining amount to be paid over 5 years starting March 2025, including provisions for early repayment without penalties."

Document background
The Seller Financing Purchase Agreement is a specialized legal instrument used in Pakistan when traditional financing through financial institutions is either not preferred or not available. This document is particularly useful for business asset sales, property transactions, or equipment purchases where the seller is willing to accept payments over time while retaining security interest in the asset. The agreement must comply with multiple Pakistani legal frameworks, including the Contract Act 1872, Transfer of Property Act 1882, and relevant financial regulations. It typically includes comprehensive terms covering the sale aspect, financing arrangements, security interests, payment schedules, default provisions, and remedy mechanisms. This type of agreement is increasingly common in Pakistan's business environment, especially in situations where buyers seek alternative financing options or when sellers wish to generate ongoing income through interest payments while gradually transferring asset ownership.
Suggested Sections

1. Parties: Identification of the seller/financier and buyer/borrower with complete legal names and addresses

2. Background: Context of the transaction, including the seller's ownership of the property and buyer's desire to purchase with seller financing

3. Definitions: Key terms used throughout the agreement, including financial terms, property descriptions, and technical terminology

4. Purchase and Sale: Core terms of the sale including property description and purchase price

5. Financing Terms: Details of the financing arrangement including principal amount, interest rate, payment schedule, and term

6. Security Interest: Creation and terms of the security interest in the property until full payment

7. Payment Terms: Detailed payment obligations including installment amounts, due dates, and payment methods

8. Representations and Warranties: Statements of fact by both parties regarding their capacity, authority, and property condition

9. Seller's Rights and Obligations: Duties of the seller including property maintenance until transfer and documentation requirements

10. Buyer's Rights and Obligations: Duties of the buyer including payment obligations and property maintenance after transfer

11. Default and Remedies: Events of default and available remedies including acceleration and foreclosure rights

12. Transfer of Title: Conditions and process for transferring property title

13. Governing Law and Jurisdiction: Specification of Pakistani law as governing law and jurisdiction for disputes

14. Notices: Process and requirements for formal communications between parties

15. General Provisions: Standard clauses including amendments, severability, and entire agreement provisions

Optional Sections

1. Insurance Requirements: Used when specific insurance coverage is required for the property during the financing period

2. Property Management: Include when there are specific requirements for property maintenance or restrictions on modifications

3. Prepayment Terms: Include when early payment is allowed or restricted, with any associated penalties or benefits

4. Co-signer Provisions: Required when a third party is guaranteeing the buyer's obligations

5. Property Use Restrictions: Include when there are limitations on how the property can be used during the financing period

6. Assignment and Transfer: Include when either party needs the right to assign their interests

7. Escrow Arrangements: Used when an escrow agent will be involved in handling payments or documents

8. Tax Responsibilities: Include when there are complex tax arrangements or specific tax obligations to be allocated

Suggested Schedules

1. Schedule A - Property Description: Detailed legal description of the property including boundaries, certificates, and registrations

2. Schedule B - Payment Schedule: Amortization table showing all payment dates, amounts, and interest calculations

3. Schedule C - Property Condition Report: Detailed assessment of property condition at time of agreement

4. Schedule D - Title Documents: Copies of relevant title documents and certificates

5. Schedule E - Permitted Encumbrances: List of any existing liens or encumbrances that will remain on the property

6. Appendix 1 - Registration Requirements: Checklist of documents required for property registration

7. Appendix 2 - Form of Transfer Deed: Template of the transfer deed to be executed upon completion of payments

8. Appendix 3 - Required Insurance Certificates: Forms and requirements for property insurance documentation

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Real Estate

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