If you are in the real estate market, you may have heard of the attorney review period for real estate contracts. However, you may not know exactly what it is or how it affects your transaction.
What is it?
The New Jersey attorney review period for real estate contracts is three business days. It allows the parties’ attorneys time to review the purchase and sale agreement and negotiate any terms the parties may disagree with. It is normally based on a standard form, which means that it will likely not cover all possible contingencies and it will not be tailored for your transaction.
If, during that review period, either attorney can cancel the purchase and sale agreement, which would cancel the real estate purchase. Cancellations done during the attorney review period do not incur a penalty.
What does it apply to?
It applies to vacant single-family lots and one-to-four family properties, but the purchase and sale agreement must state that it is subject to the review period. It must also state that the agreement will become final unless one of the attorneys disapproves of the agreement within those three business days (the attorney review period).
When does it start?
The clock starts when both parties receive the fully signed contract. Business days do not count Saturdays, Sundays or legal holidays.
What if we want changes?
If you want to make changes to the contract, your attorney must send written notice of disapproval to the other party’s attorney during the review period. It must include the reasons for the disapproval and include the proposed new terms. The other party can then accept those new terms, reject those terms, counter with their own new terms or choose to cancel the contract.