A waiver is a legal document through which a party voluntarily relinquishes a known right, claim, or privilege. The purpose of a waiver can vary, but it generally involves one party agreeing not to enforce a right that could potentially disrupt a real estate transaction or investment project.
Here are a few ways in which waivers might be used in real estate investments:
- Due Diligence Waiver: An investor might sign a waiver indicating that they have decided to forego certain due diligence activities before purchasing a property. This could be used to expedite a deal, but it carries increased risk.
- Contingency Waiver: Real estate contracts often contain contingencies that give the buyer the right to back out of a contract if certain conditions aren’t met. A buyer might waive these contingencies to make their offer more attractive to the seller.
- Liability Waiver: An investor might require contractors or visitors to sign a waiver to prevent them from holding the investor liable for any injuries or accidents that occur on the property.
- Zoning and Compliance Waivers: Sometimes, real estate investors may obtain waivers from local governments or regulatory bodies that exempt them from certain zoning laws or regulations for their investment property.
- Right of First Refusal Waiver: In a situation where an individual or entity has the right of first refusal on a property, they may waive this right, allowing the owner to sell the property to someone else.
In any case, the use of waivers is a strategic decision in real estate investments that can affect the rights and obligations of the parties involved. It’s generally advisable to consult with a real estate attorney before signing a waiver, as it can have significant legal implications.