Key Clauses to Consider in Real Estate Contracts (2025 Updated Guide)

Real estate contracts are crucial legal documents that protect the rights of all parties involved in property transactions, including buying, selling, and renting. However, poorly drafted contracts can lead to legal disputes, financial losses, and misunderstandings. So, what key clauses should be included in a real estate contract? Here is our 2025 updated guide:

1. What Is a Real Estate Contract and Why Is It Important?

📌 A real estate contract is a legally binding agreement that outlines the terms of property transactions, ensuring the rights of all parties are protected.

✅ Legal Protection: Defines the rights and obligations of each party, preventing potential disputes.

✅ Financial Security: Clarifies payment terms, penalties, and handover procedures.

✅ Supported by Official Documents: Strengthened with title deeds, appraisal reports, and lease agreements.

📌 Example: A poorly drafted lease contract can lead to eviction issues or delayed rent payments between landlords and tenants.

2. Types of Real Estate Contracts

📌 Real estate contracts vary depending on the type of transaction. Here are the most common ones:

✔ Sale Contract: A formal agreement between the buyer and seller detailing the transfer of ownership.

✔ Lease Agreement: Specifies the rental terms, payment schedule, and conditions for termination.

✔ Pre-Sale Agreement: A future sale commitment requiring notarization.

✔ Construction-for-Land Agreement: An agreement between a landowner and a developer, defining the share allocation.

✔ Title Transfer Promise Agreement: Guarantees the transfer of property ownership at a specified date.

3. Essential Clauses in Real Estate Contracts

📌 Key clauses that must be included in a real estate contract:

✅ Identifying the Parties:

• Full names, national identification numbers, and addresses of the buyer, seller, tenant, or developer.

• Tax ID and passport details for foreign buyers.

✅ Property Description:

• Full details of the property, including title deed information, plot number, and square meters.

• Current physical condition and intended use.

✅ Payment and Pricing Terms:

• Clear statements on the sales price, payment schedule, and bank transfer details.

• For lease agreements, deposit amount and rent increase rates must be specified.

✅ Penalty Clauses:

• Conditions outlining penalties for non-compliance, delays, or breaches.

• Payment delays, delivery deadlines, and eviction terms should be explicitly mentioned.

✅ Title Deed and Ownership Transfer:

• The transfer date, required documents, and necessity of notarization should be outlined.

✅ Tax and Fee Responsibilities:

• Defines which party will pay the applicable taxes and fees (title deed fee, stamp duty, etc.).

📌 Example: A Title Transfer Promise Agreement must be notarized. If not notarized, it is considered legally invalid!

4. Legal Risks to Watch Out for in Contracts

📌 Incorrect or incomplete contracts can cause significant financial losses. Here are the most common legal risks:

✅ Incorrect or Misleading Information:

• A wrong square meter declaration can lead to financial disputes.

• Ensure the title deed has no mortgage or legal encumbrances.

✅ Unclear Delivery Deadlines:

• Particularly in off-plan projects, unclear delivery schedules may cause long delays.

✅ Rent Increase and Eviction Terms:

• Lease agreements should clearly define rent adjustment rates based on inflation and the eviction process.

📌 Example: If a lease contract lacks an eviction clause, landlords may struggle to remove tenants legally.

5. How to Draft a Secure Real Estate Contract

✅ Opt for Notarized Contracts:

• Notarized agreements offer stronger legal protection.

✅ Consult the Land Registry and Municipality:

• Before buying or leasing, verify the property’s zoning status, occupancy permit, and tax liabilities.

✅ Seek Legal or Real Estate Expert Advice:

• For complex contracts, hiring a real estate lawyer or consultant ensures maximum security.

📌 Example: In Construction-for-Land Agreements, legal consultation is crucial to avoid property rights disputes.

Conclusion: How to Ensure a Secure Real Estate Contract?

✅ Include complete and accurate identity information of all parties.

✅ Specify property details, title deed records, and usage conditions.

✅ Clearly outline payment terms, penalty clauses, and eviction rules.

✅ Notarize agreements to provide legal protection.

✅ Consult a real estate lawyer or expert for additional security.

📌 For the latest insights on real estate contracts, follow the Tuna Project Blog! 🚀