Commercial Real Estate Non-Disclosure Agreement (NDA)
The commercial real estate non-disclosure agreement is used when the owner of commercial real estate discloses information about a property to potential buyers, tenants, consultants, investors or business partners. The information may have to do with property revenue, taxes, marketing plans, planned capital improvements, the identity or financial status of investors or partners, or other confidential information that provides the owners with an advantage over similar property owners. Note, if you use a non-disclosure agreement with one party, you should use it for all people to whom you disclose similar information. Otherwise, someone who signed a non-disclosure might argue that you didn’t consistently treat the information as being confidential.
Landlord Tenant NDA – To inform a tenant about the property of the landlord with the condition that any details transferred are meant to be kept in secrecy.
Real Estate Buyer NDA – Tailored specifically to a buyer and seller to keep the information of the property in private.
COMMERCIAL REAL ESTATE NDA (CONFIDENTIALITY)
This commercial real estate non-disclosure agreement (the “Agreement”) is made between _________________ (the “Disclosing Party”) and _________________ (the “Receiving Party”) and is effective _________________. The parties agree as follows:
The Agreement is intended to prevent the unauthorized disclosure of Confidential Information (as defined below) regarding the commercial real estate of Disclosing Party, specifically the property located at _________________ (the “Property”).
“Confidential Information” is proprietary information relating to the Property including but not limited to: revenue, taxes, marketing plans, planned capital improvements, the identity or financial status of investors or partners, or other information conveyed in writing or in discussion that is indicated to be confidential.
Without Disclosing Party’s prior written consent, Receiving Party will not: (a) disclose Confidential Information to any third party; (b) make or permit to be made copies or other reproductions of Confidential Information; or (c) make any commercial use of Confidential Information. Receiving Party will carefully restrict access to Confidential Information to those of its officers, directors and employees who are subject to non-disclosure restrictions at least as protective as those set forth in this Agreement and who clearly need such access to participate on Receiving Party’s behalf in the analysis and negotiation of a business relationship or any contract or agreement with Disclosing Party.
Upon Disclosing Party’s request, Receiving Party shall within thirty days return all original materials provided by Disclosing Party and any copies, notes or other documents in Receiving Party’s possession pertaining to the Property and the Confidential Information.
This agreement does not apply to any information that: (a) was in Receiving Party’s possession or was known to Receiving Party, without an obligation to keep it confidential, before such information was disclosed to Receiving Party by Disclosing Party; (b) is or becomes public knowledge through a source other than Receiving Party and through no fault of Receiving Party; (c) is or becomes lawfully available to Receiving Party from a source other than Disclosing Party; or (d) is disclosed by Receiving Party with Disclosing Party’s prior written approval.
This Agreement and Receiving Party’s duty to hold Confidential Information in confidence shall remain in effect until _________________ or until whichever of the following occurs first: (a) Disclosing Party sends Receiving Party written notice releasing it from this Agreement, or (b) Confidential Information disclosed under this Agreement ceases to be confidential.
This Agreement does not constitute a grant or an intention or commitment to grant any right, title or interest in the Property or the Confidential Information to Receiving Party.
(a) Relationships. Nothing contained in this Agreement shall be deemed to constitute either party a partner, joint venturer or employee of the other party for any purpose.
(b) Severability. If a court finds any provision of this Agreement invalid or unenforceable, the remainder of this Agreement shall be interpreted so as best to effect the intent of the parties.
(c) Integration. This Agreement expresses the complete understanding of the parties with respect to the subject matter and supersedes all prior proposals, agreements, representations and understandings. This Agreement may not be amended except in a writing signed by both parties.
(d) Waiver. The failure to exercise any right provided in this Agreement shall not be a waiver of prior or subsequent rights.
(e) Injunctive Relief. Any misappropriation of Confidential Information in violation of this Agreement may cause Disclosing Party irreparable harm, the amount of which may be difficult to ascertain, and therefore Receiving Party agrees that Disclosing Party shall have the right to apply to a court of competent jurisdiction for an order enjoining any such further misappropriation and for such other relief as Disclosing Party deems appropriate. This right of Disclosing Party is to be in addition to the remedies otherwise available to Disclosing Party.
(f) Attorney Fees and Expenses. In a dispute arising out of or related to this Agreement, the prevailing party shall have the right to collect from the other party its reasonable attorney fees and costs and necessary expenditures.
(g) Governing Law. This Agreement shall be governed in accordance with the laws of the State of _________________.
(h) Jurisdiction. The parties consent to the exclusive jurisdiction and venue of the federal and state courts located in _________________ in any action arising out of or relating to this Agreement. The parties waive any other venue to which either party might be entitled by domicile or otherwise.
(i) Successors & Assigns. This Agreement shall bind each party’s heirs, successors and assigns. Receiving Party may not assign or transfer its rights or obligations under this Agreement without the prior written consent of Disclosing Party. However, no consent is required for an assignment or transfer that occurs: (a) to an entity in which Receiving Party owns more than fifty percent of the assets; or (b) as part of a transfer of all or substantially all of the assets of Receiving Party to any party. Any assignment or transfer in violation of this section shall be void.
_____________________ (Typed or Printed Name)
_____________________ (Typed or Printed Name)
How to Write
EXPLANATION FOR COMMERCIAL REAL ESTATE NDA
Below we provide an explanation for each of the provisions in the Commercial Real Estate Non-Disclosure Agreement.
Fill in your name or company name (you are the disclosing party). Fill in the name of the individual or company considering a commercial transaction (for example, the buyer or tenant) (the Receiving Party). Finally, fill in the date the agreement will take effect. This is often the date that the last party signs the agreement.
This clause identifies the property that is the subject of the transaction between the parties. Fill in the address (or addresses if there is more than one property).
This section defines what is protected against disclosure. Keep in mind that if you are providing documentation, you should designate that information as confidential. If the information is spoken, you should announce the confidentiality.
This clause makes clear that your trade secrets must be kept in confidence by the receiving party and may not be revealed to others without your prior written consent.
The receiving party promises to return materials that you provided. The agreement gives the receiving party 30 days to return the materials, but you can change this time period if you wish.
This provision describes all the types of information that are not covered by the agreement. These exclusions are based on court decisions and state trade secret laws that say these types of information do not qualify for trade secret protection.
This clause provides the receiving party with an expiration date for the agreement. The Agreement should last as long as the information is likely to remain a trade secret. Two to five years is a common period, but it can be much shorter, even as little as six months.
This clause makes clear that you are not granting any ownership rights in the property or the confidential information to the receiving party.
These miscellaneous provisions (sometimes referred to as “boilerplate”) are usually grouped together at the end of an agreement.
(a) Relationships. Most agreements include a provision like this one, disclaiming any relationship other than that defined in the agreement.
(b) Severability. The severability clause provides that if you wind up in a lawsuit over the agreement and a court rules that one part of the agreement is invalid, that part can be cut out and the rest of the agreement will remain valid.
(c) Integration. The integration provision verifies that the version you are signing is the final version, and that neither of you can rely on statements made in the past.
(d) Waiver. This provision states that even if you don’t promptly complain about a violation of the NDA, you still have the right to complain about it later.
(e) Injunctive Relief. An injunction is a court order directing a person to do (or stop doing) something. If someone violated your NDA, you would want a court order directing that person to stop using your secrets.
(f) Attorney Fees and Expenses. If you don’t include an attorney fees clause in your agreement, a judge may (in most states) order the award of attorney fees in cases where the theft of the trade secret was willful and malicious. It’s up to the judge, which makes things unpredictable. You are far better off using an attorney fees provision. However, don’t be surprised if the other party is opposed to the idea. Why? Because it is the receiving party that is usually sued, not vice-versa, and the receiving party may believe that the provision will encourage you to litigate.
(g) Governing Law. You can choose any state’s laws to govern the agreement, though the most logical state for this provision is the state where the property is located.
(h) Jurisdiction. The purpose of adding a jurisdiction provision to an NDA is to get each party to consent in advance to jurisdiction in one county or state and to give up the right to sue or be sued anywhere else. As with the previous provision, the most likely choice is the county in which the property is located.
(i) Successors and Assigns. This provision binds any company that acquires either party.
Signing the agreement. Someone with the necessary authority must sign the agreement on behalf of each party. Each party should sign two copies and keep one. This way, both parties have an original signed agreement.