Contingency
A contingency is a condition that must be satisfied before a buyer is obligated to close. In laundromat purchases the usual set covers due-diligence satisfaction, financing approval, landlord consent to the lease assignment, and clear title to the equipment.
Why Contingency Matters in a Laundromat Sale
Contingencies are the buyer's exit and the seller's schedule risk, and the fight is always over scope and duration. A financing contingency with no deadline leaves a seller off the market indefinitely; a diligence contingency worded as satisfaction 'in buyer's sole discretion' is effectively a free option. Landlord consent deserves its own contingency, because it is outside both parties' control and it is the most common cause of delay.
Example
A purchase agreement conditions closing on: completion of diligence within 45 days, SBA loan approval within 60 days, written landlord consent to assignment within 60 days, and delivery of the equipment free of liens. Each has a date, and each has a defined consequence if the date passes.
What to Check
- Give every contingency a date and a defined consequence when the date passes.
- Make landlord consent its own contingency, separate from financing.
- Avoid open-ended 'sole discretion' diligence language if you are the seller.
Where This Comes Up
- Laundromat Purchase Contingencies: Financing, Lease, Diligence, Licenses
- Laundromat Purchase Agreement Explained Clause by Clause
- Landlord Consent When Selling a Laundromat: Start It Early
Related Terms
- LOI (Letter of Intent) — An LOI, or letter of intent
- APA (Asset Purchase Agreement) — An APA, or asset purchase agreement
- Escrow — Escrow is the arrangement in which a neutral third party holds funds and documents and releases them only when the agreed closing conditions are met
- DSCR (Debt Service Coverage Ratio) — DSCR, or debt service coverage ratio
See the full laundromat glossary for all 78 terms.
The Next Step
This page is general information about laundromat transactions, not legal, tax, or investment advice, and not a guarantee of sale price, timing, or financing approval. Verify current rules with your own CPA, attorney, lender, and the relevant state or municipal agency before acting.