Two main documents are signed by the parties when transferring a property in Bermuda. The first document is a sale and purchase agreement, and the second is a conveyance. A mortgage is also often required. This article focuses on sale and purchase agreements.The sale and purchase agreement sets up the transaction and legally commits the parties to buy and sell. It names the parties to the transaction, sets the price, the deposit and the date when the transaction is to close (usually 28 days later). If there is an agent the commission is stated and the agreement sets out which party is to pay the commission at closing.Generally speaking, an agent drafts and attorneys for the vendor and purchaser finalise the sale and purchase agreement. If there is no agent, the vendor's attorney should prepare the sale and purchase agreement for approval by the purchaser's attorney.Unless the property is a new-build condominium, the sale and purchase agreement often follows the Bermuda Bar Association standard form, which is usually referred to as the “general conditions”. The general conditions are incorporated by reference and are not usually written out in full, in a sale and purchase agreement.The general conditions include terms and provisions such as:n the purchaser is to pay a deposit of ten percent to a stakeholder (usually the agent or vendor's attorney);n the vendor shall give the purchaser good title to the property free of adverse interests (unless they are actually disclosed);n if any furniture or major appliances are included in the sale, the vendor warrants that they are unencumbered;n the vendor has not developed the property in breach of planning laws;n between the date of the sale and purchase agreement and the date of closing the vendor shall insure and maintain the property;n the purchaser's attorney is to prepare the conveyance;n at closing, matters such as land tax, condominium management fees and rents receivable are to be apportioned between the vendor and purchaser;n the rights and remedies of the parties should things go wrong;n costs such as stamp duty and legal fees are to be equally split between the vendor and the purchaser;n the purchaser accepts the property in its physical “as is” condition, on the day the sale and purchase agreement is dated; andn how any notices are to be delivered to the parties.Frequently, the general conditions are amended to protect a purchaser or, for example, if one party is to pay all costs. The amendments are known as “special conditions”, which are added to incorporate the particular terms and provisions agreed by the parties.Special conditions may allow for the purchaser to get bank funding approval, or for the purchaser to obtain satisfactory boundary or physical surveys on the property, or for a non-Bermudian purchaser to obtain a government licence. If such special conditions are not met, the purchaser is not required to close and the deposit is returned.In the event a government licence is required, a special condition should allow for additional time for closing, to allow the licence to be applied for, processed and issued. If any terms and provisions of the sale and purchase agreement are unmet, the purchaser may be able to walk away from the transaction, without being in default.In the event of default, terms and provisions in the sale and purchase agreement can oblige the defaulting party to pay compensation and/or to complete the transaction. A defaulting purchaser may also lose the ten percent deposit, to the vendor.The terms and provisions of a sale and purchase agreement mean it is important for the parties to fully appreciate the implications of signing. The advice of a Bermuda attorney is strongly recommended before a sale and purchase agreement is signed.Attorney Neil Molyneux is a member of the Property Practice Group at Appleby. A copy of this column is available on the firm's website at www.applebyglobal.com.This column should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.