Access and Indemnity Agreement (Due Diligence) - Enhanced Prompt

You are an expert transactional attorney specializing in commercial real estate. Your task is to draft a comprehensive Property Access and Indemnity Agreement that governs the terms under which a prospective buyer may access and inspect a property during the due diligence phase of a potential transaction.

Context and Purpose

This agreement serves a critical function in commercial real estate transactions by establishing the legal framework for pre-acquisition property access while protecting the property owner from liability. The document must balance the prospective buyer's legitimate need to conduct thorough due diligence with the owner's interest in maintaining control over their property and limiting exposure to claims. Draft this agreement with the understanding that it will be used in a time-sensitive transaction context where both parties need clear, enforceable terms that facilitate the inspection process while allocating risk appropriately.

Document Structure and Required Elements

Header and Parties Section

Begin with a formal document title that clearly identifies this as a Property Access and Indemnity Agreement. Establish the parties with precision, identifying the property owner (referred to as "Owner") and the prospective purchaser (referred to as "Recipient") with their full legal names and, where applicable, their state of organization or residence. Include the effective date of the agreement prominently in the opening paragraph.

Recitals Section

Draft recitals that establish the factual and legal context for the agreement. The first recital should identify the Owner's ownership interest in the property and provide the complete legal description or street address of the property (the "Property"). The second recital should explain that Recipient is evaluating a potential acquisition of the Property and requires access to conduct due diligence investigations. The third recital should state that Owner is willing to grant such access subject to the terms, conditions, and protections set forth in this Agreement. Ensure the recitals flow logically and provide sufficient context for a third party to understand the transaction background.

Grant of Access Provision

Draft a clear and specific grant of access that defines the scope of the license being provided. Specify that Owner grants to Recipient and its authorized representatives, including agents, contractors, consultants, engineers, and employees (collectively, "Recipient's Representatives"), a temporary, revocable, non-exclusive license to enter upon the Property. Clarify that this access is solely for the purpose of conducting due diligence inspections and investigations in connection with Recipient's evaluation of a potential purchase. Include temporal limitations by specifying the duration of the access period, either by reference to a specific date range or by tying it to the term of a purchase and sale agreement. Emphasize that this grant creates only a license and not a leasehold or other property interest.

Permitted Activities and Restrictions

Define with specificity the types of inspections and investigations that Recipient may conduct. Distinguish clearly between non-invasive activities that are permitted as of right (such as visual inspections, Phase I Environmental Site Assessments, property condition assessments, surveys, and architectural measurements) and invasive activities that require Owner's prior written consent (such as Phase II Environmental Site Assessments involving soil borings, groundwater testing, core samples, or any activity that involves penetration of building surfaces or subsurface investigation). Include language requiring Recipient to conduct all activities in compliance with applicable laws and in a manner that does not unreasonably interfere with any tenants' use and occupancy of the Property or Owner's operations.

Notice and Coordination Requirements

Establish clear procedural requirements for property access. Require Recipient to provide Owner with advance written notice of at least a specified number of business hours (typically 24-48 hours) before any entry onto the Property, with such notice to include the date and time of entry, the identity of persons entering, and the nature of the inspection to be conducted. Specify that all entries must occur during normal business hours unless otherwise agreed by Owner in writing. Include provisions requiring Recipient to coordinate with Owner or Owner's property manager and to comply with any reasonable access procedures established by Owner, including sign-in requirements and escort protocols.

Insurance Requirements

Draft comprehensive insurance provisions that adequately protect the Owner. Require Recipient to obtain and maintain, and to cause all Recipient's Representatives to obtain and maintain, Commercial General Liability insurance with minimum limits of not less than a specified amount per occurrence and in the aggregate (typically $1,000,000 to $5,000,000 depending on the property type and value). Specify that such insurance must name Owner and Owner's property manager as additional insureds and must be primary and non-contributory to any insurance carried by Owner. Require Recipient to provide Owner with certificates of insurance evidencing such coverage prior to any entry onto the Property, with such certificates to provide for at least 30 days' prior written notice to Owner in the event of cancellation or material modification. Consider whether to require professional liability insurance for any environmental consultants or engineers.

Indemnification Obligations

Draft a robust indemnification provision that protects Owner from liability arising from the access and inspection activities. Require Recipient to indemnify, defend (with counsel reasonably acceptable to Owner), and hold harmless Owner and its affiliates, partners, members, officers, directors, employees, and agents (collectively, "Owner Indemnitees") from and against any and all claims, demands, causes of action, damages, liabilities, losses, costs, and expenses (including reasonable attorneys' fees and court costs) arising out of, resulting from, or in connection with the entry upon the Property by Recipient or Recipient's Representatives, the conduct of any inspections or investigations, or any breach of this Agreement by Recipient. Specify that this indemnification obligation survives the termination or expiration of the Agreement. Consider whether to include exceptions to the indemnification for pre-existing conditions discovered but not caused by Recipient, while maintaining indemnification for the act of discovery and disclosure itself.

Property Restoration and Repair

Include detailed obligations regarding the restoration of the Property following inspections. Require Recipient to promptly repair, at Recipient's sole cost and expense, any damage to the Property, improvements, landscaping, or personal property caused by Recipient or Recipient's Representatives. Specify that all repairs must restore the Property to substantially the same or better condition as existed immediately prior to entry. Require Recipient to remove all equipment, materials, and debris brought onto the Property and to leave the Property in a clean and orderly condition. Consider including a provision allowing Owner to perform necessary repairs if Recipient fails to do so promptly, with Recipient responsible for reimbursing Owner's costs plus a reasonable administrative fee.

Confidentiality Provisions

Draft confidentiality obligations that protect sensitive information about the Property and the potential transaction. Require Recipient to maintain in strict confidence all non-public information obtained through property access, including information regarding the Property's condition, operations, tenants, financial performance, and any defects or issues discovered. Specify permitted disclosures, such as to Recipient's Representatives who have a need to know and who are bound by similar confidentiality obligations, and as required by law or legal process. Include provisions requiring the return or destruction of all confidential materials if the transaction does not proceed. Consider whether this provision should reference or incorporate a separate non-disclosure agreement if one exists.

Limitation of Owner Representations

Include protective language clarifying that Owner makes no representations or warranties regarding the condition of the Property or the accuracy or completeness of any information provided. State explicitly that Recipient is entering the Property and conducting inspections at its own risk and is responsible for making its own independent investigation and evaluation. Specify that Owner has no obligation to disclose any information regarding the Property except as may be required by applicable law or a separate purchase agreement. This provision helps establish that the access agreement does not create disclosure obligations beyond those in the main transaction documents.

Term and Termination

Define the term of the Agreement and the circumstances under which it may be terminated. Specify that the Agreement commences on the effective date and continues until the earlier of: (1) a specified termination date, (2) the closing of the purchase transaction, (3) termination of the underlying purchase and sale agreement, or (4) termination by either party upon written notice if the other party materially breaches the Agreement and fails to cure within a specified period. Clarify which provisions survive termination, including indemnification, confidentiality, and restoration obligations.

General Provisions

Include standard commercial contract provisions appropriately tailored to this agreement type. Address governing law and jurisdiction, specifying the state whose laws will govern and where disputes must be resolved. Include a provision stating that this Agreement may only be amended in writing signed by both parties. Add a severability clause providing that if any provision is found unenforceable, the remainder of the Agreement continues in effect. Include a provision specifying whether Recipient may assign its rights under this Agreement (typically prohibited without Owner's consent). Add notice provisions specifying how and where notices must be delivered to each party. Include an integration clause stating that this Agreement constitutes the entire agreement regarding property access and supersedes all prior understandings.

Signature Blocks

Conclude with properly formatted signature blocks for both Owner and Recipient. Include signature lines, printed name lines, title lines, and date lines for authorized representatives of each party. If either party is an entity, ensure the signature block reflects proper corporate authority. Consider including acknowledgment language if the agreement will be recorded or if state law requires it for certain provisions to be enforceable.

Drafting Standards and Tone

Draft this agreement in clear, professional legal language appropriate for a commercial real estate transaction. Use defined terms consistently throughout the document. Employ active voice and direct sentence structure where possible while maintaining the precision required for legal enforceability. Ensure that protective provisions favor the Owner (as the party granting access) while remaining commercially reasonable and acceptable to a sophisticated buyer. Strike a balance between comprehensive protection and practical usability—the agreement should be thorough but not so onerous that it impedes legitimate due diligence activities.

Output Format and Specifications

Produce a complete, execution-ready agreement formatted with appropriate headings, section numbering, and professional spacing. Use a traditional contract format with sections clearly delineated. Include bracketed placeholders for party-specific information such as [OWNER NAME], [RECIPIENT NAME], [PROPERTY ADDRESS], [INSURANCE AMOUNT], [NOTICE PERIOD], and [TERMINATION DATE] that can be customized for each transaction. Ensure the document is suitable for immediate use with only the insertion of deal-specific terms. The final agreement should typically be 4-7 pages in length depending on complexity and should be formatted for standard letter-size paper with appropriate margins for binding and execution.