Escrow & Title
What is a 'hold harmless' clause in a Pennsylvania real estate contract and why might a seller request one?
AA clause holding harmless the county recorder for errors in recording
BA provision where the buyer agrees to release the seller from liability for specified conditions, risks, or defects disclosed and accepted by the buyer✓ Correct
CA clause holding the escrow agent harmless for disbursing funds per instructions
DA PREC clause protecting licensees from client claims arising from proper disclosure
Explanation
A hold harmless (or indemnification) clause in a Pennsylvania purchase contract may ask the buyer to release the seller from liability for known conditions — such as environmental issues, structural defects, or code violations that are disclosed and reflected in the price. Courts scrutinize these clauses strictly: they must be clear, specific, and reflect genuine arm's-length negotiation.
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Key Terms to Know
Escrow
A neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
State-Specific Concepts
Disclosure Requirements
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