Home buyers meeting and negotiating terms

Understanding Riders in Real Estate Purchases and Sale

Detroit Legal Group PLLC June 4, 2024

Real estate transactions are a complex process, especially for first-time buyers. One aspect that often causes confusion is the concept of riders in real estate purchase and sale agreements.  

At Detroit Legal Group PLLC, we aim to demystify these terms and guide you through every step of your real estate journey. Our team, led by Ryan Hill and Colemon Potts, has extensive experience in real estate law and is committed to protecting your interests throughout the buying or selling process. 

The Role and Legal Significance of Riders

Riders, also known as addendums or amendments, are additional documents attached to the main purchase and sale (P&S) agreement. Riders serve to modify or add specific terms and conditions to the original contract, offering flexibility and customization for both buyers and sellers. Riders are legally binding and hold significant weight in resolving disputes that may arise during the transaction. 

The primary purpose of riders is to address specific needs or concerns of either the buyer or the seller. They provide a way to include customized terms and conditions without altering the main body of the contract. This can range from financing contingencies to home inspection requirements, ensuring that both parties are fully protected and understand their obligations.

In legal disputes, the terms outlined in the rider can be pivotal, as they clearly articulate the agreed-upon modifications and additions to the original contract. 

Types of Clauses Included in Riders

Riders can encompass a wide range of clauses, tailored to address various aspects of the real estate transaction. Common types include: 

  • Financing contingency: Specifies that the sale is contingent upon the buyer obtaining financing. 

  • Inspection contingency: Allows the buyer to have the property inspected and request repairs or negotiate terms based on the inspection results. 

  • Appraisal contingency: The property must appraise for at least the purchase price, or the buyer can renegotiate or withdraw. 

  • Sale of current home contingency: States that the purchase is dependent on the buyer selling their current home. 

  • Closing date adjustments: Modifies the original closing date to accommodate both parties' schedules. 

  • Personal property inclusions/exclusions: Lists items that will remain with the property or be removed by the seller. 

Provisions That Can Be Included in Riders

When drafting or reviewing riders, your attorney might include different types of provisions. They may incorporate deadlines, which are specific timelines for completing inspections, securing financing, or resolving title issues.  

Repairs could also be conditions requiring the seller to make certain repairs before closing. An attorney may add disclosures, involving requirements for the seller to provide additional information about the property's condition. They could even include penalties that outline the consequences for failing to meet specific terms of the agreement.  

This flexibility highlights the value of including a rider, as well as the importance of engaging a skilled real estate attorney who can assist with your transaction and provide the utmost legal protection of your interests.   

Best Practices for Drafting and Negotiating Riders

To serve the interests of both parties effectively, consider the following best practices when dealing with riders: 

  • Clear and precise language: Use unambiguous language to avoid misinterpretation. 

  • Mutual agreement: Make sure that all parties agree to the terms before including them in the rider. 

  • Legal review: Have an attorney review the rider to confirm it adheres to legal standards and protects your interests. 

  • Documentation: Keep thorough records of all communications and changes agreed upon in the rider. 

  • Timely execution: Sign and incorporate the rider into the main contract promptly to avoid delays in the transaction. 

Specific Considerations for Michigan Residents

Michigan residents should be aware of particular state-specific details when drafting or signing riders. For instance: 

  • Land contract provisions: Michigan law has unique provisions for land contracts, which should be carefully addressed in riders if applicable. 

  • Title issues: Ensure that any title issues are resolved and documented in the rider, as Michigan requires clear title for transactions. 

  • Environmental regulations: Be mindful of local environmental regulations and disclosures that may need to be included in the rider. 


Can riders be negotiated? 

Yes, riders are typically negotiated between the buyer, seller, and their respective legal representatives. The negotiation process involves discussing the specific terms and conditions outlined in the rider, which may include contingencies, warranties, deadlines, and other provisions that can affect the overall transaction.

By negotiating these terms, all parties aim to protect their interests and find a balanced agreement that satisfies both the buyer's and seller's requirements. This collaborative approach helps in addressing any concerns or special conditions that may arise, ultimately leading to a smoother and more transparent transaction process. 

What happens if a condition in a rider is not met? 

If a condition outlined in a rider is not met, it can lead to several potential outcomes. The most severe consequence is the termination of the contract, which means that the agreement between the parties is nullified, and any obligations or benefits outlined in the contract are no longer enforceable.  

Alternatively, the parties involved may choose to renegotiate the terms of the contract to address the unmet condition. This could involve modifying the original terms to better fit the current circumstances or adding new conditions to ensure both parties are satisfied. In some cases, failure to meet a condition might also result in penalties or fines, depending on the specific stipulations of the rider.  

Ultimately, the exact repercussions will depend on the language and provisions outlined in the original contract and rider. 

How can I ensure my interests are protected in a real estate transaction?

Engaging a qualified legal team, such as Detroit Legal Group PLLC, can help safeguard your interests throughout the transaction process. They can assist with thorough contract reviews, confirming that all terms and conditions are fair and clearly defined.  

Moreover, they can conduct due diligence, verifying property titles and uncovering any potential legal issues or liens. A legal team will also negotiate on your behalf, aiming to secure the best possible terms and addressing any disputes that may arise. They will facilitate compliance with local laws and regulations, providing peace of mind that your real estate transaction is handled professionally and securely. 

By understanding the purpose and significance of riders, employing best practices, and seeking legal advice, Michigan residents can navigate real estate agreements more effectively. 

The Role of a Lawyer in Real Estate Transactions

At Detroit Legal Group PLLC, we are dedicated to providing comprehensive legal support to our clients, ensuring their real estate transactions are smooth and successful. Engaging a lawyer in the process of drafting and reviewing riders can be invaluable. A lawyer can: 

  • Interpret legal jargon: Help parties understand complex legal terms and implications. 

  • Ensure compliance: Verify that the rider complies with Michigan laws and regulations. 

  • Negotiate terms: Assist in negotiating fair and equitable terms for both parties. 

  • Prevent disputes: Identify potential issues that could lead to disputes and suggest preventative measures. 

For your real estate legal matters, contact Detroit Legal Group PLLC today. Our experienced team is here to support you in every aspect of your real estate journey, providing the guidance and protection you need to make informed decisions.  

Reach out to us to schedule a consultation and learn more about how we can assist you with your real estate transactions in Detroit, Dearborn, Southfield, and Warren, Michigan.