NGO Asset Purchase and Sale Agreement

What a good one includes

• Detailed descriptions of the assets, including serial numbers, current operational condition, and historical maintenance logs.
• Clear donor compliance clauses that specify which grant financed the assets and any remaining reporting obligations.
• A precise payment schedule and transfer timeline that defines exactly when risk of loss shifts from the seller to the buyer.
• Representations and warranties confirming that the seller holds clear, unencumbered title to the assets and has the legal authority to transfer them.
• A liability waiver protecting the selling NGO from future operational issues once the buyer takes physical possession of the equipment.
• Disclaimers regarding tax-exempt status adjustments or import duty liabilities, particularly for vehicles imported under humanitarian waivers.

Common mistakes to avoid

• Failing to check donor-specific guidelines regarding the disposal or sale of assets, which can trigger funding clawbacks or compliance audits.
• Omitting a clear "as-is, where-is" clause, leaving your NGO vulnerable to costly repair claims if the transferred equipment fails after the sale.
• Neglecting to update the organization's asset register immediately after the sale, which leads to discrepancies during annual financial audits.
• Forgetting to verify if local government taxes or duties must be paid upon sale, particularly for assets initially imported tax-free under NGO status.

Frequently asked questions