Skip navigation

What is an Arms Length Transaction?

An arms length transaction is one where both the seller and purchaser act independently of each other and have no relationship to each other. It would be a transaction which is freely arrived at in the open market and unaffected by abnormal pressure or by the absence of normal competitive negotiation.

Sales that could possibly not qualify as arms length transactions would be sales between family members or business partners, foreclosure sales, or an expansion sale where an adjoining property is purchased based solely on location regardless of price.