Everyone who buys their first house is so excited and the last thing on their minds is hiring a lawyer.
When it comes to commercial real estate transactions, that should be one of the first things you think of. While commercial transactions are essentially the same in terms of signing an Agreement and taking possession of new property, your lawyer is going to want to see that Agreement before signing off on the final document.
Issues in a commercial transaction are more complex, and depending on what the purpose of the property is, different searches will be required. Due diligence is enhanced especially when it comes to obtaining title insurance and more time will need be needed to conclude the searches required for corporate purchasers, vendors and lenders.
Some additional searches required for commercial transactions include ensuring that the property is zoned for the use and ensuring there are no open work order or permits for building, electrical and fire. If there are tenants in the building, a review of all commercial and residential leases if it is a multi-use property. These are just a few of the extra steps required for the transaction.
With the addition of enhanced due diligence, financing of a commercial transaction could also be a bit tricky. It’s not the same as a mortgage for a residential property, which usually is pre-approved as commercial transactions quite often involve investors.
Just before you sign that Agreement, get it to the lawyers as they will need to advise if the selected closing date is reasonable and to give them a chance to review the Agreement and highlight anything that you may not be aware of.
Christine Allan, Law Clerk