The simplest way to define commercial real estate is property that is used to conduct business activities to generate a profitable gain. This broad definition of commercial property can include anything from office buildings and retail facilities to farmland, garages, and warehouses. Compared to residential real estate, purchasing commercial property tends to be more complex with many factors influencing the transaction process. It is important to understand the steps involved.
Before you begin the process of purchasing commercial property, hiring a real estate lawyer will ensure a smooth and efficient transaction process, from start to finish. Examples of what a lawyer can assist with are (but not limited to) the following:
Agreements of Purchase and Sale
An agreement of purchase and sale is a legally binding written agreement that is utilized by both the buyer and seller in a commercial real estate transaction. The transaction begins when a buyer writes an offer of purchase and submits it to the seller. If the seller accepts, then the agreement of purchase and sale is established. A lawyer will assist you by drafting and negotiating Agreements of Purchase and Sale, offering legal advice where needed.
The following are examples of what is included in an Agreement of Purchase and Sale:
- Property address and legal description
- Offer and closing dates
- Legal names of the buyer(s) and seller(s)
- Offer price and deposit amount
- Conditions related to the sale
Due Diligence of Title Searches
A lawyer ensures proper checks are done to make sure that the property being purchased has a clear and marketable title. As well, the proper title checks will include reviewing everything registered to the property title such as subdivision agreements, right of way agreements, municipal by laws, development agreements and any registered leases.
Harmonized Sales Tax (HST) and Land Transfer Tax
As a buyer, it is important to know and understand the relevant taxes imposed on the purchasing of commercial property. Specifically, Land Transfer Tax is levied by the Province of Ontario against buyers when purchasing real property. Additionally, in the city of Toronto, municipal land tax is collected on all property purchases in Toronto. Buyers are also obligated to pay HST on purchased commercial property, with non-residents of Canada paying a Resident Speculation Tax when buying within Canada.
How We Can Help
At 6ix Estates LLP, whether you are purchasing selling, or refinancing real property, we will not only seek to close your matter efficiently, but we’ll also personally guide you throughout the transaction. We bring extensive experience and professionalism to every transaction and customize our support to your specific needs and concerns. We’re on the pulse of modern technology and have monitored its evolution to inform our own legal approaches – all to give you exceptional timely advice and service.
Contact us today for a free 30-minute no obligation consultation to discuss all your real estate needs.