Overview of Our Commercial Sale Service
The dynamics of commercial property sales are complex and layered, interweaving immense financial opportunities with inherent risks. At MBLAW, we recognize these intricacies and align our strategies to safeguard our clients’ interests while optimizing their profit potential.
Harnessing a wealth of experience in real estate law, our team offers inventive and tailored solutions designed to facilitate your commercial real estate transactions. Whether it’s artful negotiation, strategic structuring, securing advantageous financing, or ensuring a smooth closure of the deal, our expertise is at your disposal.
Our approach goes beyond providing legal counsel; we craft comprehensive strategies that strike a balance between risk and reward, fine-tuned to the unique attributes of your commercial sale.
MBLAW serves as your dependable partner in the commercial real estate landscape, delivering the acumen and guidance you need to navigate complex transactions successfully.
Types of Deals in Commercial Sales
MBLAW works with any type of commercial sale transaction. The team’s expansive skill set covers everything from transferring lease documents to working collaboratively with landlords and tenants to guarantee a seamless transition during the sale process.
Commercial Sale Process: A Step-by-Step Guide
Let’s walk through the systematic approach we at MBLAW take for commercial sales. The process, while involved, can be streamlined with our expert guidance, ensuring you meet all necessary deadlines and fulfill all legal obligations.
Contact and Confirmation
After filling out our contact form, our team will confirm our availability to represent you and meet the deadlines specified in your agreement.
Retainer and Commercial Sale Guide
Once we confirm availability, we will send you our retainer agreement and a comprehensive Commercial Sale Guide. This guide lists the documents necessary for us to efficiently process your sale.
To ensure that we have all the necessary information pertaining to your sale, we need you to provide us with the following documents:
- The Agreement of Purchase and Sale, including all amendments and waivers (if any).
- Current property tax bill, along with confirmation of payment.
- Mortgage statement or copy of line of credit statements registered against the property.
- Rental equipment contract or a copy of your Enbridge bill showing the account number and the name of the company through which the equipment is rented.
- Two pieces of ID, specifically a passport and driver’s license.
- If the property is leased and the tenants are to be assumed by the new owner, we need a copy of lease agreements and contact information of the tenants.
- If your property is registered in your corporate name, we require a copy of your company’s articles and a profile report.
After we’ve collected all necessary documents and completed preliminary preparations, we’ll proceed to the document signing phase. This involves you reviewing and signing a variety of legal documents pertaining to the sale. We will provide you with clear explanations of each document to ensure you fully understand every aspect of what you are signing.
On the closing date, we’ll finalize the transaction. This includes completing the final legal paperwork, transferring the property to the new owner, and ensuring all financial aspects of the deal are settled. Rest assured, our team at MBLAW will be on hand to guide you through the closing process, addressing any last-minute questions or concerns you may have.
Commercial Sale: Frequently Asked Questions
One of the key distinctions between commercial and residential real estate lies in the due diligence period. In residential real estate, this period typically ranges from 30 to 45 days, giving the buyer ample time from the agreement’s signing to the requisition date to conduct all necessary searches and request any title defects to be remedied. In contrast, the due diligence period in commercial real estate can span several months, requiring buyers to be mindful that certain due diligence information can only be obtained from government bodies with the vendor’s consent. This consent may extend the lead time for due diligence.
The cap rate is an indicator of the potential return an investor might expect from an income-generating commercial property. This rate is calculated by dividing the property’s Net Operating Income (NOI) – the total income minus operating expenses – by its current market value. For example, if a commercial building valued at $2,000,000 brings in an NOI of $200,000, then the cap rate would be 10%. The larger the cap rate, the greater the investor’s potential return on investment.
Yes, commercial properties in Ontario are indeed subject to HST. Typically, the purchaser is responsible for paying this tax. However, if the purchaser is registered for HST, the vendor might not need to collect this tax. In such a case, both the purchaser and the vendor can make an election under the Excise Tax Act for the transaction to be exempt from HST.
Capital gains tax comes into play when you sell a capital property, like a commercial building, for more than its adjusted cost base – the original purchase price plus any expenses related to the acquisition of the property. In Canada, half of your capital gains, or 50%, must be included as income on your tax return. This is known as the capital gains inclusion rate.
Due diligence in commercial real estate refers to the comprehensive appraisal or investigation of a property before its acquisition. This process includes assessing potential risks, reviewing documents, verifying information, and conducting various inspections. Due diligence is crucial in making informed decisions and mitigating risk in commercial real estate transactions.