Recommended
More Related Content
Similar to Commercial Property - purchase and sale transactions - Alberta - broker focus
Similar to Commercial Property - purchase and sale transactions - Alberta - broker focus (20)
Recently uploaded
Recently uploaded (20)
Commercial Property - purchase and sale transactions - Alberta - broker focus
- 1. COMMERCIAL PROPERTY Purchase and Sale Transactions Presented by: Peter Collins, Partner
- 2. © Field LLP 2012 SEMINAR OBJECTIVES Learn about: • Major steps in commercial purchase and sale transactions • Critical business points to address • Practical issues 2 20 June 2012
- 3. TOPICS 1. Papering the deal 2. Due Diligence Investigations 3. Financing 4. Environmental 5. Tenants © Field LLP 2012 3 20 June 2012
- 4. Topics, continued 6. Reps and warranties 7. Liability and indemnity 8. Real Property Reports/title insurance 9. Getting to closing 10.After Closing © Field LLP 2012 4 20 June 2012
- 5. PAPERING THE DEAL • Contract Law Refresher • Three main ways to paper a deal © Field LLP 2012 5 20 June 2012
- 6. Contract Law Refresher • Statute of Frauds • Caveat Emptor • Fraud/Misrepresentation • Patent and Latent Defects • “As is” • Entire Agreement © Field LLP 2012 6 20 June 2012
- 7. Three Ways to paper 1. Letter of Intent 2. Short Form Agreement 3. Formal Agreement © Field LLP 2012 7 20 June 2012
- 8. © Field LLP 2012 Letter of Intent • Preliminary – contemplates further document • Binding or non-binding? Or both? • Transition to formal agreement 8 20 June 2012
- 9. © Field LLP 2012 Short Form Agreement • Skips LOI stage • Can function as a stand-alone agreement • Risks arising from short form 9 20 June 2012
- 10. © Field LLP 2012 Formal Agreement • Can be preceded by LOI of short form • Best form of agreement • Negotiation and timing issues • Form of Agreement – AREA form – Custom form 10 20 June 2012
- 11. © Field LLP 2012 DUE DILIGENCE INVESTIGATIONS • Description • Critical for a buyer • Scope of due diligence • Responsibility for due diligence • Cost and disclosure to seller • Condition Precedent in PSA 11 20 June 2012
- 12. © Field LLP 2012 FINANCING • Buyer condition precedent? • Scope of discretion • Lender due diligence • Lender environmental concerns • Timing 12 20 June 2012
- 13. © Field LLP 2012 ENVIRONMENTAL ISSUES • Significant concern in ALL transactions • Lender requirements and indemnities • Phase 1 ESA • Phase 2 ESA • Reps and warranties in PSA • Allocation of Liability • Indemnification 13 20 June 2012
- 14. © Field LLP 2012 TENANTS • Lease reviews as part of due diligence • Affects financing • Estoppel Certificates • Adjustments for op costs, taxes, deposits and prepaid rent 14 20 June 2012
- 15. © Field LLP 2012 REPS AND WARRANTIES • Seller disclosure is the heart of the deal • Due diligence verifies reps & warranties • Categories of R&W: – Corporate – Title and encumbrances – History/knowledge – Nature of operations on property 15 20 June 2012
- 16. R&W, continued • Lease/tenants status • Third party claims • Expropriation, condemnation, work orders • Zoning • Location compliance • Assumed service contracts © Field LLP 2012 16 20 June 2012
- 17. R&W, continued • Condition of chattels, building systems • Canadian Residency © Field LLP 2012 17 20 June 2012
- 18. © Field LLP 2012 LIABILITY • Relation to R&W • Liability period • Deductible/threshold • Notification • Direct vs. Third Party 18 20 June 2012
- 19. © Field LLP 2012 INDEMNITY • Relation to R&W, and liability • Indemnity vs. common law damages • Cap or unlimited 19 20 June 2012
- 20. © Field LLP 2012 REAL PROPERTY REPORTS • Encroachment disclosure • Municipal compliance • Cost • Get them early! 20 20 June 2012
- 21. © Field LLP 2012 TITLE INSURANCE • Title deficiencies • Municipal compliance deficiencies • Gap coverage • Cost 21 20 June 2012
- 22. © Field LLP 2012 GETTING TO CLOSING • Conditions satisfaction/waiver • Closing documents exchange • Financing • Conveyancing/registration • Funds release • Tenant notices 22 20 June 2012
- 23. AFTER CLOSING • Commission payment to realtors/brokers • Title and contract updating • Post-closing deliverables • Track issues back to R&W © Field LLP 2012 23 20 June 2012
- 24. © Field LLP 2012 CLOSING THOUGHTS • Realtor’s role – continuous • Communication is key • Track and monitor dates and progress 24 20 June 2012
- 25. © Field LLP 2012 Questions? 25 20 June 2012