Key Considerations When Purchasing Commercial Property

When investing in commercial real estate in Ontario, it’s essential to understand both the legal and practical aspects of the process. Whether you’re acquiring retail space, an industrial building, or an office complex, careful planning and professional guidance can help ensure a smooth transaction.

Due Diligence: Thoroughly investigate the property’s history and condition. Confirm that its intended use complies with local zoning bylaws and regulations. Check for any outstanding liens or encumbrances, and review the title to ensure clear ownership.

Financing and Budgeting: Determine how you will finance the purchase and account for extra costs, such as land transfer tax, property taxes, and potential HST (Harmonized Sales Tax). These costs can significantly impact your overall budget.

Environmental Assessments: Commercial properties may have environmental liabilities. Conduct an environmental site assessment to identify any contamination or remediation requirements. Addressing these issues early can save you from significant expenses down the line.

Leases and Tenancies: If the property includes existing tenants, review lease agreements thoroughly. Verify the terms, rent roll, and any ongoing obligations. Ensure that all tenancies are compliant with Ontario’s legal framework.

Title Insurance and Surveys: An up-to-date survey helps confirm property boundaries and can reveal any encroachments. Title insurance can protect you from unforeseen claims, such as title defects or fraud.

Legal Advice: An experienced real estate lawyer is indispensable. They can draft or review the Agreement of Purchase and Sale, handle closing documentation, and verify compliance with Ontario regulations.

For more details on these key considerations, watch our video here:
Commercial Property Purchases in Ontario

Purchasing a commercial property is a significant undertaking. By conducting thorough due diligence and seeking professional support, you’ll be better positioned to make a confident, informed decision.

Disclaimer: The information provided is for educational purposes only and does not constitute legal advice.