The investment in real estate law in Canada involves exclusivity, restrictions on disposing of property, impacts on timing, key milestones in the acquisition process, the requirement of money transfer, execution procedures, taxes and fees, and other procedural requirements. The key commercial terms in investment are a deposit, timing, employees, warranties of building constructions, and transfer of tax or other financial benefits. Get the best deal for your commercial real estate business through Forum properties commercial property for rent.
To begin with the exclusivity of investment, an oral agreement is often difficult to prove, and, in some provinces, it is not accepted. Therefore, almost all leases start with a written agreement. Such agreements signed by the buyer with the details of the purchase, if agreed by the vendor, becomes the formal agreement of the lease. Once the agreement is finalised the vendor does not get into any other types of lease or mortgage of the property.
It all depends upon the consent and understanding between the landlord and tenant in the matters of restriction on the disposition of property. However, in some provinces there are restrictions like in the Planning Act of Ontario, a disposition is prohibited with some exception. Accordingly, the owner must get the permission of the planning committee before selling or mortgaging or leasing a property for more than 21 years.
Other provinces also have restrictions on the disposition of properties. The Municipal Government Act of Alberta prohibits the registration of an instrument affecting in subdividing a portion of land unless it is permitted by a subdivision authority. Similarly, there is a restriction in several provinces like Quebec, Saskatchewan, British Columbia etc. on the disposition of properties on various grounds and situations.
Under impacts on timing, the commercial purchase agreement includes a due diligence condition for the purchaser to take time and inspect the property. After the inspection, if the purchaser is not satisfied may cancel the purchase. Due diligence period may vary from 30 to 60 days. Due to typical due diligence, many vendors resist providing representations and warranties on various aspects of the property.
The key milestones of buying the properties are important as they determine finalization of the lease. This includes the exchange of documents and transfer of funds which is done in the process of registration. Further, in the execution of procedures, the signed documents are exchanged either original or electronic or scanned. However, in some provinces, electronic or scanned documents are not permitted.
Almost in all the provinces, 5% GST is payable as federal tax along with provincial taxes which vary 5% to 13% in different provinces.