If you are buying commercial property, your lawyer can help you draft or revise the sales contract so your rights are fully protected. In addition, your lawyer can review the title evidence – typically, the title insurance commitment – and can look over the closing documents.

If you are selling commercial property, your lawyer can help you with the sales contract, help you order the title insurance commitment and solve any title problems, and either draft or review the deed or other closing papers.

Contracts for the sale or purchase of commercial estate must be in writing. A real estate agreement that consists only of an oral understanding and a handshake will not be enforced by a court. An ancient law called the Statute of Fraud requires that real estate sales contracts be in writing.

A contract does not have to very fancy to be valid. If it describes the property and the price, it usually will be enforceable in court. Obviously, however, it is not a good idea to rely on a bare-bones contract when you purchase commercial real estate. You need much more detail.

Escrow is an arrangement where a third party – such as a title insurance company or a lawyer – holds money or documents and distributes them according to instructions from both parties.

You can, of course, take title in your own name. But you may want to consider forming a corporation or limited liability company (LLC) and putting the legal title in the name of the business entity. This requires more paperwork and a bit more expense, but you limit your personal liability if someone gets hurt on your property.

By limiting personal liability, you decrease the risk that you could lose your other assets such as your home and personal bank accounts if there is a big verdict in favour of an injured person.

Your lawyer can help you decide if putting your commercial real estate into a separate legal entity is the best thing for you to do.


For information on brownfield development and programs in the City of Hamilton, please visit, http://www.city.hamilton.on.ca

Yes, the buyer is always free to accept the risk of a title defect, but should first consult with a lawyer to make sure the risk is minimal. There often are ways to reduce the risk to manageable proportions. For example, the title insurance may be willing to insure over the risk if appropriate affidavits are signed or if money is placed in escrow to cover the risk. In some cases, the seller may be willing to put money in escrow so there are funds on hand to pay off a construction lien if the lien holder goes to court during the statutory period and wins.

Or if there is a boundary line dispute, you as the buyer may decide to buy the property anyway if only a small piece of the property is involved in the dispute. Your reasoning may be that even if you lose the disputed area, the remaining land that you are buying is well worth what you are paying.

Similarly, if there is some problem with the building itself – say, a defective heating and air conditioning system – and the seller is not willing to fix it, you may decide that you are getting such a good deal on the building that you will proceed with the purchase despite the defect.

It is another word for condemnation – the right of the government to take private property for a public purpose, for example, to make way for a road. The Constitution requires the government to pay you fair compensation if it takes your property.