A commercial building is often the main asset of a business. Nonetheless, the acquisition of a building requires the fulfillment of certain formalities. Our business law team specializing in commercial real estate is here to protect your interests and ensure a profitable transaction.
First of all, the notary will have to conduct a rigorous title search to guarantee that there are no irregularities in the chain of title, no charges adversely affecting your building or binding easements published against it. Irregularities can jeopardize the granting of mortgage financing and will certainly be problematic when reselling the building. The notary is therefore responsible for informing you of such irregularities and for explaining to you what could result from those.
If applicable, special attention should be paid to commercial leases in effect at the time of acquisition. These may have been negotiated for several years and you may be required to comply with them and certain conditions contained in these leases could be disadvantageous to you.
Moreover, it is good to know that a building that is used for commercial purposes is subject to the payment of GST and QST. In some cases, it is preferable to create a new company that will only be used to own the building. This strategy allows you to reduce the risk of loss due to financial problems of the operating company and allows you to benefit from the capital gains deduction for this company.