Humber Real Estate - Course 4, Module 9: Completing Agreements of Purchase and Sale for Office and Retail Properties|26 questions and answers

If you are unable to address these areas satisfactorily, you may need to conduct a further review with a lawyer or other third-party experts. Note: You may be asked to provide the lawyer (or third-party experts) with a verbal or written summary of the issue to address separately with the client. If after reviewing a commercial agreement of purchase and sale, your client still has areas they don't understand, what should you do? Standard business hours rather than setting the time period over weekends or evenings. For irrevocability periods on Agreements of Purchase and Sale for commercial properties, you would typically adhere to what timeframe? Due to the high value of the deposit, there may be multiple deposits or stages of deposits. Further deposits can be required after conditions have been satisfied (inspections, etc.) or following another specified schedule. A buyer may require these stages in order to arrange appropriate funding. How are deposits in commercial deals handled differently than residential? By using the wording "as otherwise described", and provide the details of multiple deposits and related timing/conditions in Schedule A. If the deposit will be handled in stages, how would you document the deposit on the agreement of purchase and sale? Via certified cheque or e-transfer in trust to the listing brokerage or to the seller's lawyer. In commercial transactions, how are deposits usually paid? Interest-bearing trust account The buyer may request the deposit be placed into an _____________________. This requirement would also be specified in the agreement. - Cleaning equipment - Product displays or showcases - Garment racks - Shelving units - Flower planters - Workstations and chairs - Filing cabinets What are some chattels unique to commercial deals? - Trade fixtures - Built-in cabinets and shelving - Industry-specific equipment, e.g. bartending taps, specialty ovens, etc. What are some fixtures unique to commercial deals? Assumed by the buyer Rental items also need to be identified in the Agreement of Purchase and Sale. Any contracts or leases for rental items that will be ______________________ need to be included in the agreement, with the terms explained clearly. HST, conditions In most situations, the seller of a commercial property is responsible for remitting ______. However, in special circumstances, the seller is not required to collect it provided certain __________________ are met. The company name before the signature of the authorized signing officer(s). Commercial agreements basically have the same requirements for signatures from the parties as residential agreements. However, commercial agreements also include areas to add what? Company name(s) The exact legal ___________________ is used to identify the buyer and seller as at the beginning of the APS. The identification and authority of the individual signing for the entity. Individuals must be authorized to sign on behalf of an entity such as a corporation. When you complete your due diligence in verifying the identification of the entity, you would also verify what? "Per:", "I have the authority to bind the corporation" To sign for a corporation: Under the company name, the authorized individual would indicate they are signing for the company. To do this they add the word _______ before their signature; the corporate seal may also be included, if available, or the words added: __________________________________________. Authorized partner Note: Add "Per" before their signature and their title after it. When signing on behalf of a partnership, the individual signing for the partnership must be the ________________________. No. Only the following is required: The company name comes first, followed by the word "per:" in front of the signature of the authorized individual. Finally, the individual that signed would then write the words "I have the authority to bind the corporation" added below their signature. Is a corporate seal required when a commercial agreement is signed? Conduct a corporate search. How can you verify the existence of a corporation? - Searching title to the property and assessing major assets, existing mortgages and other encumbrances Legal analysis of a property involves what steps? - Income statements - Balance sheets - Rent rolls & leases - Bank statements - Tax bills & returns - Employee records - Detailed information regarding operating costs - Financial records - Lease documents - Inventory of equipment and other assets - Utility bills - Building service contracts - Insurance policies Financial due diligence focuses on the financial health of an income-producing property. This would involve a thorough analysis of what documents? Confidentiality agreement A ________________________________ between seller and buyer may also be required because of the proprietary and personal nature of the information provided in commercial transactions. False. Space to list chattels is already included on the agreement of purchase and sale and does not have to be included as part of a separate schedule. True or false? You would list chattels to be included in the sale on the APS in an attached schedule. A statement by one party of a material fact that is thought to be true, but is later shown to be false. What is an Innocent Misrepresentation? Innocent misrepresentation As a general rule, a buyer would not be able to recover damages in the case of an __________________________________. Checklist, waived or fulfilled Because a commercial agreement of purchase and sale can include several conditions, it's a good idea to maintain a ______________ during the conditional period, so you are aware of which conditions have been __________________________, and which ones are outstanding.