Case Studies
On the Waterfront—Maybe
The Problem:
Our client signs an agreement to buy a cottage across the street from the beach. Other cottage properties are right on the waterfront. On searching the title, we find that our client's property has no right-of-way to get to the beach.
Our Approach:
We negotiate with the owners of properties on the waterfront for a right-of-way to the beach.
The Result:
We are able to register the negotiated right-of-way on the title to our client's property, so that even if the waterfront properties are sold, our client's right-of-way is protected.
Environmental Assessment: Who Pays?
The Problem:
Our client signs an agreement to purchase an apartment building. During financing arrangements, the bank insists on a full environmental report on the property. Suddenly, the deal looks prohibitively expensive to our client.
Our Approach:
We first negotiate with the bank to limit the extent of the report to only those factors where there is a reasonable chance of finding something that needs to be cleaned up. Then we negotiate with the seller as to who should pay for the report—and for any clean-up deemed necessary.
The Result:
Our client ends up paying only a fraction of the cost of the report. A minor environmental issue is found, and the seller agrees to pay the cost of the clean-up. Our client is back in business.
Two for the Price of Three
The Problem:
Our client's offer to purchase a triplex is accepted. On searching the title, we find that the property is zoned for a duplex only—the basement unit is illegal. The client is unsure how to proceed—a duplex will not be such a profitable investment.
Our Approach:
We negotiate with the sellers to get them to obtain a minor variance from the local committee of adjustment, making the basement unit legal. The committee requires certain changes to the triplex to permit the variance. The sellers want to close the deal quickly, and these changes will take too much time.
The Result:
We renegotiate the selling price at very favourable terms to our client, even after they pay for the changes required by the rezoning.
Deposit Refundable—Sometimes
The Problem:
Our clients put down a substantial deposit to purchase a condominium. As part of our title search, we ask for a status certificate from the condominium corporation. When we review the certificate, we find that the reserve fund (funds held to cover future repairs) is very low.
Our Approach:
We include a "contingent on satisfactory home inspection" clause in the offer to purchase. When we send out our home inspector, he finds that the roofs of the condominium are 12 years old, so they will need to be replaced in three to five years. The existing reserve fund is too low to cover that cost, which would mean that our clients would have to cover most of it.
The Result:
This finding makes the condominium a very unprofitable purchase. Because of the home inspection clause we included in the agreement, our clients are able to withdraw from the deal without losing their deposit.
Footing the Bill
The Problem:
Our clients want to lease commercial premises. They find a property that's ideally located at a reasonable rent. When we review the lease, we note that tenants are responsible for all property repairs. We send out our inspector, who finds that the heating, ventilation and air-conditioning system will need to be replaced in a couple of years, and that one portion of the building needs major structural repairs.
Our Approach:
We negotiate with the leasing company so that our clients will not be responsible for replacing the HVAC system or for the structural repairs. We also add a clause that the owners will be responsible for any environmental clean-up that might be required in the future.
The Result:
Our clients are saved very substantial repair costs that could have threatened the viability of their business.
There Goes the Neighbourhood
The Problem:
Our clients are negotiating a lease in a new shopping mall. They will be the largest tenant on the premises. When we ask for a list of the other tenants, we find that the second-largest prospective tenant is our clients' biggest competitor.
Our Approach:
We insert a "non-competing tenants" clause into the lease that prevents the leasing company from renting to tenants that are our clients' direct competitors.
The Result:
The leasing company agrees to the clause because our clients will be the largest tenant. Eventually, several tenants in complementary businesses to our clients lease premises in the same mall.
A Growing Concern
The Problem:
Our clients are negotiating a lease in an office building where they anticipate being able to lease more space as their business grows. When we review the terms of the lease, we discover that they would be prevented from expanding because of restrictive clauses in other tenants' leases.
Our Approach:
We negotiate with the owners for removal of the restrictive clauses when the other tenants' leases come up for renewal over the next couple of years.
The Result:
Our clients' business does very well, and they are able to take over two more floors of the building rather than have the expense and disruption of moving to another location.
