FAQ
Fees
What do you charge?
For real estate transactions, I normally charge a flat rate, based upon the purchase price of the property. For everything else, my fees are an hourly rate.
What are your typical out of pocket costs on a real estate transaction?
On a purchase, the costs associated with searching title, title insurance, and registration is about $700-900. For a sale, these costs are about $100-250.
Real Estate
If I’m buying a house, when should I see you?
Normally, you won’t see me until you come in to sign the closing documents a few days before closing. Once your Agreement of Purchase and Sale is finalized, your real estate agent will fax a copy of the Agreement to me and that’s all I need to get your file started.
Why do I need a lawyer if I’m buying title insurance?
Most purchases today are going to close with title insurance. Title insurance doesn’t mean that a full title search isn’t done- it is. I still review all the documents on title. Title insurance is used instead of ordering various municipal searches. Anything you’re searching with the City of Ottawa (building permits, zoning, etc) costs money. The main advantage of title insurance is that it saves you money on closing costs.
Can you get the bank to waive my prepayment penalty when I sell my house?
Honestly, no. A lawyer really can’t help you out with this unless the penalty has been miscalculated.
If I’m selling privately, who prepares the Agreement of Purchase and Sale?
The buyer prepares the Agreement. If a prospective buyer is serious about making you an offer on your house, they should see their lawyer within a few days and present you with a formal, written offer.
Do I need a survey?
Yes! Surveys are the only way you have of knowing if there are any encroachments affecting your property. Although title insurance offers survey coverage, you should still try to obtain a survey from the seller if at all possible. Even an old survey is better than nothing.
Business
Intellectual Property
Do I need a trademark?
It depends. If you’re spending money on marketing certain names or phrases in association with your product or service, it may be worthwhile to apply for a trademark. A trademark is the only way of ensuring that you have an exclusive right to the use of a mark in Canada. A trademark can take up to 2 years to be registered through the Intellectual Property Office, so it’s not a fast process.
Buying & Selling
Non-Competition Clauses: What are they and do I need one?
In a purchase agreement, purchasers will often want to negotiate a covenant with the vendor limiting the vendor’s liability to compete with them after closing in a similar business. If you are buying a bakery, you don’t want the vendor opening up shop a few doors down the street after closing. If the vendor will agree to a non-competition covenant on closing, this possibility is eliminated. Non-competition covenants can be useful but, in order to be enforceable, they cannot be overly restrictive. It might be reasonable to restrict the vendor from opening up a similar business for 1 to 5 years following the closing, and for this restriction to operate within a radius of 1 to 5 kilometres surrounding the current business location, depending upon the type of business being sold
What’s involved in buying a business?
If you’re buying an already existing business, you’re probably working with a real estate agent or a business broker. Once an Agreement is finalized, a number of items need to be addressed before closing. If the business is located on leased premises, a consent from the landlord to the assignment of lease will need to be obtained. Your lawyer will confirm that the retail sales tax account and the Workplace Safety and Insurance Board accounts are in good standing. If you’re buying a business through a corporation, this corporation will have to be created. Sometimes, permits and licenses have to be transferred.
Buying a business: What about employees?
It is important to find out whether the business you are buying has any part time or full time employees. If so, you will become liable as a successor employer for obligations to these employees, including salary, vacation pay, unemployment insurance premiums and worker’s compensation premiums. Because of these obligations, and the difficulty of determining the full extent of your obligations as a prospective purchaser, you may not want to retain any employees, and hire your own employees after the purchase transaction is completed. If you are buying a small business, it can be preferable to include a provision in the Agreement which requires the vendor to terminate all employees before closing.
Where do you go for help when you want to sell your business?
You’ve decided to sell your business. What are the options available to you so that you sell quickly at the best price possible? In Ontario, you’ve got three choices: (1) using a real estate agent (usually one specializing in commercial real estate); (2) using a business broker that deals exclusively in the buying and selling of businesses; or (3) doing it yourself through the internet or word-of-mouth. Real estate agents tend to be more plentiful than business brokers so it might be easier to find an agent, particularly if your business is not located in a central area. Business brokers are required to register with the Real Estate Council of Ontario (RECO).
As a seller, you want to be mindful about any listing or representation agreements you sign with an agent or broker, paying particular attention to the rate of commission. Commissions can range from 10-15% of the purchase price. If you’re interested in avoiding any commissions, there are a few websites that are available for people who want to try selling their business on their own (similar to the websites for people who want to sell their homes privately). There are challenges to doing it yourself, such as determining the right valuation for the business, and being careful about keeping information confidential until a reasonable offer is received.
