You’ve been talking about it for months, maybe years, and now it’s finally time: Your company is ready to buy a commercial property. Having the funds to invest and a promising outlook, however, doesn’t mean you should leap into commercial real estate without seriously exploring properties you’re considering. As our commercial real estate lawyers explain, there are significant issues and traps to be aware of when buying commercial property.


Issue #1: The Quality of the Building

When you begin to search for commercial spaces, consider more than just the square footage and the aesthetics. Once you find a place that ticks those boxes, and you think the building might make a good fit, drill deeper to ensure the construction is sound and there aren’t issues like asbestos in the linoleum, drywall tape or elsewhere, which is common in older buildings.

Recommendation: Once you’re serious about a property, ask local commercial real estate professionals, engineers or commercial real estate lawyers to recommend a properly qualified building inspector or engineer, who can give you a comprehensive picture of any potential building issues, and flag serious structural and building concerns.


Issue #2: The Quality of the Soil

Business owners who fail to look into the quality of the soil often come to regret it. According to environmental law, you would be liable for contaminated soil on the property you’ve purchased even if that contamination occurred before you took possession. Pinning blame and financial responsibility for soil cleanup on previous owners is expensive and risky, and may be futile if the prior owners are gone or cannot be found.

Soil sometimes becomes contaminated by businesses such as:

  • Garages and mechanical shops
  • Gas stations
  • Dry cleaners

Recommendation: Have an environmental consultant or engineer perform an assessment before purchasing a property. Our commercial real estate lawyers also recommend having an environmental assessment both done before and after selling a property. That way you can protect yourself against claims from tenants, neighbours and future owners alleging contamination was caused by you, the seller.


Issue #3: The Risk of Flooding

In many corners of BC, flooding is a real threat every spring. To save your business from the potential stress and losses resulting from flooding—and potential soil slumping—enlist a geotechnical engineer to determine if the property has been exposed to flooding or soil slumpage in the past and evaluate potential future flood risks, especially if it is located near a creek, lake or in a gully.


Issue #4: Historical and Archaeological Assessments

If you are buying a property with plans to develop or redevelop the land , you may need to have a heritage or archaeological assessment performed. In the Kamloops and Interior area, undeveloped land, and even land with long-standing buildings, could have items or areas of heritage significance for First Nations people.

Recommendation:  make your purchase conditional on you receiving a satisfactory report from a qualified archaeologist.  Budget two to three months for these kinds of examinations and reports.  This should give you enough time to address issues and negotiate a solution with the sellers.


Issue #5: Land Use Restrictions

Provincial or local governments have restrictions on the use of the land. The restrictions may be general, such as local government bylaws for zoning, nuisances or site-specific ones which would be registered on the title to the land or in the records of local government or the province. By engaging experienced commercial real estate lawyers to perform a thorough title search and provide full copies of documents registered at the land title office, you will know early on if challenges could arise and have an opportunity to negotiate a solution with the seller or the local government or the province.

This is an especially important consideration when you’re planning to use land for a different use than in the past. For example, if a bakery is there now but you want to open a bar or a marijuana dispensary.


By engaging the kind of lawyer executives trust to handle commercial real estate proceedings early on, you move forward writing a contract only after you have uncovered, talked through and negotiated potential problems and have the all-clear! For expertise and guidance at every stage of your commercial real estate purchase, contact our real estate team today.