Real estate transaction

How BC law treats it

A contract for the sale of land must be evidenced in writing signed by the party to be charged, unless an exception such as part performance applies (Law and Equity Act, RSBC 1996, c 253, s. 59(3)). The contract of purchase and sale sets the price, deposit, subject conditions, completion, possession and adjustment dates, and what is included. Commercial deals often use a more detailed purchase agreement with representations, warranties and due diligence periods. On completion, the lawyers or notaries register a Form A freehold transfer, and any new mortgage, at the Land Title Office under the Land Title Act, RSBC 1996, c 250. BC uses a Torrens system: the registered owner's title is indefeasible, subject to registered charges and limited statutory exceptions (s. 23). The buyer pays property transfer tax under the Property Transfer Tax Act, RSBC 1996, c 378 when the transfer is registered, generally 1 percent on the first $200,000 of fair market value, 2 percent up to $2 million and 3 percent above, with additional tax on high value residential property and on foreign buyers in specified areas. Caveat emptor (buyer beware) still largely applies. Sellers need not disclose patent defects a reasonable inspection would reveal, but must disclose known latent defects that make the property dangerous or unfit for habitation, and must not misrepresent the property (Cardwell v Perthen, 2007 BCCA 313). Residential buyers of most homes also have a short statutory rescission period under the Property Law Act. The Real Estate Services Act, SBC 2004, c 42 regulates licensees, and BCFSA, which absorbed the Real Estate Council in 2021, oversees them; neither governs the transaction itself.

What it means for your business

For a business, a real estate purchase or sale is often its largest single transaction. The contract determines the risk: subject conditions, deposit terms, environmental and zoning due diligence, tenancy assignments and representations about the building. Because sellers have limited disclosure duties, buyers must investigate title, leases, building condition and environmental status before removing conditions. Choosing between buying the land and buying the shares of the company that owns it also changes tax and liability outcomes. Example: A Delta logistics company agrees to buy a warehouse subject to financing, inspection and environmental review. Its lawyer searches title, reviews registered easements and the existing tenant's lease, and registers the transfer and new mortgage at the Land Title Office on completion, with property transfer tax paid on registration.

Risks and common mistakes

Removing subject conditions before completing title, zoning, environmental and lease due diligence. Relying on the seller to disclose defects that a proper inspection would reveal. Assuming RESA or the realtor's regulator governs the contract terms. Forgetting to budget for property transfer tax and GST on commercial property. Agreeing to a deal by email or verbal promise without a signed written contract.