Real Estate Acquisition Financing from the Lender s Perspective

Transcription

1 Real Estate Acquisition Financing from the Lender s Perspective D. James Papadimitriou February 23, 2016

2 I. Due diligence 2 Type of acquisition (assets/shares) Reports of the borrower/buyer Title / Existing charges Off-titles Litigation/movable securities (applicable jurisdictions) Environment/Notice of contamination Physical condition Zoning Survey/Certificate of Location Reliance Letters

3 Due diligence (continued) 3 Review of the acquisition documents Buyer s identity (non-residents) Representations and warranties/survival period/withholdings Seller s disclosures with restrictions on the recourses of the buyer (monetary/deductible) Competition Act ($86M) and other consents Assignability of the purchase and sale agreement Separate agreements for the transfer of certain properties

4 II. Acquisition of Shares 4 Nominee/active company Due diligence of the buyer (working relationships, environment, tax debt) and representations of the seller Purchase prise allocation Taking of securities by the nominee and the beneficial owner (authorization by the nominee s Board of Directors prior to the sale and the lender s hypothec)

5 II. Acquisition of shares (continued) 5 Hypothec on the buyer s rights in the purchase and sale agreement Importance of title insurance policies with GAP endorsements (no registration of the deed of sale) Anti-avoidance rule Review of the off-title transfer Disbursements under escrow for asset acquisitions

6 III. Loan Assumption 6 Taking/Transfer of securities No express novation No cross defaults

7 IV. Estoppels/Head Lease 7 Addressed to the buyer and the hypothecary creditor Date of the estoppel certificates Buyer s certificate in lieu of missing estoppels Claims disclosed in the estoppel Head lease the buyer becomes a lessee Verify the term, the release mechanism of the lessee-buyer

8 8 V. Escrow Agreements Attorneys of the buyer/seller Payment of prepayment penalties in case of non-disbursement Correction of adverse entries Electronic registrations

9 9 Members of our team: D. James Papadimitriou (514) Sébastien Thomas (514) Marie-Josée Marcoux (514) Valérie Mac-Seing (514) Annie Gagnon-Larocque (514) Charles Flicker (514) Mary Pagonis (514)

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