Hi,

We, Levy Zavet PC (the “Firm”), will be pleased to provide you with our services in connection with the closing of your commercial transaction (e.g. buying, selling and/or financing real estate or other property such as business assets or shares in a company).  This letter contains our standard terms of engagement for your review.  It also confirms our billing procedures, practice regarding potential conflicts and requests certain information we need from you our client in order to ensure an expedient and accurate transaction.

Services and Billing

Our legal fee generally ranges from 0.1% to 0.2% of the size of the transaction (e.g. the sale or purchase price, the size of the financing etc.) for this type of closing but does not include HST and your disbursements such as title insurance, government registration fees, search costs, or Ontario and municipal land transfer taxes, where applicable.  The legal fee will be quoted to you by email sent from the lawyer or clerk on your file. The fee quote emailed to you will be deemed accepted upon us beginning any work on your closing, or on reviewing your documents or instructions, and as pursuant to this retainer.  If prior to us beginning any work, including reviewing your transaction documents, you notify us in writing that you are not retaining our services, we will not charge you for any work or time spent, failing which, we will charge you accordingly.

Depending on your transaction, one of the following standard routine closing services shall by provided as the scope of our Retainer with you:

1. If you are buying commercial real estate, to ensure you get marketable title to the property, subject to any permitted encumbrances pursuant to your purchase agreement, and to assist in the security requirements of any financing as instructed by your lender, if applicable.  If we are to also represent you with respect to any such required financing to complete the purchase, we will attend to the execution by you of the lender’s or the lender’s counsel standard form of security documents and instruments, address any valid requisitions and questions by the lender’s counsel with your help, and address any relevant questions you may have. Where the lender or the lender’s counsel requires that we register or discharge any security, you agree that we assume no liability, and nor are we required to discharge such security or any prior or other security unless we are provided with sufficient funds to completely and without recourse payout such amounts that may be required. In the event we are required to provide any opinions to the lender and/or their counsel, you agree to indemnify us from any claims, recourse, liability, damages, costs, harm or other remedies we may suffer or as may be required from us, now or in the future, known or not known, from such parties that may rely on our opinion and seek indemnity or damages or other remedies from us.
2. If you are selling commercial real estate, to attend to those acceptable requisitions provided by the buyer’s lawyer in order to have them accept title to the property, and to payout from the sale proceeds any requisitioned encumbrances that must be discharged as part of the transaction and to the extent sufficient sale proceeds are available.
3. If you are buying a business, such as the business assets or the shares of a company that owns the business assets, to ensure you get marketable title to the property, subject to any permitted encumbrances pursuant to your purchase agreement, and to assist in the security requirements of any financing as instructed by your lender, if applicable.  If we are to also represent you with respect to any such required financing to complete the purchase, we will attend to the execution by you of the lender’s or the lender’s counsel standard form of security documents and instruments, address any valid requisitions and questions by the lender’s counsel with your help, and address any relevant questions you may have. Where the lender or the lender’s counsel requires that we register or discharge any security, you agree that we assume no liability, and nor are we required to discharge such security or any prior or other security unless we are provided with sufficient funds to completely and without recourse payout such amounts that may be required. In the event we are required to provide any opinions to the lender and/or their counsel, you agree to indemnify us from any claims, recourse, liability, damages, costs, harm or other remedies we may suffer or as may be required from us, now or in the future, known or not known, from such parties that may rely on our opinion and seek indemnity or damages or other remedies from us.
4. If you are selling a business, such as the business assets or the shares of a company that owns the business assets, to attend to those acceptable requisitions provided by the buyer’s lawyer in order to have them accept title to the property, and to payout from the sale proceeds any requisitioned encumbrances that must be discharged as part of the transaction and to the extent sufficient sale proceeds are available.
5. If you are refinancing or procuring additional or new financing to be secured and/or collateralized against any property of yours, such as business assets, life insurance, shares in a company, units in a partnership, real estate, or any personal property such as by way of general security agreements, guarantees, personal or otherwise, or by any other charge, lien, pledge or hypothec, where we act for the borrowers, covenantors (e.g. beneficial owners, shareholders, partners, nominees), and guarantors, or any combination of those parties, we will attend to the execution by such parties (you) of the lender’s or the lender’s counsel standard form of security documents and instruments, address any valid requisitions and questions by the lender’s counsel with your help, and address any relevant questions you may have. Where the lender or the lender’s counsel requires that we register or discharge any security, you agree that we assume no liability, and nor are we required to discharge such security or any prior or other security unless we are provided with sufficient funds to completely and without recourse payout such amounts that may be required. In the event we are required to provide any opinions to the lender and/or their counsel, you agree to indemnify us from any claims, recourse, liability, damages, costs, harm or other remedies we may suffer or as may be required from us, now or in the future, known or not known, from such parties that may rely on our opinion and seek indemnity or damages or other remedies from us.
6. If you are providing any financing to be secured and/or collateralized against any property of the borrowers, covenantors (e.g. beneficial owners, shareholders, partners, nominees), guarantors or indemnifiers, such as their business assets, life insurance, shares in a company, units in a partnership, real estate, or any personal property, and such as by way of general security agreements, guarantees, personal or otherwise, indemnities, loan agreements, promissory notes, or by any other charge, lien, pledge or hypothec, we will attend to the execution by such parties of your standard form of security documents and instruments, address any valid requisitions and questions we or you may have and with your help, and address any relevant questions such parties may have. Where you require that we register or discharge any security, you agree that we assume no liability, and nor are we required to discharge any such other or prior security unless we are provided with sufficient funds to completely and without recourse payout such amounts that may be required. In the event we are required to procure any registrations of security or other instruments (e.g. mortgage charge, PPSA) and/or opinions from such parties and/or their counsel, you agree to indemnify us from any claims, recourse, liability, damages, costs, harm or other remedies we may suffer or as may be required from us, now or in the future, known or not known, from you or such other parties that may rely on such registrations and/or opinions and seek indemnity or damages or other remedies from us.

The fee noted above is in respect of one of our standard routine closing services as scoped above that we typically encounter when completing a commercial transaction such as yours. In the event of complexities, which result in additional work or extra disbursements we shall advise you of the increase in costs.  In particular please note:

If the title to any property involved is defective and additional work is required in order to clear or remedy it, you will be charged for the extra time spent on the file.

In the event that your closing is advanced or postponed for any reason by mutual extension or otherwise, extension fees shall apply at $395.00 plus HST for each instance.

Should you decide to withdraw your retainer prior to closing or your closing does not take place for any reason, you will be charged for all disbursements incurred and a reasonable fee for services rendered, which may be the entire fee amount had the transaction closed.

Please arrange for your financing (e.g. mortgage) instructions to be sent to us at least twelve (12) business days prior to your closing date to ensure that there are no complications to your closing due to delay in receiving mortgage funds.  A fee of $1,495.00 plus HST shall apply if instructions are not received from your lender or their lawyer at least twelve business days prior to closing to accommodate for a rush closing.

We may not at this time ask for an initial retainer to start work as we will deduct all fees from the proceeds received on the day of closing. Due to circumstances beyond our control, on some occasions we are unable to estimate the balance of the funds owing until a day or two before closing and in this situation we would require your cooperation in delivering the funds to our office promptly upon request, by bank wire, in any event at least one day before closing.

Our statement of account and trust ledger will be provided to you after closing once finalized, outlining all your receipts and expenditures. A draft of same will be provided to you as soon as we have all the necessary information to complete it.

Unless otherwise agreed in advance, any services in addition to the closing of this transaction will be charged at our usual hourly rates.  If required, we will be assisted in the performance of certain work by our other lawyers and law clerks whose rates can be higher.

We will provide you with complete, accurate and fair monthly accounts for any work in addition to the closing of this transaction.  We encourage you to promptly raise any questions or comments you have regarding any account.  In return, we ask for payment of our accounts within 7 days of receipt.

IF YOU ARE GETTING ANY FINANCING INCLUDING A MORTGAGE PLEASE MAKE SURE TO PROVIDE THE CONTACT INFO OF YOUR ASSIGNED LEVY ZAVET LAWYER TO THE LENDER OR THEIR LAWYER, AS WE HAVE MANY AMAZING LAWYERS EACH HELPING ALL OUR CLIENTS

Tax Consequences

We will not be providing you with advice on tax issues or consequences related to the closing of this transaction.  Please note that your proposed transaction may have tax consequences.  We encourage you to contact an accounting professional to obtain tax advice.

Business, Financial, Risk, Economics, Building, Zoning Considerations: No Advice or Opinion

We do not provide any advice or opinions, and nor do we conduct any such searches necessary to provide such advice or opinions, on any business, financial, value, pricing, economics, risk, loan to value, appraisal, building or zoning considerations of your transaction and any assets or property involved, including, but not limited to, current and future economic feasibility, operations, uses, construction or development, road widenings, setbacks or how other lawful authorities may influence your intended uses and future plans for the business, its operations and any property involved including intangible assets and real estate. We encourage you to contact other professionals such as appraisers, accountants, actuaries, business consultants, property managers, surveyors, planners and architects to obtain any such advice, opinions, guidance, assurances, surveys and reviewing and advising on any such appraisals, financials, reports, plans and drawings, involved, provided or in public records, such as registered on title.

Title Insurance in Lieu of a Lawyer’s Opinion on Title

Title insurance is not mandatory although for real estate transactions we strongly encourage that you obtain coverage as we will not be providing a title opinion.  Our firm’s policy is to not act on real estate transactions that are not title insured unless agreed to prior to our retainer, and regardless we will not provide you with a title opinion. We will explain to you the various options available to protect your ownership and security interests and the advantages and disadvantages of protecting your interests through title insurance as compared to a lawyer’s opinion on title (which we will not provide). Please be advised that we may be paid an examining counsel fee by the insurer. For more information, please visit Understanding Title insurance | Financial Services Regulatory Authority of Ontario (fsrao.ca).

Important Note: It is your responsibility to notify us of all the residential and non-residential uses or components or of any tenancies (i.e. more than one dwelling unit), and therefore what type of title insurance policy you want.  If your property has other uses such as commercial, farming, agricultural, work-live, office, manufacturing, mineral, recreational, industrial, mixed uses, hotel, multi-residential or more than one dwelling unit, a traditional commercial or multi-residential title insurance policy may not provide adequate coverage and most of the other coverages may be exempt.  This means you may require more endorsements to a traditional multi-residential or commercial title insurance policy.  Please review your title insurance policy and verify the endorsements covered and the exemptions that apply.  You can also change your title insurance policy after it is purchased, including after closing your transaction.

Privacy

The Firm is subject to the Personal Information and Protection Electronic Documents Act (PIPEDA).  You understand that we will be collecting personal information, including your address, telephone number and e-mail.  We will use that information to communicate with third parties on your behalf and will use it to advise you of our services.  However, we can assure you that we will not share this information with anyone without your instructions and will not sell your personal information.

Email Communication:

We are always happy to communicate with you by e-mail.  We find that this saves time and we feel that the use of e-mail fits in with the way most companies and individuals conduct business nowadays. Although we employ electronic and physical protection measures which meet our industry and regulator’s standards, there is a risk of interception of information when communication is exchanged by emails. If you do not wish to use email communication with us, we will employ traditional communication measures (telephone, fax, mail) but additional charges may apply.  Regardless it is incumbent on you to protect any correspondence and communication received by us and we assume no liability in this regard.  You must let us know immediately if you no longer wish to continue to communicate through email.

We have performed a conflicts check of our other clients to see if representing you in this matter would create a conflict of interest.  To the best of our knowledge, there are no conflicts, but please let us know otherwise.

If a conflict arises, we will advise you as soon as we become aware of it and will attempt to resolve it in a manner acceptable to all parties.  If we cannot resolve the conflict, we may be required, under our Rules of Professional Conduct, to withdraw from representing you, the other party, or both, depending on the nature of the conflict.

If the Firm or any of its lawyers have been requested to act for each of you, or more than one party to this transaction, or more than one purchaser, seller, lender, borrower, guarantor, if applicable, in connection with this transaction (the “Transaction”):

1. The Firm has recommended that each of the said parties obtain Independent Legal Advice about jointly retaining the Firm or any of its lawyers in connection with the Transaction;
2. In acting for the said parties, no information received by the Firm or any of its lawyers from either party in connection with the Transaction can be treated as confidential insofar as the other parties are concerned;
3. If a conflict of interest should arise which cannot be reasonably resolved, arbitrated or settled, the Firm or any of its lawyers cannot continue to act for the undersigned, and in such case the Firm or any of its lawyers may have to withdraw completely from the Transaction, however you hereby confirm and agree that, and if allowed or granted in law, the Firm or any of its lawyers may choose to act for and represent any one or more of the parties herein to the extent granted and that you waive any such rights to otherwise object to same; and
4. The Firm or any of its lawyers may take instruction or communicate with any of the said parties in regards to the Transaction, without having to notify the other said parties.  For example, this is very common between directors or shareholders of the same company, executors of an estate, or spouses, where often only one of the directors, executors, shareholders or spouses are providing us with instructions.

File Retention

After this Agreement and engagement (the “Retainer”) terminates or expires, we will close all files relating to the Retainer, Transaction or matter, in accordance with its File Retention and Destruction policy. The file will be stored off-site during this period and destroyed as soon as its Destruction policy allows. In the event that you instruct us to extract the file from off-site storage and reopen it, you will be required to pay an administrative fee over and above any legal fees in connection with the Retainer. This clause will survive the termination of this Agreement indefinitely.

The Retainer will terminate on the sooner of the closing date of the Transaction contemplated herein or as extended and the date in which the Transaction may be cancelled or fail to close, unless otherwise terminated by the parties hereto with notice by email or in writing.

Indemnification

You shall indemnify us, our Firm, our lawyers, contractors and employees harmless from any and all losses, costs, liabilities and expenses (including legal costs) in connection with:

1. A breach by you of this Agreement (including any third party legal proceedings arising out of that breach);
2. A claim against us, our Firm, our lawyers, our contractors and employees from a third party arising out of us representation you pursuant to this Retainer.  Provided that the indemnity in this paragraph will not apply if the third party claim is a direct result of a breach of this Agreement solely by us, our lawyers or employees, or professional negligence on the part of us.

This paragraph will survive the termination or expiry of this Agreement.

Our Liability To You

We acknowledge that we have solicitor/client liabilities to you (such as possibly a duty of loyalty and duty of care), arising out of our services in this Retainer as contemplated in Section 22 of the Solicitor’s Act (Ontario).

You acknowledge and agree that we, our Firm, our lawyers, our contractors and employees, are prepared to accept liability where decided in law, together in aggregate of up to $1,000,000.00, that being the maximum potential insurance claim under our lawyer’s basic errors and omissions insurance, with no exception and regardless of any excess insurance we may have, and that you will never claim for more in aggregate including all legal fees and disbursements, for any reason or cause no matter how severe or how large.

Change in Representation

If you choose to change lawyers at any time, in consideration of our review of documents and agreements and any other time spent on this transaction, the fees are deemed earned by the Firm and you will be responsible for the fees and disbursements.

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If no objection is raised with the above terms within one (1) business day after you receive this email, or we proceed with your Transaction in any way and for any reason as provided or instructed by you or your agents, directors, officers, shareholders, executors, realtors, brokers, family members or advisors, you are deemed to have agreed to be bound by the above terms.  If you have any questions, please do not hesitate to contact myself or my assistants.

Thank you very much for choosing our firm to assist you in this matter.

Note: This Retainer and message is not intended to be or replace any family law advice, wills or estates or otherwise opinions or advice from your legal counsel or anyone, however, if you are going through a divorce or separation, you should question and consider changing your power of attorney(s), will(s), beneficiary designations of any pensions, RRSPs, other registered accounts and investments, and to sever any joint tenancies on real estate properties, should any of the foregoing include a separating/divorcing spouse as a recipient (e.g. joint tenant or account holder).