A purchase and sale agreement signed on a Wednesday afternoon in suburban Edmonton committed a small professional services firm to acquiring a commercial building from its retiring owner for $1,420,000, with closing scheduled 75 days later and a $50,000 deposit held in trust by the seller's lawyer. The agreement attached a standard form schedule modified by 14 typed amendments addressing existing tenancies, the seller's representations about the building's mechanical systems, an environmental review condition, and an expansion clause permitting the firm to acquire an adjacent lot from a related corporation within 18 months at a pre-negotiated price.
Within 3 weeks of execution, the firm's lawyer ordered a title search through the Alberta Land Titles Office and identified 2 registrations that the agreement had not addressed. The first was a utility right-of-way granted to the municipality 22 years earlier, running diagonally across the rear of the lot in a location that affected the firm's planned addition. The second was a builders' lien filed 6 months before by a roofing contractor for $38,500 in unpaid work, a registration the seller's lawyer had not raised during negotiations and that would have to be discharged before clear title could pass on closing day.
The firm's due diligence period closed in 21 days. Within that window, the firm's principals also commissioned a building condition assessment, an environmental Phase I, an estoppel certificate from the building's largest tenant, and a survey to verify the boundaries described in the agreement. The Phase I flagged historical use of the property as a small auto-body shop in the 1980s, triggering questions about whether further investigation was required and whether the firm should request title insurance with broader coverage than the standard residential-grade policy the seller's lawyer had referenced in correspondence.
2 days before the condition deadline, the seller's lawyer transmitted a draft statement of adjustments showing prorations of property taxes, utilities, and rent payments from the existing tenants. The figures contained 3 errors that, taken together, understated the credit owed to the firm by approximately $9,200. Closing day approached with the title issues, the environmental flag, the lien, and the adjustments unresolved, and the firm faced decisions about whether to remove conditions, request an extension, walk away from the deposit, or proceed and pursue remedies after the fact.