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Sale Leaseback Agreement for Canada

Sale Leaseback Agreement Template for Canada

A Sale Leaseback Agreement under Canadian law is a sophisticated commercial arrangement where a property owner sells their real estate asset while simultaneously entering into a lease agreement to continue occupying and using the property. This document combines elements of both a purchase agreement and a lease agreement, structured to comply with federal and provincial requirements, including tax regulations and property laws. The agreement details the terms of sale, purchase price, closing conditions, lease duration, rental payments, maintenance responsibilities, and other critical terms that govern the ongoing relationship between the new owner-lessor and the seller who becomes the lessee.

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What is a Sale Leaseback Agreement?

The Sale Leaseback Agreement is a strategic financial and real estate instrument used in Canadian business transactions when an organization wishes to unlock capital tied up in real estate assets while retaining operational use of the property. This document type is particularly valuable for companies seeking to improve their balance sheet, obtain working capital, or restructure their real estate holdings. The agreement must comply with both federal and provincial legislation, including property law, tax regulations, and commercial tenancy requirements. It typically includes detailed provisions for the sale transaction, lease terms, maintenance obligations, insurance requirements, and various operational considerations. The document's complexity requires careful attention to both immediate transaction requirements and long-term implications for both parties.

What sections should be included in a Sale Leaseback Agreement?

1. Parties: Identification of the Seller/Lessee and Buyer/Lessor

2. Background: Context of the transaction, including property description and purpose of the sale-leaseback arrangement

3. Definitions: Key terms used throughout the agreement

4. Sale Provisions: Terms of the sale including purchase price, deposit, and closing conditions

5. Property Transfer: Details of property transfer, title warranties, and closing procedures

6. Lease Terms: Core lease provisions including term, rent, and renewal options

7. Use and Occupancy: Permitted use of property and occupancy conditions

8. Maintenance and Repairs: Responsibilities for property maintenance, repairs, and improvements

9. Insurance and Indemnification: Required insurance coverage and indemnification obligations

10. Default and Remedies: Events of default and available remedies for both sale and lease components

11. Assignment and Subletting: Rights and restrictions regarding assignment and subletting

12. Representations and Warranties: Statements of fact and promises by both parties

13. General Provisions: Standard contract clauses including notices, governing law, and entire agreement

What sections are optional to include in a Sale Leaseback Agreement?

1. Environmental Matters: Required for properties with potential environmental concerns or specific compliance requirements

2. Property Management: Included when specific property management arrangements are needed

3. Development Rights: Required when future development or modification rights are reserved by either party

4. Tax Matters: Detailed tax provisions when complex tax structures or specific allocations are involved

5. Operating Expenses: Detailed provisions for triple net lease arrangements

6. Purchase Option: Included when lessee retains right to repurchase the property

7. Financing Provisions: Required when transaction involves specific financing arrangements or requirements

8. Regulatory Compliance: For properties subject to specific regulatory requirements or restrictions

What schedules should be included in a Sale Leaseback Agreement?

1. Property Description: Legal description and details of the property

2. Purchase Price Allocation: Breakdown of purchase price allocation for tax purposes

3. Rent Schedule: Detailed rent payment schedule including escalations

4. Permitted Encumbrances: List of accepted liens, easements, and encumbrances

5. Operating Expense Definitions: Detailed definitions and calculations of operating expenses

6. Building Rules and Regulations: Specific rules governing property use and maintenance

7. Environmental Reports: Summary of environmental assessments and findings

8. Form of Deed: Template of property transfer deed

9. Insurance Requirements: Detailed insurance coverage requirements and limits

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Canada

Publisher

Ƶ

Document Type

Sales Contract

Sector

Sales

Cost

Free to use
Relevant legal definitions













































Clauses







































Relevant Industries

Real Estate

Commercial Property

Financial Services

Manufacturing

Retail

Healthcare

Industrial

Hospitality

Logistics and Warehousing

Education

Office Space

Agriculture

Relevant Teams

Legal

Finance

Real Estate

Operations

Facilities Management

Risk Management

Treasury

Corporate Development

Property Management

Asset Management

Relevant Roles

Chief Financial Officer

Real Estate Director

Corporate Counsel

Property Manager

Asset Manager

Investment Manager

Finance Director

Treasury Manager

Real Estate Investment Analyst

Facilities Manager

Legal Counsel

Risk Manager

Commercial Property Director

Operations Director

Business Development Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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