Commercial Real Estate Statements of Adjustments in Alberta

1. Fix the legal transaction perimeter

Start with the executed agreement, amendments, legal parties, every titled parcel or condominium unit, included assets, assumed obligations, closing date, possession terms and the agreed adjustment time. A civic address or marketing package cannot define the closing perimeter.

Separate real property, equipment, inventory, contracts, tenant deposits, prepaid amounts and any business assets. Counsel and tax advisors should determine allocation and legal treatment.

• Executed agreement and amendments
• Legal parties and authority
• Legal descriptions
• Included and excluded assets
• Effective date and time
• Post-closing obligations

2. Reconcile price, deposits and other consideration

Show the fixed purchase price and every deposit already paid, including the holder, trust balance, interest treatment and amount credited at closing. Reconcile vendor financing, assumed debt, holdbacks, earnouts or other consideration separately from cash due.

Do not net an unresolved deposit or deferred amount into proceeds without the written transaction record. A nominal purchase price and actual closing cash can differ materially.

• Purchase price
• Deposit credit
• Vendor financing
• Assumed obligations
• Holdbacks
• Cash required or released

3. Adjust property taxes from the actual municipal record

Use the applicable tax notice, payment history, tax certificate where required, installment plan and the agreement's allocation rule. Confirm whether an amount is paid, unpaid, estimated, supplementary, subject to local improvement or under review.

Municipal assessment is not the tax adjustment and does not establish sale value. A pending assessment complaint or supplementary levy should be identified for counsel rather than silently estimated.

4. Reconcile rents, deposits and tenant liabilities

For occupied property, trace billed rent, additional rent, percentage rent, arrears, credits, prepaid rent and security instruments to leases and the tenant ledger. Identify the party entitled to each amount before and after the agreed adjustment time.

Schedule tenant deposits, letters of credit, prepaid amounts, rent-free periods, inducements and outstanding landlord work. Transfer of cash does not by itself transfer the related contractual obligation.

• Current rent ledger
• Arrears and credits
• Tenant deposits
• Prepaid rent
• Inducement balances
• Outstanding landlord work

5. Separate estimated recoveries from final true-ups

Operating-cost and property-tax recoveries may be billed from estimates and reconciled after year-end. Identify the current estimate, tenant shares, exclusions, caps, administration charges, actual costs available and which party must deliver the final reconciliation.

If actual information is unavailable at closing, the agreement should govern estimates, reserves, holdbacks, information delivery, audit rights and post-closing correction. An estimate should retain its source and limitation.

6. Address utilities, contracts and periodic charges

Review utilities, service contracts, insurance, condominium contributions, licences, permits, local improvement charges and other periodic property obligations. Determine which contracts are assigned, terminated or replaced and whether the provider bills in arrears.

Meter readings, account-transfer dates, cancellation charges and deposits may sit outside the lawyer's statement. Maintain an operational handover ledger so an omitted billing item does not become an unowned obligation.

7. Keep GST outside casual arithmetic

The CRA states that a sale of commercial real property is generally taxable unless a specific exemption applies. The supplier's collection obligation and a registered purchaser's possible self-assessment are fact-specific and should be documented by qualified tax and legal advisors.

Do not assume GST is included, additional, exempt, self-assessed or offset by an input tax credit merely because the parties are corporations or registrants. Record the advice, registrations, certificates, filings and cash treatment required for closing.

8. Run a draft, approval and post-closing ledger

For every line, retain the agreement clause, source document, period, calculation, preparer, reviewer and unresolved question. Compare the buyer and seller versions before signing closing documents and funding.

After closing, track estimated adjustments, final operating-cost reconciliations, tenant notices, late invoices, tax changes, holdback releases and correction rights. Commercially can coordinate property and tenancy evidence; it does not prepare legal statements of adjustments or decide tax treatment.