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Zoning issues can hold up commercial real estate ventures

Sometimes the best-laid plans can end up a frustrating mess when government red tape gets in the way. Buying, selling and adapting commercial real estate is a complex matter than may involve multiple government departments before making any headway. An Alberta man is all too aware of the difficulties a small business owner can face as his protracted battle with the city of Edmonton drags on.

In 2014, a man purchased a derelict garage with the intention of fixing it up and opening a new business. The site had been deteriorating for more than 10 years and was an eyesore in the neighbourhood. At the time, city officials seemed pleased that something was finally going to be done about the property.

Fast-forward 18 months, and the garage is still shuttered, and the owner claims he is going bankrupt waiting for the city to give him the green light to open. He sank $250,000 into refurbishing the building and had the support of the neighbourhood. However, the city informed him the property was not eligible for grandfathering, and required re-zoning. Multiple miscommunications further hindered the process. Most recently, the city has demanded the remediation of a contaminated strip of land adjacent to the property, which could push back the projected opening by many months.

When one seeks to buy commercial real estate in Alberta, it is important to thoroughly research the property and the zoning restrictions before signing a deal. Failure to do so could lead to unfortunate delays, or cost overruns. Before, during and after a commercial property purchase, it may be worth having a lawyer review each step. A lawyer's understanding of real estate law may expedite the process, and help to avoid legal difficulties.

Source: Edmonton Sun, "Small business choked by red tape", Elise Stolte, March 29, 2017

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