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1. Due Diligence: To evaluate the operational, legal, and financial standing of a hotel, extensive due diligence must be carried out. Whether buying or selling, our lawyers help you gather and review all necessary documentation, ensuring the deal is secure and transparent.
2. Asset or Share Sale : You will need to choose between an asset sale (buying specific assets) and a share sale (acquiring parent company shares). Each option carries tax and responsibility implications. Our experts will help you decide which option is ideal for your transaction.
3. Financing: Securing financing can be a significant challenge when purchasing a hotel. Prudent Law assists you in negotiating loan terms, reviewing agreements, and ensuring compliance with all legal requirements, reducing your risk.
4. Lease Agreements: If the hotel operates on leased property, it is crucial to negotiate and review lease terms that align with legal requirements and your business goals. Our legal team ensures that lease agreements work in your favour.
5. Employment Agreements: Hotels frequently have complex employee organizations. We can help you examine and revise employment contracts to maintain compliance and safeguard your interests, whether you’re buying or selling a firm.
6. Brand requirements: The flag of the hotel is usually very important to any purchaser. We can help you review any requirements placed by the brand/ franchisor on the hotel including Property Improvement Plans.
For sellers, we can help ensure that the Buyers assume the same flag and help you avoid paying expensive termination penalties under the Franchise Agreement.
The Complexities of Hotel Financing
Hotel financing presents unique challenges due to the specialized nature of the industry. Banks are often cautious in extending loans, requiring detailed monthly reporting and segregating revenue for future expenses. Prudent Law’s team of hotel business lawyers can help you understand the nuances of any credit agreements offered by prospective lenders and ensure that the Bank’s requirements are reasonable and can be met by the Hotel and purchaser.
How Prudent Law Can Help
At Prudent Law, we take pride in handling complex transactions, including hotel sales and acquisitions. We assist with:
- Comprehensive legal due diligence
- Negotiating and drafting purchase agreements
- Reviewing lease and employment contracts
- Reviewing financing options and security
- Guiding clients through operational matters, franchise agreements, and hotel property improvement plans
Our trained lawyers specialize in dealing with the delicate details of hotel transactions, ensuring you receive sound legal guidance every step of the way.
Contact Prudent Law Today
If you are planning to buy or sell a hotel business in Ontario, trust Prudent Law to guide you through the process. Our professional team is fully prepared to handle all legal elements, assuring a smooth and successful transaction.
Contact us at info@prudentlaw.ca or call 1-905-361-9789 to schedule a free consultation. Let us help you secure the best outcome for your hotel business.
