Buying a plumbing company without the building it operated from

The situation

What worried Anne was not the price. It was a single sentence buried in Keisha's disclosure schedule, noting that the shop and yard the business operated from sat on a larger parcel that also included Keisha's house, and that the house was not part of the sale. Anne's fear was plain and practical: she could sign, pay, and take over the business, and still end up with no enforceable right to keep working out of the building the business actually needed.

Anne owned and ran a plumbing company out of Kitchener, licensed and established over fifteen years, and had been looking to expand into the Hamilton-Niagara area when a business broker connected her with Keisha, a plumber in Grimsby who was ready to retire and wind down a smaller but well-regarded service company. The two businesses were close enough in size and reputation that a straightforward asset purchase made sense. Anne's partner Simone worked full time as an IT support lead for a manufacturer in Kitchener, and handled logistics and dispatch scheduling for Anne's plumbing company most evenings, a second set of responsibilities that meant Simone was the one who actually began working through the broker's information package while Anne kept up with service calls.

Anne was rarely in Grimsby herself. Between running the Kitchener operation and travelling for supplier relationships, most of her review of the deal happened over video calls and shared documents, with Simone doing the closer, on-the-ground coordination by phone. Neither of them had been to the Grimsby property in person before the agreement of purchase and sale was signed, and it was only when a lawyer reviewing the schedule flagged the land description that the shop-and-house arrangement became clear.

The parcel had never been severed. Keisha's house, driveway, and the commercial shop and yard the plumbing business used were all on one legal lot, held under a single title, with no registered easement or right of way securing the business's use of the shop separately from the residence. Keisha wanted to keep the house and sell only the business and its equipment. Nothing in the draft agreement said how Anne's business was actually supposed to keep occupying the shop after closing.

The risk we had to size

The core problem was that a plumbing company is not just a customer list and a set of vans. It needs a place to store inventory, park vehicles overnight, and receive deliveries, and Keisha's shop had served that function for years under informal, unwritten permission from Keisha herself as both business owner and landowner. Once the business and the land had different owners, that informal arrangement had to become something Anne could actually enforce.

Severing the shop and yard from the residential portion of the parcel, so that Anne's company could hold its own legal interest in the commercial space, was the cleanest long-term answer. But severance in Ontario requires an application to the local land division authority, review against setback and access requirements, and in this case likely a survey to establish where the new boundary would run relative to Keisha's driveway and septic system. That process typically takes months, not weeks, and its outcome was not guaranteed; the local authority could refuse the application or require changes to the shop's access.

Waiting for severance to complete before closing the business sale was not realistic. Keisha wanted to retire on the timeline she and Anne had already agreed to, and Anne did not want to lose the deal, or the goodwill and existing customer base, over a land process that might take the better part of a year. The risk that needed sizing was narrower and more practical: not whether the parcel would eventually be severed, but whether Anne's company could be given a secure, enforceable right to occupy the shop in the meantime, one that would survive even if Keisha sold the house, refinanced it, or passed away before any severance was completed.

A right based on Keisha's word, or even a simple unregistered agreement, could not be counted on to survive a sale of the house to someone else or a dispute between Keisha's eventual heirs. Ontario law recognises narrow exceptions where an unregistered right still binds a later owner, such as a short lease coupled with the occupant's actual possession, or a buyer who took the property with actual notice of the arrangement, but exceptions like those are fact-dependent and hard to rely on years after the fact. It needed to be registered against the title itself, so that anyone who later dealt with the property would see it and be bound by it as a matter of course, not as a matter of proving an exception applied.

What we did

1. Ordered a current title search and a survey of the parcel before advising on any structure, because the exact boundaries of the shop and yard relative to the house needed to be understood precisely before anyone could draft an occupancy right around them. The survey confirmed the shop and yard occupied roughly a third of the lot, with a shared driveway as the only vehicle access, and turned up an old septic bed close to the yard's edge, close enough to matter for any future severance line.
2. Explained the severance timeline honestly to both Anne and Keisha rather than let either side assume it would be quick, setting expectations that a formal application, if pursued, would likely take most of a year, would require its own survey and a hearing before the local consent authority, and might not succeed on the first attempt given the shared driveway and septic proximity. Being candid about that timeline up front kept the lease negotiation from being derailed later by a false hope that severance was just around the corner.
3. Drafted a long-term commercial lease of the shop and yard from Keisha to Anne's company, running for an initial term long enough to give Anne's business real security, with renewal rights and a fixed formula for rent reviews tied to a published index rather than Keisha's discretion, so occupancy did not depend on her goodwill continuing indefinitely or on a fresh negotiation every few years.
4. Registered a notice of the lease on title, which put any future buyer, lender, or estate trustee of Keisha's house on formal notice of Anne's company's right to the shop, protecting the business even if the residential portion of the property changed hands through a sale, a mortgage default, or Keisha's own estate being administered by someone with no knowledge of the arrangement.
5. Negotiated a right of first refusal in Anne's favour tied to the shop and yard specifically, so that if Keisha or her estate ever did pursue and complete a severance, Anne's company would have the first opportunity to buy that portion outright at fair market value rather than losing it to a third party who had never operated a business from the site.
6. Built the shared driveway's maintenance and access terms directly into the lease, addressing snow clearing, cost sharing, and delivery vehicle timing in specific, dated language rather than a general good-neighbour clause, since this was the point most likely to generate friction between a working shop and a private residence sharing one access point every single day. Spelling out who plowed the driveway and by what hour mattered more, in practice, than the loftier severance question either side kept returning to.
7. Coordinated the closing entirely by video call and courier to accommodate Anne and Simone's distance from Grimsby, using power of attorney for the physical registration steps and confirming every document by recorded call before signature. Neither of them ever walked the property before closing, which made it more important, not less, that every term of the lease and the registered notice was confirmed verbally and in writing rather than assumed.

The outcome

The business sale closed on schedule, with the negotiated lease and registered notice in place instead of the outright ownership of the shop that Anne had originally hoped for. She got a secure, enforceable right to occupy the building the business depended on, but she did not get the certainty of owning the land outright, and the eventual severance, if it happens, remains uncertain and outside her control rather than something she can simply schedule and complete on her own timeline.

Keisha accepted a lower purchase price for the business than she might have gotten if the shop had come with clear, sellable land, since buyers generally pay less for a leasehold interest than for outright ownership. In exchange, she kept her house and the flexibility to deal with the full parcel as she saw fit later, including a possible severance and sale of the shop portion down the road under the right of first refusal Anne now holds, rather than being pressured into a severance application on a stranger's timeline.

Roughly eight months after closing, Anne's company was operating out of the shop without incident, and the shared driveway arrangement had not produced the friction either side worried about going in. Keisha has not yet pursued a severance application, and Anne has accepted that her occupancy will likely remain lease-based for the foreseeable future rather than converting to ownership, a compromise she describes as workable rather than ideal, but one that at least never leaves her wondering whether she still has a legal right to open the shop doors each morning.

Simone, who did most of the early legwork on the deal around evening shifts and dispatch calls, says the biggest change since closing has simply been knowing exactly what happens to the lease if Keisha ever sells the house separately, something neither of them could have answered with any confidence before the registered notice went on title.

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