Buying and Selling Commercial Property

Contracts for the sale of Commercial properties can be quite complex with a range of warranties (promises) made by the Seller to the Buyer. Throughout the contract’s duration, the Buyer may terminate the agreement if these warranties prove untrue.

Proper investigations into issues such as the tenancies, council requirements, permitted use and compliance with the multitude of legislative requirements can often deal with and comfort the client that the contract will proceed to settlement through no fault of theirs.

Most searches will uncover any notices or issues with the property. For example, the Council may have issued a show cause notice for non-compliance with a Council Regulation or Local Law.

If the Seller chooses not to satisfy the Council’s requirement and properly discloses this in the contract, the Buyer may assume the obligation to comply with the Council’s Notice. If the Seller did not search, it may never be aware of the Notice at the time of entering into the contract.

Buyers often attend auctions on short notice to bid on a property. After winning, they may find out from their accountant that the buying entity is incorrect, either for taxation or asset protection reasons.
You can change the entity purchasing the property, but you should prepare the appropriate documentation to avoid incurring double Transfer Duty on the transaction.

We can prepare the necessary documentation and address any Transfer Duty issues. It will ensure compliance with the Office of State Revenue requirements and meet your needs and your accountant.

In short, a Buyer who becomes the new Landlord as the successor in title may not have all of the rights of the original Landlord. It is because some covenants do not “touch and concern” the land. When purchasing commercial property with ongoing leases or tenancies, the Buyer should always ensure that they receive the original Landlord’s contractual rights, which the Seller typically holds. As part of our conveyancing process for commercial property, we ensure that the Buyer receives these rights and enjoys the same benefits as the original Landlord.