Buying or selling commercial property in Australia is a big decision and, quite often, a complex process. For many business owners and investors, it can be one of the most significant financial moves they make. To make sure everything goes smoothly and legally, engaging a commercial solicitor is a smart move. Here are the essential legal steps to keep in mind when you’re buying or selling commercial property.
Engage a Commercial Solicitor Early On
Getting a good commercial solicitor always marks the starting point in every transaction related to the property. A transaction concerning a commercial property has different legal requirements from its residential counterpart, so you want a solicitor experienced in this area.
Conduct Due Diligence
For buyers, conducting thorough due diligence is crucial. This involves assessing the property’s legal, financial, and physical condition. The commercial solicitor can assist you to ensure that zoning regulation, easements, land use, or any other conditions do not adversely affect your proposed use of the property.
Draft or Review the Contract of Sale
A contract of sale is essentially the core document in any property transaction because it contains the conditions and terms of a purchase or sale. The document should include the following: the purchase price, settlement terms, and special conditions.
Understand Goods and Services Tax (GST)
One major difference between residential and commercial property transactions is the potential GST impact. Commercial property sales can attract GST, and there are certain requirements that might apply depending on how the property is used.
Secure Financing and Finalise Conditions
For the purchaser, it is important that your finance is approved and coordinated in time with the date stipulated under the contract. There may be pre-set conditions that must be conducted prior to your transfer taking place. You might require a building inspection or may need to comply with certain aspects of the law.
Complete Settlement and Transfer Ownership
The precise date upon which the property will actually change hands is settlement day. In a settlement, your commercial lawyer will work with the buyer’s team to ensure all payments are processed and that the title will transfer over to them. The final step is pretty intricate and usually involves lenders, transfer documents, and final checks against contract conditions that may have been outlined between the parties. Once that’s done, the title to that property is transferred and then changes hands, and the sale is finalised.
The Bottom Line
Commercial property purchase or sale involves significant investment, and every step involves legal detail that could affect your rights and obligations. By seeking the right advice from an experienced commercial solicitor when it’s time to sell or buy, you avoid legal pitfalls. Due diligence by the sales transaction is a legal procedure that prepares for the smooth transfer of the commercial property from the seller to you. Prior to settlement, it becomes another opportunity to protect your interests while getting the best out of your investment in commercial property.
