Five steps to ensuring a smooth commercial property sale

  1. Review the contract

Commercial property sale: Commercial contracts are usually drafted using the standard Real Estate Institute of Queensland (REIQ) commercial land and buildings contract, but either party can choose to include special conditions within the contract that may alter or replace the standard conditions. It’s important that the contract conditions listed reflect your requirements exactly as you want them, as disputes often arise over contractual terms during the process of selling a commercial property.

  1. Meet your obligations

During the process of a commercial property sale, several steps need to be carried out to ensure you meet your obligations as a seller. Along with organising transfer documentation for your sale, a lawyer can assist in negotiating and confirming reasonable extensions of time requested by the buyers, and let you know when each condition becomes satisfied.

If there is currently a mortgage over your property, the release of the mortgage will need to be arranged with the financial institution. Your lawyer can liaise with your bank to ensure that the required steps are taken to ensure the release of the mortgage is ready for settlement.

  1. Know the adjustable items on your settlement statement

In drafting of the settlement statement, adjustable items such as outgoings and rent will need to be considered as they have an impact on the purchase price.  A commercial property may already have a tenant, so your lawyer can help by doing rental adjustments. Occasionally land tax will also be a consideration, and specific calculations for land tax can depend on clauses in the contract.

  1. Be GST prepared: issuing tax invoices

As a seller of a commercial property, if you are registered for GST you will need to provide the buyer with a GST tax invoice to enable them to claim a credit for GST in the purchase price. Your lawyer can assist with identifying what needs to be listed on the invoice, and provide samples of an appropriate invoice.

  1. Confirm you are ready to settle

Settlement of a commercial property sale can be a stressful time without the support of a lawyer. On the day of settlement, your lawyer will usually obtain the final payout figure on your mortgage from your financial institution and submit final cheque details to the buyer’s solicitor.

How we can help
Our expert lawyers can support you at every step of your commercial property sale. For more information on how we can help you, and for a quote, contact Cornerstone Law Offices on:

Phone: 1300 267 637

info@cornerstonelawoffices.com.au

 

 

 

Four steps to ensuring a smooth commercial property purchase

Purchasing a commercial property is a significant investment decision which carries substantial financial implications for you and your family or your business partners.

As there are several considerations which can affect the outcome of your property purchase, it is best to speak with your lawyer before signing any contract to purchase a commercial property to ensure your interests are protected.

  1. Review the contract

The first step in a business purchase should be to engage a lawyer to ensure your contract is exactly as you want it.  Purchasing a commercial property is a considerable investment, so you will need a lawyer not only for the conveyancing but also for pre-contractual negotiations and review.

Along with assisting in negotiation of terms between you and the seller, your lawyer should review the current terms of the contract to ensure that all clauses benefit you and to avoid unwelcome surprises down the track. The final contract should be an accurate reflection of the deal you have negotiated, and should ensure you are not disadvantaged.

  1. Due diligence: know what you are purchasing

The due diligence stage of purchasing a commercial property is extremely important in ensuring the property is in good condition. Searches often reveal surprising information about commercial properties and can make a significant difference to the contractual terms. To avoid being caught out, your lawyer can carry out several searches on the property for you, such as a company search or a search of the contaminated land register.

  1. GST: find out if you are eligible for exemptions

Before signing the contract, you will need to consider the GST implications on the purchase. When it comes to stamp duty, the amount of you will need to pay may increase if GST is to be paid on the contract, as stamp duty is dependant on the purchase price plus GST. However, there are some exemptions such as the ‘going concern’ exemption, which may apply if the property is a business premises or a tenanted building. We can help you determine if you can save money on GST before you sign the contract, which can make a difference to your overall cash flow.

  1. Tenancies: understand what is in the lease

If you are purchasing a property that already has a tenant, the specific terms of the lease can sometimes have an impact on the commercial viability of the purchase. Once you sign the contract you are bound by any leases disclosed in the contract, so you will need an experienced lawyer to review the terms of the lease and determine the terms of the lease and any obligations you are bound to fulfil.

How we can help

Purchasing a commercial property is likely to be one of the most important investment decisions you make. As experienced lawyers, we can help make the process as smooth as possible for you.  For more information on how we can help you, and for a quote, contact Cornerstone Law Offices on:

Phone: 1300 267 637

info@cornerstonelawoffices.com.au