• Unlike purchase of residential properties, the contract for purchase of commercial property does not have a cooling off period. The contract is unconditional on exchange. 

• Do ensure that your intended enterprise from the property is authorised and permitted by the local authorities. For this, check with the council for their authorisations, permissions, and requirements. 

• All due diligence regarding the property (inspection reports, authorisations, permissions, vendor identity, valuation, finance, etc.) must be completed prior to exchange of contracts.

• You may be required to obtain council approval for intended development on the property, including internal fixtures and fittings.

• All properties constructed prior to 31 December 2003 must provide asbestos register and asbestos management plan. 

• Unless the property is being sold as going concern, GST may be payable in addition to the price.

• GST may be payable on the amounts due and payable in respect of amounts payable as council rates, water rates, land tax, and (if applicable) strata levies.

• You will be liable for land tax on the property from and after purchase of property. Therefore, on the settlement date either all land tax is paid off to Revenue NSW or vendor must provide land tax clearance certificate. 

• The duty payable is calculated on the value that is a total of price and GST.

• The requisitions on title attached to the contract are different from the requisitions on title attached to a residential property contract.

• In all other respects, the transaction is similar to purchase of residential property. 

• Sometimes the contract for sale of land also includes in the same contract the terms and conditions for sale of business. This is generally done when the vendor for sale of commercial property is also the vendor for sale of business.

• If the contract for sale of commercial property includes the terms and condition for sale of business in the same contract, it is advisable that for the purposes of duty, the parties, by way of special condition in the contract, apportion the price on the contract in the categories of:

‣ Land and building

‣ Fixtures and fittings

‣ Plant and equipment

‣ Goodwill

If the price is not apportioned, the purchaser may be paying duty on the components on which otherwise no duty is payable.

Ready to navigate the complexities of commercial property transactions? Contact Allwright Bourke today for expert guidance and legal support tailored to your needs. Let’s make sure your next venture is a success. Reach us by phone (1300 225 297) or by email (admin@allwrightbourke.com.au).