Lawthentic Loop

Keep up-to-date with all Lawthentic things

Lawthentic Loop

Keep up-to-date with all Lawthentic things

It’s imperative to engage professionals with the right expertise. A commercial real estate agent, accountant and business lawyer will help you navigate through the process and make the exercise far less daunting.

Buying commercial property

It’s imperative to engage professionals with the right expertise. A commercial real estate agent, accountant and business lawyer will help you navigate through the process and make the exercise far less daunting.

Delving into the world of commercial real estate can feel like a daunting task. Factors like financing options, market influences and property characteristics all come into play when you’re buying commercial property.

But what are the fundamentals from a legal perspective? We share the top things you need to consider when buying commercial property.

1. Owner occupier or investor: Are you buying the property to run your business or is it an investment? If the property is tenanted: Is there a lease in place? If so, have your business lawyer review the lease. How long is left on the term? Is there an option to renew and has it been validly exercised? If you’re an investor additional considerations include: What is the caliber of the tenant? Is the rental amount consistent with the market? An appraisal from a real estate agent specialising in commercial property is always recommended. If the tenant leaves, will it be easy to find a new tenant? Consider factors such as size, location and suitability for a variety of uses.

2. Structure: Think about the structure in which the property will be owned. Will it be purchased in your individual name, in the name of a company, or in the name of a trust? Your business lawyer will be able to advise you about asset protection. You should also chat to your accountant about any tax implications.

3. Inspections and reports: Don’t get stung by buying a property riddled with problems. Speak to your business lawyer about obtaining condition reports (including building, pest and strata) before you sign on the dotted line.

4. Intended use: Local council and other government authority permits and licenses must be in place, such as a development application and an occupation certificate. Zoning is also crucial for what uses are permitted. This is important irrespective of whether you intend to run your business from the premises or the property is leased to a tenant.

5. GST and other taxes: Buying commercial property may attract GST in addition to the purchase price. However, if the property is being leased it may be purchased as a going concern, meaning it is GST-free. Other taxes such as stamp duty and land tax may also apply. It is vital to get advice from your business lawyer and accountant before you sign the contract.

Don’t forget, it’s imperative to engage professionals with the right expertise. A commercial real estate agent, accountant and business lawyer will help you navigate through the process and make the exercise far less daunting.

If you’re looking at buying commercial property, let’s grab a coffee and chat about the legal nitty-gritties before you take the plunge. We’ll give you a fixed quote and get straight down to business. Drop us an email to connect

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