Buying or selling commercial property involves far more than signing a contract and exchanging keys. It’s a detailed process that requires a clear understanding of commercial conveyancing – the legal framework that ensures ownership is transferred correctly and all obligations are met. This article will outline the main legal steps in both buying and selling commercial property, helping investors, business owners and landlords understand what to expect.

Due Diligence

Before entering into a contract, both buyers and sellers should undertake due diligence. For buyers, this means assessing the property’s physical condition, financial performance and legal standing. For sellers, it’s about ensuring all information disclosed is accurate and complete.

In commercial conveyancing, due diligence often includes reviewing zoning certificates, building compliance, lease agreements and environmental reports. Buyers should also check for encumbrances such as easements or caveats that may affect future use of the property. Having an experienced conveyancer or lawyer review these documents can help identify potential issues early, allowing the buyer to negotiate conditions or withdraw before committing. Proper due diligence reduces the likelihood of disputes later on and provides a solid foundation for the transaction.

Contract Preparation and Review

The Contract of Sale forms the backbone of any commercial conveyancing transaction, as it outlines the rights, obligations and timelines for both parties. Sellers are responsible for preparing the contract, while buyers should have it reviewed carefully before signing.

A well-prepared contract includes essential details such as the purchase price, deposit, settlement date and any conditions like finance or building approval. It may also specify goods and equipment included in the sale. For properties with tenants, lease terms and rent details should be attached to ensure transparency. Lawyers play an important role in ensuring the contract aligns with the property’s title, complies with legal requirements and protects their client’s interests. They can also negotiate amendments and advise on risk mitigation before the deal becomes binding.

The Exchange of Contracts

Once both parties agree on the contract terms, the next stage is the exchange. This step formalises the agreement and commits each party to completing the transaction. In commercial conveyancing, the exchange represents a legally binding commitment, so it’s critical that all details are correct before proceeding. After exchange, neither party can make changes unless both agree. This stage also marks the point where the buyer must begin preparing for settlement by arranging finance and conducting final checks on the property’s condition.

Pre-Settlement Checks and Adjustments

As settlement approaches, there are several pre-settlement checks to complete. Lawyers and conveyancers will confirm that the title is free from new encumbrances and ensure all council rates, water charges and outgoings are adjusted to the settlement date. This stage of commercial conveyancing is vital for identifying last-minute issues that could delay or jeopardise the settlement. Once all checks are complete, both parties will prepare for the formal transfer of funds and title.

Settlement and Transfer of Ownership

Settlement marks the official handover of ownership. On the settlement day, funds are exchanged, documents are signed and the property title is transferred to the buyer. In most commercial conveyancing matters, settlements are now conducted electronically through systems like PEXA, allowing for secure and efficient transfers. After settlement, the buyer becomes the legal owner of the property, while the seller receives the sale proceeds. The title is updated with the relevant land authority, completing the legal process.

Conclusion

Buying or selling a commercial property involves numerous steps that extend beyond simply signing a contract. From due diligence and contract review to settlement, every stage of commercial conveyancing carries important legal and financial implications. Having professional guidance ensures that both buyers and sellers understand their obligations and experience a smooth transaction.