Commercial Property Contracts
Commercial properties by their nature are more complex than your average residential properties. Therefore, the preparation and entering into of a contract for the sale and purchase of a commercial property needs careful consideration.
What matters should be considered?
Matters that should be considered include:
- the purchasing entity,
- due diligence,
- commercial leases and tenancies,
- service contracts,
- physical inspection of the property and its services e.g. air conditioning, lifts and fire equipment,
- planning compliance,
- finance, and
As with any property transaction, the contract is the document that binds the parties and will be relied upon in the event of a dispute. It is vital that the contract correctly reflects the intentions of the parties. We can assist with contract preparation and negotiation, due diligence investigations and the completion of the transaction.
GST on property transactions
Unless the property that is being sold is a second hand residential property than there is likely to be a GST issue with the property transaction that needs to be considered and covered in the contract.
Essentially the contract will need to stipulate whether any of the following apply:
- the purchase price is inclusive of GST,
- the purchase price is exclusive of GST,
- the margin scheme applies,
- the sale is the supply of a going concern, and
- the farmland exemption applies.
GST on property transactions is a complex area and needs to be dealt with properly from the outset. We can assist often in collaboration with your accountant.
Commercial Property Contracts Team
Duncan Murdoch - Director