Buying or selling commercial property is a major transaction. While commercial and residential conveyancing share some similarities, commercial deals are often more complex.

What is commercial property?

“Commercial property” broadly covers industrial sites, warehouses, shops, offices and certain mixed-use premises.

These transactions may involve:

1. Tenanted properties where leases transfer with the sale;
2. Freehold titles (Torrens or strata); or
3. Development land subject to zoning or planning controls.

Because these properties are used for investment or business rather than residence, different laws and tax rules apply.

The commercial conveyancing process

Although the structure — contract, exchange and settlement — looks similar to a residential transaction, the legal review is more involved.

Your lawyer will typically:

1. Review the Contract for Sale, including GST clauses and any lease documentation.
2. Conduct due diligence searches such as zoning, title, heritage, fire safety and contamination.
3. Check tenancies or licences, confirming rent, bond and term details.
4. Advise on tax matters, including land tax, GST and potential capital gains.
5. Coordinate settlement through PEXA or paper completion with agents and lenders.

Some legal differences from residential conveyancing

1. Disclosure Requirements

Every contract for the sale of land — whether commercial, industrial or residential — must include the prescribed disclosure documents set out in Schedule 1 of the Conveyancing (Sale of Land) Regulation 2022 (NSW).

These typically include a current title search and plan, a sewerage or drainage diagram (where applicable), copies of registered dealings, and a section 10.7 planning certificate.

In commercial practice, these documents are usually attached as a matter of course, but buyers should not assume they are sufficient. Commercial properties often require additional due diligence — such as zoning, environmental, lease reviews and contamination — which go well beyond the statutory attachments.

In other words, Schedule 1 compliance is a starting point rather than a substitute for full commercial due diligence.

2. GST and Taxation

Sales of commercial property often attract GST.

A sale of a going concern (where the property is leased and income-producing) can be GST-free, provided both parties agree in writing and are registered for GST.

Land tax and outgoings are commonly adjusted at settlement. Your lawyer and your accountant should work together to ensure the contract reflects the correct tax treatment.

3. Finance and Ownership Structure

Commercial purchasers often buy through companies, trusts or self-managed superannuation funds.

The contract must identify the correct purchasing entity, and execution clauses must align with its structure.

Your property lawyer can confirm that nominee rights, lender conditions and guarantees are properly documented.

4. Due Diligence

Commercial due diligence goes beyond standard title searches and may include:

1. Contamination and environmental searches;
2. Council’s zoning and development controls;
3. Building compliance —accessibility, asbestos, fire safety, and essential-services certification;
4. Lease audits where tenants are in place.

These enquiries reveal issues that could trigger remediation obligations, limit use or affect value.

5. Leasing

Many commercial properties are sold subject to existing leases. The buyer effectively becomes the landlord, inheriting rights and obligations under those leases.

Your lawyer reviews make-good clauses, security bonds, rent rolls, and options to renew, and ensures compliance with the Retail Leases Act 1994 (NSW) where applicable.

• Unclear special conditions shifting risk between buyer and seller;
• Environmental contamination discovered too late;
• Failure to review leases, leading to disputes over rent, outgoings, or options;
• Incorrect GST treatment resulting in under- or over-payment of tax;
• Incorrect execution by corporate or trustee entities, invalidating documents.

Common issues in commercial conveyancing

Contract review and negotiation

Unlike standard residential contracts, commercial contracts are often heavily negotiated and bespoke.

They often include clauses about:

1. Assignment of leases or licences;
2. Access for pre-settlement inspections or due diligence;
3. Adjustment of rent, GST and outgoings;
4. Obligations to remove or retain fixtures and equipment;
5. Default interest, indemnities and limitation of liability.

Settlement and post-completion

Commercial settlements can be flexible but still often follow a 42-day (six-week) timeframe unless otherwise agreed.

Lawyers coordinate all aspects of completion, including:

1. PEXA settlement;
2. Adjustments for GST, outgoings, rent and land tax;
3. Final verification of title and lender documentation;
4. Rent-roll reconciliation and transfer of tenant records.

After completion, your lawyer ensures responsibilities transfer smoothly to the new owner and confirms registration of title.

Here to Help

Contact us now for free no obligation initial telephone advice about buying or selling commercial property.