What are the most common issues when buying a commercial property?

When buying a commercial property, there are several issues that should be identified and addressed early to avoid unexpected costs or legal problems later on.

Key areas to watch include:

• Zoning and permitted use: Checking the property can be lawfully used for your intended purpose and complies with local planning controls.
• Tenancy and lease agreements: Reviewing existing leases to confirm tenant obligations, lease terms, rent reviews, incentives, and whether the leases work in your favour as the new owner.
• Building and safety compliance: Identifying any outstanding fire safety, accessibility, or building upgrade requirements that could result in significant expense.
• Tax and GST: Assisting to confirm whether the sale is subject to GST or qualifies as a going concern, which can have a major impact on cash flow.
• Environment and contamination: This is particularly important for industrial or older properties, where past use may affect current environmental liabilities.
• Ongoing costs: Understanding how costs such as rates, insurance, repairs, and maintenance are shared between landlord and tenant.

Your commercial conveyancing lawyer will flag these issues early, explain them clearly, and put protections in place so you don’t have to face unexpected problems that should have been resolved before settlement.