PROPERTY LAW & CONVEYANCING

PURCHASE AND SALE OF PROPERTY

 

Purchase of property, commercial or personal, involves negotiation between the parties, generally establishment of loan facilities to provide funds, and establishment of contract.

 

We are able to assist clients throughout all these steps and to proceed to the registration required.

   

Australia

In Australia we can effect all instructions from clients in purchase and sale, as well assist non-residents in obtaining any necessary authorisations from the Australian government through Foreign Investment Review Board and in exiting on sale with capital gains tax considerations.

 

France

The purchase of real estate in France, French Pacific territories and most civil law countries is reserved to lawyers working as notaries only. In Francophone jurisdictions all documents must be in French, and for those coming from Australia they need to be legalised by a public notary and receive the apostille of the Australian Department of Foreign Affairs.

 

COMMERCIAL PROPERTY AND LEASING

Businesses require premises.

 

Some may seek to purchase factory or showroom sites. Others may seek to purchase office space. Purchases need to be negotiated and agreed terms set out in full in the contract between the purchaser and the vendor. Any contractual term for purchase and sale of real estate must be in writing to be valid, and unless otherwise provided, all rights and obligations under the contract cease on completion of the purchase/sale.

 

Contract for sale of real estate

These are normally standard documents with exceptional clause (special conditions). Points to watch for are:

 

  • Is there any cooling off period?

  • If the purchase is by auction or after advice given by a qualified lawyer or conveyancer, who supplies a certificate to that effect, then no.

  • Whether the date for completion of the sale is reasonable enough to permit finance to be put in place and necessary enquiries required from government and other relevant authorities to be completed

  • Have all items included or excluded in the sale been so noted on the contract?

  • Is land tax to be adjusted?

  • Is GST payable on the sale?

  • Is the title clear and able to be transferred as contracted?

  • Is the property sold with vacant possession or subject to a lease?

  • Note that if the property is sold with a tenant, it is then a sale of a going concern and so exempt from GST.

  • Are any special conditions in the contract too onerous?

  • Is the zoning suitable for the purpose?

  • Are sewer connections suitable?

  • If the property is strata title, has strata report been obtained to see any likely future problems or costs?

  • Has a building report been obtained?

 

Most businesses lease premises as a cheaper and more flexible form of accommodation. The terms of occupation are set out in the lease and care is needed in negotiating these terms for both the lessor and lessee to anticipated changes during the term of the lease and subsequent, and for retail premises, that the stringent provisions provide by the various retail lease laws around Australia are met.

 

All leases have fundamental provisions to be included, such as:

  • Description of the premises sufficient to identify them.

  • Description of the parties.

  • If the lessee is a company, then it is likely that a personal a guarantee will be required from the director(s) of the company lessee.

  • Provision for a security bond or bank guarantee from the lessee.

  • Insurance to be provided by the lessee that notes the interest of the lessor and maybe any mortgagee of the lessor.

  • Consent of any mortgagee of the lessor.

  • Provision of any option that obliges the lessor for a further term on request of the lessee.

  • Provision for any annual rent review during the term of the lease and on exercise of any option to renew.

  • Specification of use of the premises.

  • Obligations to repair.

  • Contributions to outgoings and increases in those outgoings.

  • Any termination of lease for destruction of premises.

  • Provision for termination of lease in other cases.

  • Responsibility for lease legal costs.

 

For retail leases:

  • There needs to be first a disclosure statement summarising the terms of the proposed lease that is signed off by the parties.

  • In principle a retail lease has a minimum term of 5 years, unless otherwise specifically agreed.

  • Ordinarily legal costs of the lessor cannot be demanded from the lessee but must be paid by the lessor.

 

Assignment of lease:

  • All leases can be transferred unless the lessor reasonably considers that the proposed new tenant will not be able to meet the obligations under the lease, including ability to carry in business, as frequently happens with inexperienced purchasers of restaurants.

  • If there is a mortgagee of the lessor, again the mortgagee has to consent to the transfer of the lease.

  • All costs of the parties to the transfer of the lease have to be negotiated between the parties, although it is usually the assignee (transferee) who carries those legal costs, including those of the lessor, the mortgagee, the assignor and the assignee’s own costs.

 

Registration of lease:

All leases over three year or more must be registered at the Title Registry.

 

Continuation after expiry of term:

After expiry of the term of the lease, and failing any renewal, the lease will generally continue as a monthly lease, so that either party can terminate on one month’s notice.

If you require any assistance, please contact us at info@hillmanlawyers.com.au or call us at       +61 2 9232 8392

© 2019 by Hillman & Associates. 

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