Buying or selling commercial property is a major transaction. While the conveyancing process shares some similarities with residential property, commercial deals often involve greater complexity — from GST and lease reviews to zoning, contamination and tax planning.
This guide explains how commercial conveyancing works in NSW, the key legal differences from residential property, and why specialist advice is essential to protect your position.
What Counts as Commercial Property?
“Commercial property” broadly covers offices, warehouses, shops, industrial sites and certain mixed-use premises.
These transactions may involve:
Freehold titles (Torrens or strata);
Tenanted properties where leases transfer with the sale; or
Development land subject to zoning or planning controls.
Because these properties are used for business or investment 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:
Review the Contract for Sale, including GST clauses and any lease documentation.
Conduct due diligence searches such as title, zoning, contamination, heritage and fire safety.
Check tenancies or licences, confirming rent, bond and term details.
Advise on tax matters, including GST, land tax and potential capital gains.
Coordinate settlement through PEXA or paper completion with lenders and agents.
Key Legal Differences from Residential Conveyancing
1. Disclosure Requirements
Under the Conveyancing (Sale of Land) Regulation 2022 (NSW), every contract for the sale of land — whether residential, commercial or industrial — must include the prescribed disclosure documents set out in Schedule 1.
These typically include a current title search and plan, copies of registered dealings, a section 10.7 planning certificate, and a sewerage or drainage diagram (where applicable).
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 environmental, zoning, contamination, and lease reviews — which go well beyond the statutory attachments.
In other words, Schedule 1 compliance is a starting point, not 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 are registered for GST and agree in writing.
Land tax and outgoings are commonly adjusted at settlement.
Your lawyer works with your accountant to ensure the contract reflects the correct tax treatment.
3. Finance and Ownership Structure
Commercial purchasers frequently 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 guarantees, nominee rights and lender conditions are properly documented.
4. Due Diligence
Commercial due diligence goes beyond standard title searches and may include:
Zoning and development controls from council;
Building compliance — fire safety, accessibility, asbestos and essential-services certification;
Environmental and contamination searches;
Lease audits where tenants are in place.
These enquiries reveal issues that could limit use, trigger remediation obligations 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 rent rolls, security bonds, make-good clauses and options to renew, and ensures compliance with the Retail Leases Act 1994 (NSW) where applicable.
Common Issues in Commercial Conveyancing
Incorrect GST treatment resulting in under- or over-payment of tax.
Unclear special conditions shifting risk between buyer and seller.
Failure to review leases, leading to disputes over rent, options or outgoings.
Environmental contamination discovered too late.
Incorrect execution by corporate or trustee entities, invalidating documents.
An experienced commercial property lawyer identifies and addresses these risks before contracts are exchanged.
Contract Review and Negotiation
Unlike standard residential contracts, commercial contracts are often bespoke and heavily negotiated.
They commonly include clauses about:
Access for pre-settlement inspections or due diligence;
Assignment of leases or licences;
Adjustment of rent, GST and outgoings;
Obligations to remove or retain fixtures and equipment;
Default interest, indemnities and limitation of liability.
A lawyer ensures these clauses reflect your commercial objectives and that the risk allocation is clear.
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:
Adjustments for rent, outgoings, GST and land tax;
Final verification of title and lender documentation;
PEXA settlement or, if required, paper settlement with bank cheques;
Transfer of tenant records and rent-roll reconciliation.
After completion, your lawyer confirms registration of title and ensures responsibilities transfer smoothly to the new owner.
Why Specialist Legal Advice Matters
Commercial conveyancing involves high-value assets, longer contracts and multiple layers of regulation.
A specialist property lawyer will:
Check GST and land-tax implications with your accountant;
Review leases and disclosure obligations under the Retail Leases Act;
Manage environmental and zoning due diligence;
Negotiate special conditions that protect your interests; and
Coordinate lenders, accountants and agents to meet all legal and commercial deadlines.
Without this expertise, small drafting errors can lead to significant financial exposure.
Conclusion
Commercial property transactions demand careful legal and financial coordination.
Each deal must be tailored to the property, the parties and their business objectives.
Speak to a specialist property lawyer
Our property team includes multiple Law Society Accredited Specialists in Property Law who act for business owners, landlords and investors in commercial property transactions across Sydney and NSW.
If you’re buying or selling commercial property, give us a call or submit an enquiry now to speak with one of our expert conveyancing lawyers.
