Commercial property conveyancing refers to the legal process of transferring ownership or interest in a commercial property from one party to another. Whether buying, selling or leasing, this procedure requires precision and diligence to ensure all legal and financial aspects are properly managed. This article breaks down the key steps involved in commercial property conveyancing in Melbourne.
Step 1 – Initial Preparation
The commercial conveyancing process begins with preliminary preparations by both parties. The seller appoints a solicitor or conveyancer to prepare legal documentation, while the buyer secures financing and appoints their own legal representative. At this stage, both parties agree on the terms of the transaction, including the purchase price, deposit amount and anticipated timelines.
Step 2 – Drafting & Exchanging Contracts
The seller’s solicitor drafts the initial contract of sale, outlining all the essential details about the property. This includes title information, property boundaries, planning permissions or zoning requirements, and details of any encumbrances, easements or restrictions.
This draft contract, along with supporting documentation, is sent to the buyer’s solicitor for review. The buyer’s solicitor may raise pre-contract enquiries to address issues such as environmental assessments, lease details (if applicable) and any ongoing litigation concerning the property.
Once both parties are satisfied with the terms and answers to enquiries, they’ll proceed to exchange contracts. At this point, the transaction becomes legally binding.
Step 3 – Conducting Due Diligence
A critical part of commercial property conveyancing in Melbourne is the buyer’s due diligence. This step includes:
- Title Searches – Ensuring the seller has a legal right to sell the property.
- Local Authority Searches – Checking for any local planning, zoning restrictions or potential developments that could affect the property.
- Environmental Surveys – Investigating risks such as contamination or flood zones.
- Structural Surveys – Assessing the physical condition of the property.
Any discrepancies or concerns identified during this phase must be addressed before proceeding further.
Step 4 – Financing & Deposit
If the buyer is using financing, the lender’s legal team also becomes involved. The lender will typically require proof of a clear title and other due diligence reports before approving the funds. The buyer is responsible for paying a deposit when contracts are exchanged.
Step 5 – Completion
On the completion date, the balance of the purchase price is transferred from the buyer’s solicitor to the seller’s solicitor. The seller hands over the keys and all relevant property documents, including the signed transfer deed. Ownership officially changes hands at this point.
Step 6 – Post-Completion Tasks
Following completion, both parties must fulfil post-transaction obligations. The buyer must calculate and pay any applicable stamp duty. In addition, the buyer’s solicitor will need to register the property under the new owner’s name at the Land Registry.
Step 7 – Finalising Commercial Aspects
In cases of leased properties, additional steps may be required, such as transferring existing leases, notifying tenants or negotiating new lease agreements. Utilities and insurance policies should also be updated to reflect the new ownership.
Conclusion
Commercial property conveyancing in Melbourne is a meticulous process that requires attention to detail, thorough due diligence and compliance with legal standards. By working with an experienced solicitor and ensuring clear communication, buyers and sellers can navigate the process effectively, minimising risks and ensuring a smooth transaction.