Vojdani Lawyers
Buying and Selling Commercial Property
At Vojdani Lawyers, we advise buyers and sellers across all classes of commercial property, helping clients navigate transactions with clarity, compliance, and confidence.
What Makes Commercial Property Transactions Different?
Commercial property transactions are governed by a different legal and commercial framework to residential sales. Buyers are expected to undertake a higher level of due diligence, while sellers must comply with more extensive disclosure obligations.
Recent reforms, including the commencement of the Property Law Act 2023 (Qld) (the Act) on 1 August 2025, have fundamentally changed the disclosure landscape. While residential sales often use standard terms, commercial contracts are frequently bespoke, meaning the protection of your interests depends entirely on the specific drafting of special conditions.
Seller Disclosure Obligations
Important High-Value Exemption: Under the new Act, if the purchase price is more than $10 million (including GST), the buyer can provide a written notice to the seller waiving the requirement for a Form 2 Disclosure Statement. This recognizes that in high-value commercial deals, the parties are often sophisticated and prefer to rely on their own extensive due diligence.
Typical Disclosure Documents for Commercial Property
| Disclosure Area | What Is Required |
|---|---|
| Title and survey | Current title search, plan, and encumbrances |
| Council and planning | Rates (gross amounts), zoning, and planning approvals |
| Energy Efficiency | Building Energy Efficiency Certificate (BEEC) for offices >1,000m² |
| Tenancies | Copies of all leases, licences, and rent rolls |
| Building Compliance | Owner-builder notices (if work was done in the last 6 years) |
GST and Tax Considerations
The Importance of Leases and Tenancies
Release of Liability (The "Chain" Rule):
A critical change under Section 144 of the new Act affects how tenants and guarantors are released from liability. Under the previous law, an original tenant could remain “on the hook” indefinitely through multiple future assignments. Now, an automatic release is triggered upon a subsequent assignment:
- Initial Assignment (Tenant A to Tenant B): Tenant A and their guarantor generally remain liable for breaches committed by Tenant B.
- Subsequent Assignment (Tenant B to Tenant C): Once Tenant B assigns the lease to Tenant C, the original Tenant A and their guarantor are automatically released from any liability for breaches committed by the new Tenant C.
This “one-step-removed” release significantly changes the risk profile for landlords, who must now vet the first assignee (Tenant B) with extreme rigour, as their original “backup” security (Tenant A) will disappear if the lease is assigned a second time.
Due Diligence: A Critical Stage
How Vojdani Lawyers Can Assist
We advise both buyers and sellers throughout Queensland, assisting with:
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Custom contract drafting and “going concern” GST structuring;
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Ensuring Form 2 compliance to prevent late-stage contract termination;
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Navigating the new 2025 lease assignment and “Chain of Liability” release laws; and
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Coordinating settlement adjustments for complex commercial outgoings.
Frequently Asked Questions
Are commercial property contracts negotiable?
Yes. Commercial property contracts are generally negotiable and can be tailored to the transaction. Commonly negotiated terms include price, deposit, due diligence, settlement timing, lease arrangements, warranties, and special conditions. Because commercial transactions vary widely, legal advice should be obtained early to manage risk before the contract is signed.
Does GST apply to commercial property transactions?
GST may apply to the sale of commercial property, depending on the nature and structure of the transaction. In certain circumstances, the GST treatment can be modified or mitigated, such as where the sale qualifies as a going concern (typically where the property is sold with the benefit of an existing tenancy) or where the margin scheme applies. Each of these options is subject to specific legislative and regulatory requirements, and the relevant GST treatment must be clearly agreed between the parties and correctly documented in the contract. Incorrect or unintended GST treatment can give rise to significant financial and compliance consequences; parties should therefore obtain appropriate legal and taxation advice before entering into the contract to ensure that the GST position is properly understood and reflected in the transaction documentation.
Can a buyer terminate a contract for disclosure issues?
Yes. Under the seller disclosure regime, a buyer may have a right to terminate if the required disclosure statement (Form 2) is not provided before the contract is signed. If the disclosure statement is provided but is inaccurate or incomplete, a buyer may also have a right to terminate where the defect is material and causes prejudice to the buyer. This will depend on the nature and significance of the inaccuracy and must meet the statutory test. These rights are subject to strict timeframes and procedural requirements. It is important to obtain legal advice promptly, as a failure to act within the prescribed period may result in the right to terminate being lost.
Does the seller disclosure scheme apply to high-value transactions?
The disclosure regime may not apply where the purchase price exceeds $10 million and the buyer provides a compliant waiver notice before entering into the contract. In those circumstances, the buyer effectively agrees to proceed without the benefit of the statutory disclosure requirements. However, the waiver must be properly prepared and given before the contract is signed in order to be effective. Care should be taken when relying on a waiver, as it removes important statutory protections and shifts greater risk to the buyer.
What happens to a tenant’s bond or security at settlement?
At settlement, the benefit of any tenant security, such as a cash bond or bank guarantee, is transferred to the buyer as the incoming landlord. Where a cash bond is held, this is typically adjusted in the settlement statement so that the buyer effectively assumes the seller’s obligation to the tenant. Where a bank guarantee is in place, it is usually assigned to the buyer or re-issued in the buyer’s favour. It is important that the contract and settlement arrangements properly deal with the transfer of security, as this affects both the buyer’s protection and the seller’s release from ongoing obligations.