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Commercial Property
 

New sunset clauses law protects purchasers by overriding vendor rights to end an off the plan Contract

The new sunset clauses law in NSW is proving useful to property purchasers in a rising market by allowing them to override the vendor’s use of the sunset clause, and to enforce an off the plan contract.

Click for full details

 

If you are moving out of a shop or office, do you repaint or leave it as is?
If you own or rent a shop, office, warehouse or factory, the ‘make good’ covenant in the lease usually requires the tenant to repaint the inside. The question is, can the landlord recover what the cost of repainting would be, without actually doing the repainting?

For more click - If you are moving out of a shop or office, do you repaint or leave it as is?

 

When buying commercial property, you need to know if the price inclusive or exclusive of GST
If you buy a meal, groceries, petrol, and so forth, GST of 10% is included in the price. In fact, the prices of consumer items must include GST, by law.

With real estate it's different. This is a quick guide:

  • Second-hand residential property sales - houses, apartments, villas - no GST is payable
  • New residential property sales - off the plan or newly completed - GST is payable by the vendor, and it is included in the price
  • Commercial property sales - shops, warehouses, offices - normally, no GST is payable if sold subject to lease, but GST is payable by the purchaser if sold vacant
  • Land sales - farms, vacant land, acreage - GST may or may not be payable by the purchaser depending on whether used for farming, whether sold in the course of an enterprise, or whether the vendor is or needs to be registered for GST

As you can see, when buying commercial real estate, knowing whether the price is treated as GST inclusive or GST exclusive is essential.

Otherwise, as purchaser you may receive a nasty surprise and need to find another 10% on top of the price to pay the GST. This cash outlay for the GST will need to be carried until the next BAS statement is lodged, and a credit is claimed. Also, to add insult to injury, extra stamp duty is payable on the GST.

The GST treatment needs to be properly covered in the Contract for Sale.

If not, a dispute may arise which goes to Supreme Court to decide whether the price was inclusive or exclusive of GST. To see what happened in a recent case, click my article - Watch out for the GST hazard when buying commercial property


Off the plan purchasers can breathe easy - the new sunset clauses law has teeth!
Property Developers will need to be a bit smarter if they are thinking of using sunset clauses to terminate a sale contract
 

Keep an eye on the sunset date if you are buying off the plan
What happens at the sunset date?
 

Is the landlord responsible for unsafe electrical supply?
One of the beautiful things about being a commercial landlord is that you hand over the premises to the tenant ‘as is’. There is no obligation on a commercial landlord to make the premises ‘fit for purpose’
 

Why landlords and tenants face special risks when leasing strata shops, offices and industrial premises
This article covers four commercial leasing issues for strata shops, offices and industrial premises-
Building repairs; Tenant signage and fit-out; Strata Levies; Tenant use and trading
 

Director Guarantees in Commercial Leases – What damages are recoverable?
What financial exposure does a director undertake by providing a personal guarantee the performance of a commercial property lease?

Bankers must get on with the job of selling a property security as mortgagee in possession … or face the consequences
Bankers have always assumed that they have all the time in the world to sell a property under a power of sale, without liability for loss because of delay. This assumption is no longer correct.


Does the bankruptcy of a personal trustee or appointor of a discretionary trust expose the trust assets?
The trustee in bankruptcy cannot seize the family trust assets for the benefit of creditors.
 

Joint Ventures for Real Estate Investment and Development
If two people combine their knowledge and their money in a property venture, they will often achieve more as partners than they would achieve on their own.


 

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