Australian commercial property contracts are not consumer contracts. Cooling-off periods, the Australian Consumer Law and unfair terms protections that apply to a residential buyer are largely absent here. That makes the drafting — and the pre-exchange due diligence — the entire game. Most commercial property disputes that reach court involve disclosure failures, GST errors, and vendor warranties that didn't survive settlement. All three should be addressed in the contract of sale before anyone signs.
What is a Contract of Sale?
A commercial property contract of sale is a state-based agreement transferring ownership of non-residential real estate (office, retail, industrial, development sites, rural). The core framework is state-specific: the Conveyancing Act 1919 (NSW) and Contracts for Sale and Purchase of Land (NSW standard), the Sale of Land Act 1962 (Vic), Property Law Act 1974 (Qld) and equivalents in SA, WA, Tas, ACT, NT. GST under A New Tax System (Goods and Services Tax) Act 1999 applies to most commercial sales unless the going-concern or margin-scheme rules are triggered. Foreign Investment Review Board (FIRB) approval may apply to overseas buyers.
Red flags to watch for
GST is typically 10%. On a $5m sale that is $500,000. The contract should state whether the price is plus/inclusive of GST and which GST treatment (taxable supply, going concern, margin scheme) applies.
The going-concern exemption requires a fully operating enterprise transferred with all necessary elements. A recently vacated property rarely qualifies.
Some vendors agree to warranties that survive only to settlement. Defects discovered afterwards have no contractual remedy. Survival of 6–24 months is standard.
EPA contamination listings can tank a site's value. Vendors should disclose known contamination and allow access for environmental due diligence pre-exchange.
Broad vendor rescission rights let the seller walk away if market moves. Rescission should be tied to objective events, not convenience.
Deposits should be held in a trust account that can only be released jointly or on clearly stated events. Single-control trust accounts are a risk.
Day-of-settlement adjustments can swing five-figure amounts on commercial properties. The clause must detail what is adjusted and how.
Your legal rights
Australian commercial property contracts are governed by state land-law and conveyancing legislation. Vendor disclosure obligations are narrower than residential — for example, the vendor statement (s.32 statement) requirement under the Sale of Land Act 1962 (Vic) applies to residential and small rural properties only. Under the Competition and Consumer Act 2010 (Cth), misleading or deceptive conduct in trade or commerce (s.18 ACL) applies to commercial property transactions, giving buyers a remedy if the vendor misrepresents key facts. GST rules are set by A New Tax System (Goods and Services Tax) Act 1999. Foreign buyers must comply with the Foreign Acquisitions and Takeovers Act 1975 and FIRB rules. Retail leases attached to the property are regulated by state retail-leases legislation (e.g. Retail Leases Act 2003 (Vic)).
Questions to ask before you sign
- 1How is GST treated — inclusive, plus, going concern, margin scheme — and on what evidence?
- 2Do vendor warranties survive settlement, and for how long?
- 3What environmental, planning and zoning disclosures has the vendor made?
- 4What tenancies are in place, and are they disclosed with full copies of leases and schedules?
- 5How is the deposit held, and what are the release conditions?
- 6What adjustments apply at settlement (rent, outgoings, land tax), and how are they calculated?
- 7What rescission rights does each side have, and on what triggers?
Disclaimer: This guide is for educational purposes only and does not constitute legal advice. Contract law varies by jurisdiction and individual circumstances. Always consult a qualified legal professional before making decisions based on this information.