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Commercial Property

See Also: Residential Property

Two of our Partners, Mike Newdick  and John Stirling, have had combined experience of over 40 years in the commercial property area.

This includes acting for the Vendors and Purchasers of investment properties and those seeking to complete development of commercial properties.

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Commercial Property Aquisition

Our services include assisting clients in drafting the initial Agreement for Sale and Purchase incorporating the various conditions such as due diligence, finance and resource consent which may be applicable to the transaction.

Commercial Property Due Diligence

We assist in the formation of a team of professionals who are required to assist the client in completing a comprehensive due diligence programme.  The size and composition of the team will depend on the complexity of the transaction.

This team may comprise lawyers, resource management consultants, valuers, accountants and funding representatives which examine the transaction to ensure the client is obtaining the bargain it contracted for. 

For example, a lease may be reviewed as to its terms and conditions by a solicitor to confirm the contract is binding on the parties, and an accountant may review the financial standing of a tenant or its guarantors to ensure the security of rental payments.

Funding & Securities

We assist in the preparation of financial applications to funders and in structuring of priorities of properties, collateral securities and guarantees.

This aspect requires the assistance of valuers to form part of the due diligence team to ensure the project passes any scrutiny by the funder, and the structure can be sustained from a legal perspective.

We also advise on the structuring of funding to ensure there is minimisation of collateral securitisation of a client’s assets as far as possible to ensure each transaction stands on its own.

We would also normally take responsibility for completion of the security documents for our funder and explaining these to the client to ensure all obligations are fully understood.

Settlement

One of the main roles of a law firm is to ensure clear title is passed to the purchaser on settlement.  This includes liaising with all charge-holders of a vendor to ensure any mortgages and other charges are surrendered on settlement.

Taxation

To advise on the implications of a transaction from a taxation perspective, normally in conjunction with the client’s accountant or tax advisors.  For example, in the case of a commercial property transaction, it may dramatically effect the party’s cash flow requirements as to whether the transaction is zero rated for GST or GST is required to be funded and claimed back from the Inland Revenue Department. 

Where a client has multiple trading entities there may be issues relating to the associated persons rules which require careful attention to ensure unforeseen taxation implications are not incurred by non-trading entities.

Compliance

Ensuring any compliance issues are considered such as overseas investment commission consent for coastal transactions.

Leasing

Leasing is an important aspect of any commercial property transaction particularly if a purchaser is relying upon the cash-flow generated by a lease to service borrowings against the property.  It is vital to check the terms and conditions of the lease to ensure all documentation in a legally binding form is available and enforceable against the parties to the leasing arrangement.  The financial viability of a tenant must be carefully considered to ensure they have the financial capability to honour the commitments they have undertaken under the lease.  Many funding agencies will require comprehensive details of the leasing arrangements in respect of the property as part of their conditions for making an advance.

Resource Management

This is a complex area of the law and we would normally brief a resource management consultant to review any resource management issues which arise in the course of a transaction.  We recognise certain areas of the law require third party input and are only too happy to adopt a working relationship with such consultants.

Development

We have had significant experience in the development of land, residential dwellings and commercial dwellings.  This includes professional services in:

  1. Preparation of pro-forma Sale and Purchase Agreements;
  2. Pro-forma Leasing Agreements;
  3. Liaising with funders to ensure conditions of funding are met; and
  4. Providing advice on the commerciality of a proposed transaction at a preliminary stage.

Sales

We recognise the different issues which a vendor of commercial property must consider when negotiating a sale of an investment property.  These initially involve considering the correct sale process to maximise the return of the property and considering the legal documentation required for each marketing process.  E.g., auctions, tenders, general sales and private sales.

Business Risk/ Instructions

It is extremely important to ensure that business risks relating to commercial transactions, including property, are mitigated using recognised and acceptable legal tools.  These include: 

Constitutions/ Shareholders Agreements

Advising on constitutions and more particularly the shareholder agreements when there are multiple shareholders in an entity.

Unit Title Developments/ Body Corporate

This is a developing area of law arising from the increased popularity of apartment developments throughout the Auckland region.

When conducting a development careful drafting of Body Corporate Rules will ensure the quality of the development is maintained and there are no adverse restrictions on the type of tenants which ultimately reside in commercial industrial developments.

In the case of residential developments, ensuring the Body Corporate Rules and Plan correctly and adequately define the type of development albeit a low density development of a residential nature whereby owners or occupiers want greater individual freedoms and large scale developments which require controls to ensure a uniform image and quality is maintained.

Subdivisions

Subdivisions are a significant way of adding value to properties and require a team of professionals including surveyors, engineers and lawyers to ensure maximum value is gained from a subdivisional development.

Consideration of future development controls in the form of restrictive covenants that run with the land.

Turner Hopkins has a team of highly experienced conveyancers who have specialised in subdivisional conveyancing for a number of years.  Our size and structure means that we can invariably provide to our clients the very highest standards of service and efficiency whilst ensuring the most commercially acceptable result. 

Rural

Rural properties have their own unique nature and requirements when addressing funding, leasing, development and ownership.

Auckland's North Shore has a significant rural hinterland. We have experience in dealing with rural properties of most natures including grazing land, horticultural land, dairy farming and forestry investments.

See Also: Residential Property

 

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