There’s no denying that acquiring a commercial property remains a reliable and popular way to expand your investment portfolio. However, navigating the complexities of commercial property transactions in South Africa requires more than just basic business skills – it demands the expertise of specialised legal advisors. Let’s dive in.
The field of commercial property law often encompasses a number of other areas of law, including commercial law, banking and finance law, and regulatory and compliance law, to name a few, all of which can apply in the context of commercial property.
Where there is a property element to a transaction, in particular property used for commercial purposes, it is important to use advisors who understand the intricacies of property and the laws pertaining to this field, to ensure that your interests and assets are fully protected.
During commercial property transactions, your specialised legal advisors play a critical role in ensuring that the transaction runs smoothly and ticks all legal boxes. Their responsibilities typically include:
Due Diligence
Legal advisors should conduct thorough due diligence on the property in question, including verifying ownership, reviewing title deeds, checking for any encumbrances or restrictions, and ensuring that the property is free from legal disputes or claims.
Drafting and Reviewing Contracts
Your legal advisor will draft, review, and negotiate contracts related to the sale, purchase, or lease of commercial property on your behalf. This includes sale agreements, lease agreements, and any other contractual documents necessary for the transaction.
Compliance with Regulations
Legal advisors ensure that your property transaction complies with all relevant laws and regulations, including zoning laws, environmental regulations, and municipal bylaws. They may also assist with obtaining necessary permits or approvals if relevant.
Managing Risk
Your specialised legal advisors will help you identify potential risks associated with the property transaction and advise on how to mitigate these risks. This might involve structuring the transaction in a particular way or negotiating specific terms in the contract in order to protect your assets.
Transfer of Ownership
Legal advisors handle the transfer of ownership process, which includes lodging the necessary documents with the Deeds Office, ensuring that all legal requirements are met, and managing the payment of transfer duties and other taxes.
Resolving Disputes
Should any disputes arise during the transaction, your legal advisors work to resolve them through negotiation, mediation, or, as a last resort – litigation.
Financial Structuring
Your team may assist with the financial aspects of the transaction, such as arranging for mortgage bonds, securing financing, or advising on tax implications.
Communication and Coordination
Legal advisors coordinate with other professionals involved in the transaction, such as real estate agents, surveyors, and financiers on your behalf, to ensure that all aspects of the deal are aligned and that timelines are met.
Calling on the expertise of specialised legal advisors, such as the team at Caveat, ensures that your commercial property transaction is legally sound, minimises your exposure, and proceeds without a hitch.
What is the law governing property commercial transactions in South Africa?
The law governing commercial transactions in South Africa is primarily based on a combination of statutory law, common law (Roman-Dutch law), and case law. Laws and regulations applying to commercial property transactions will depend on the nature of the transaction, the identity of the parties and the type of property in question. However, broadly speaking, the legislation that should be borne in mind when dealing with commercial property transactions includes:
- The Companies Act, 2008;
- The Competition Act, 1998;
- The Alienation of Land Act, 1981;
- The Consumer Protection Act, 2008; and
- The Property Practitioners Act, 2019
In light of the complexities of many commercial property transactions, we recommend that you use a team of legal experts familiar with the transaction process and the relevant laws and regulations at play.
Caveat Legal
At Caveat, our commercial property law services include:
Whether you’re a seasoned investor or new to the property market, partnering with a specialised advisor is a sound investment in securing your commercial property interests. Reach out to our Caveat panel members for targeted advice.
- Due diligence investigations
- Sale of letting enterprises
- Sale of shares
- Subscription agreements & shareholders agreements
- Corporate restructuring processes
- Leases & service level agreements
- Joint venture agreements
- Development agreements
- Facility agreements
- mergers and
- other related commercial agreements where there are property aspects at play.