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Building Certification when selling a commercial property

Following on from our previous article on building certification when purchasing a commercial property, it is equally important as a vendor to check that your building is certified and this has been done correctly. Failure to do so can have serious consequences.

Any building constructed after 1 April 1975 is subject to the Building Act 1975 (Qld) (“Building Act”) and requires a certificate of classification, regardless of whether it is residential or commercial.

The lack of a certificate means the building has not been approved as constructed in accordance with the development approval and there may be significant consequences under the Building Act. Alternatively the building may have been certified but is being used for a different use to that it was certified for, which again can have significant consequences.

If your building was constructed prior to 1 April 1975 then no certificate will exist and this is acceptable.

As a vendor you must check your records to locate the certificate, or if one is not held arrange for a search to be undertaken with your local council.

A standard REIQ contract for commercial land and buildings usually requires the certificate to be handed over at settlement, so if there is not one for a post 1 April 1975 building a buyer can refuse settlement or seek damages for your failure to settle in accordance with the contract.

The costs of having a building completely certified years after the fact can be a long and costly process to engage certifiers and buildings, in addition to any costs or damages issues that arise with a buyer under a contract.

Lately Hatzis Lawyers has encountered a number of properties where issues with certificates are arising, so we strongly recommend seeking advice on these matters should you intend to sell a commercial property. To be safe a vendor should always check this before signing a contract, as by then it may be too late.

Moving forward

Selling a commercial property is not always a straightforward process and so we always recommend seeking legal advice before signing any contract.

If you have any questions about or require any advice on selling a commercial property, feel free to contact our Commercial Team for advice and assistance on 3345 4388 or at commercial@hatzis.com.au  

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