Commercial Property Purchase in Australia: The Due Diligence Checklist (What to Review Before You Sign)
- Published on
- 9 Apr 2026
A successful commercial property purchase is rarely about finding the “best-looking” property. It’s about understanding what you’re actually buying – income, risk, obligations, and future upside before you commit. Due diligence is where good deals are confirmed and bad ones are avoided.
Here’s what every buyer should review before signing a contract.
1. Core Documents You Must Review
At a minimum, a commercial property purchase should include access to:
- The lease (or leases) including all variations
- Outgoings statements showing what is recoverable
- Disclosure statement from the seller
- Title search and plans
- Zoning certificate
If any of these are missing or incomplete, that’s a red flag in itself.
2. Lease Red Flags That Catch Buyers Out
In commercial property, the lease is the asset.
Key items to scrutinise include:
- Incentives – rent-free periods or fit-out contributions that reduce real income
- Make-good clauses – costly obligations at lease end
- Options – who controls them and at what rent
- Rent review clauses – fixed, CPI, or market (and how they’re structured)
A lease that looks strong on the surface can fall apart once incentives or weak review mechanisms are factored in.
3. Tenant Checks: Who Is Actually Paying the Rent?
Tenant quality matters more than almost anything else.
Before proceeding, review:
- Financial statements (where available)
- Trading history and years in operation
- Industry risk and demand for the business type
- Guarantors or security in place
A long lease means little if the tenant can’t sustain the rent.
4. Building and Compliance Checks
Commercial buyers often underestimate compliance risk.
Key checks include:
- Asbestos reports (especially for older buildings)
- Fire safety and essential services compliance
- Accessibility requirements
- Zoning and permitted use
Non-compliant buildings can trigger unexpected costs, insurance issues, or leasing restrictions.
5. Finance and Tax Questions to Clarify Early
Before exchanging contracts, buyers should confirm:
- Whether GST applies to the purchase
- Land tax exposure and thresholds
- Ownership structure suitability (individual, trust, company)
- Lender requirements tied to the lease and tenant
These items can materially impact cash flow and borrowing capacity.
6. Settlement Timeline: Who Does What and When
A commercial property purchase typically involves:
- Contract review and negotiation
- Finance approval
- Due diligence period
- Exchange
- Settlement
Understanding who is responsible for each step -solicitor, broker, accountant, buyer’s agent – keeps the process smooth and avoids costly delays.
Final Thoughts
Due diligence isn’t about slowing a deal down – it’s about making sure the numbers, risks, and structure stack up. A well-executed commercial property purchase is built on clarity, not assumptions, and the best buyers are the ones who ask the right questions early.
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