Commercial real estate due diligence checklist
Commercial real estate acquisitions involve layered risk — title defects, tenant disputes, environmental contamination, and planning non-compliance can each destroy value. This checklist structures the legal due diligence across the key workstreams for an Australian commercial property transaction.
This is a 12-step due diligence checklist for commercial real estate acquisitions in Australia. It covers title review, tenant leases, planning compliance, environmental risk, and settlement preparation.
The checklist
Obtain title and plan searches
Order current title searches and registered plans from the relevant state land registry to confirm ownership, lot boundaries, and all registered interests.
Review all registered encumbrances
Analyse every easement, covenant, restriction, mortgage, and caveat registered on the title. Assess impact on intended use.
Review tenant leases
Obtain and review all current leases, licences, and agreements for lease. Check rent review mechanisms, option terms, assignment provisions, and make-good clauses.
Verify tenant compliance
Confirm tenants are current on rent and outgoings. Obtain estoppel certificates or landlord statements confirming lease status.
Check planning and zoning
Obtain the applicable planning certificate and confirm the current use is lawful under the relevant zoning and development controls.
Review development approvals
Obtain all development approvals, building permits, and certificates of occupancy. Confirm no outstanding conditions or compliance actions.
Assess environmental risk
Conduct a Phase 1 environmental site assessment or review existing reports. Check contaminated land registers for the relevant state.
Review building condition
Obtain a building condition report covering structure, services, essential safety measures, and any deferred maintenance.
Verify insurance coverage
Review current building insurance, public liability, and any landlord insurance policies. Identify gaps or underinsurance.
Check outgoings and rates
Verify all outgoings including council rates, land tax, water rates, and body corporate or strata levies. Confirm apportionment method.
Assess stamp duty and tax
Calculate stamp duty on the acquisition, including any land-rich entity or foreign purchaser surcharges. Consider GST treatment of the sale.
Prepare settlement checklist
Compile a settlement checklist covering title transfer, tenant notices, key handover, insurance transfer, and post-settlement registrations.
When this checklist applies
Use when conducting due diligence on a commercial, industrial, or retail property acquisition in any Australian state or territory.
Common pitfalls
- Not verifying lawful use under current planning controls
- Overlooking tenant lease assignment or change-of-control restrictions
- Failing to check contaminated land registers
- Underestimating make-good obligations in existing leases
- Missing land tax surcharges for foreign purchasers
Run this checklist on a real matter
Quillio can review lease portfolios, flag assignment and change-of-control clauses, and summarise planning certificates across multi-property transactions. See /practice-areas/commercial or start a free trial.
General commercial real estate guidance only. Due diligence scope varies by state, property type, and transaction structure — obtain specific legal advice.
Use this checklist on your matter.
Quillio can run this checklist on a specific NSW conveyancing matter — confirm each item, calculate adjustments, and generate the supporting documents. The free trial requires no credit card.
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