Commercial Property Sale — the Legal Framework
The sale of commercial property is never merely a matter of agreeing a price and an object: the Civil Code regulates this transaction with a clear system of obligations, assigning mutual duties, the allocation of expenses and liability in case of defects to the seller and the buyer. This page explains what the law requires of the parties to a contract of sale, who pays the registration and formalization costs, and what rights the buyer has if the object sold turns out to be defective.
When disposing of a commercial object — office, industrial, retail or other income-producing real estate — every detail should be fixed in the contract, because the law gives the parties a general framework while the specific terms are shaped by their agreement. A properly constructed contract is the best instrument of dispute prevention.
The Mutual Obligations of Seller and Buyer
Under a contract of sale, the seller is obliged to transfer to the buyer the right of ownership in the property, the documents connected with it, and to hand over the goods. The buyer, in turn, is obliged to pay the seller the agreed price and to accept the property purchased. These two core obligations form the backbone of the transaction: the seller's duty is not exhausted by handing over the keys — the right of ownership must be transferred, together with every document relating to the property.
If the price is not directly indicated in the contract, the parties may agree on the means of determining it. The law thus gives the parties flexibility — the price-setting mechanism may be tied to the market or to the characteristics of the object — but an imprecise clause of this kind can later become the subject of a dispute, which is why the wording must be exact.
Transaction Costs — Who Pays What
The allocation of costs is regulated differently for movable and immovable property. In the sale of a movable thing, the costs connected with the handing over of the goods — weighing, measuring and packing — fall on the seller, while the costs of receiving and dispatching the goods from the place of conclusion to another place fall on the buyer, unless the contract provides otherwise.
For immovable property — including a land plot — a different rule applies: the seller bears the costs of formalizing the contract of sale, of registration in the public registry and of submitting the documents necessary for this, unless otherwise provided by the contract on the basis of the parties' agreement. In a commercial real estate transaction this norm is particularly significant, since registration and formalization costs may be substantial, and it is precisely this rule that sets the default when the contract is silent.
Sale of a Defective Object and the Seller's Liability
If the thing sold is defective, the seller must either cure the defect or — where the thing is of a generic kind — replace it within the necessary period. The seller bears reimbursement of the expenses necessary to cure the defect, including the costs of transportation, travel, performance of work and materials. The seller may, however, refuse both to cure the defect and to replace the thing if this requires disproportionately great expense. And where the seller hands over to the buyer a defect-free thing for the purpose of curing the defect, the seller may demand the return of the defective thing.
The limitation of liability is likewise regulated by law: the seller's liability for the sale of a defective thing may be limited or excluded, but such an agreement is void if the seller deliberately concealed the defect. In a commercial property transaction this means that a disclaimer clause is lawful only where the seller acts in good faith and does not remain silent about the defect.
Serial Transactions and Standard Terms
Sales of commercial property often proceed as a series: one seller sells objects to many buyers on identical terms. The standard clauses of a template contract then need particular control: a complete exclusion of the seller’s liability is void, and a single void clause can put the whole contract at risk.
The basis of every contract in the series is the general model of sale — the obligation to deliver, acceptance of the property and payment of the price; only the object and the individual terms vary. A well-drafted base contract for serial sales, legally reviewed once, therefore reduces the cost of every subsequent transaction.
Frequently Asked Questions
Who bears the registration costs of immovable property?
By default, the seller: the costs of formalizing the contract, of registration in the public registry and of submitting documents fall on the seller, unless the parties provide otherwise by agreement in the contract.
What right does the buyer have if a defect is discovered?
The buyer may demand that the defect be cured or the thing replaced; the seller bears the costs connected with the cure. The seller may refuse only where the cure or replacement requires disproportionately great expense.
Can the contract exclude the seller's liability?
Yes, but the agreement is void if the seller deliberately concealed the defect. A disclaimer therefore does not protect a seller who concealed even minimal information about the defect.
How important is it to state the price in the contract?
If the price is not directly indicated, the parties may agree on the means of determining it. The precision of that mechanism is decisive for avoiding disputes, so in a commercial transaction the price and the payment procedure should be defined clearly.
How We Help on Legal.ge
The Legal.ge team assists you at every stage of a commercial property sale: we draft the contract of sale so that the parties' obligations, the allocation of costs and the liability regime for defects are regulated in accordance with the law; we examine the public registry for rights and encumbrances affecting the object; and in case of breach we defend you through the proper collection of evidence and representation in court. Contact us on Legal.ge — your commercial transaction will be legally protected.