Buying commercial property is one of the largest investments a business or individual will ever make, and the legal groundwork matters just as much as the purchase price. Commercial transactions tend to be more complex than residential ones, with issues around title, planning, tax, tenants, and environmental compliance all capable of turning a promising deal into an expensive problem. This is where due diligence comes in.
Due diligence is the detailed investigation carried out before you commit to a purchase. Its purpose is simple: to confirm that you are getting what you think you are paying for, and that there are no hidden liabilities attached to the property. Our commercial conveyancing team carries out this work on behalf of buyers on a regular basis, and the same lesson emerges time and again, which is that problems uncovered before contracts are signed are far cheaper to resolve than those discovered afterwards.
Investigating title
Title investigation is the cornerstone of any commercial acquisition. Your solicitor must establish that the seller actually owns the property, that they are entitled to sell it, and that the title is free from any burdens that could affect your intended use.
Since the introduction of the Law Society of Ireland’s 2019 General Conditions of Sale and Requisitions on Title, title is now investigated fully before contracts are signed rather than afterwards. This gives buyers a proper opportunity to review the position and raise queries before committing. The investigation will consider:
- Whether the title is freehold or leasehold, and the terms of any lease under which the property is held.
- Rights of way, wayleaves, easements, and covenants that benefit or burden the property.
- Mortgages, charges, judgments, or other encumbrances that must be discharged on completion.
- The boundaries and folio, which can be checked against the register maintained by Tailte Éireann and viewed through landdirect.ie.
We always advise our clients to treat a boundary or access issue as significant, however minor it may appear at first, because commercial use often depends on unimpeded access for staff, customers, and deliveries.
Planning and building control
Planning compliance is a frequent source of difficulty in commercial transactions. You will want to be satisfied that the property has the benefit of all necessary planning permissions, that any conditions attached to those permissions have been complied with, and that the current use is authorised.
Your solicitor will review the seller’s replies to the planning requisitions, examine any certificates or opinions on compliance with planning and building regulations, and requisition planning searches. Where the intended use differs from the existing use, a change of use may itself require permission. We strongly recommend that buyers commission an appropriately qualified surveyor or engineer to carry out a physical inspection, because a certificate of compliance is only as reliable as the survey that supports it.
Tax considerations
Commercial property carries a distinct tax profile, and the figures are material to any deal.
Stamp duty on non-residential property is currently charged at 7.5%, as set out by Revenue. The return must be filed and the duty paid within the statutory deadline following execution of the deed.
Value Added Tax is the area that most often catches buyers by surprise. The sale of a commercial property may be subject to VAT, generally at 13.5% on new or developed buildings, while older properties are frequently exempt. The rules are technical, and the parties can in certain circumstances jointly opt to tax a sale that would otherwise be exempt. Revenue’s guidance on VAT and property sets out the framework, and we always advise clients to take tax advice early, because the VAT treatment can affect both the price and the stamp duty payable.
Energy rating and environmental checks
A valid Building Energy Rating certificate is required whenever a commercial building is sold or let, as explained in the Law Society’s practice note on BER certificates and by the Sustainable Energy Authority of Ireland. You should obtain the certificate and its advisory report before completion.
Environmental due diligence is equally important for commercial sites. Your solicitor will review replies to the environmental requisitions, and where the property has an industrial history, a specialist environmental survey may be prudent to identify contamination, flood risk, or waste licensing issues that could give rise to significant remediation costs.
Tenants and existing leases
If you are buying an investment property with tenants in place, the leases become central to the value of your purchase. You will need to understand the rent, the length of the term, review provisions, repairing obligations, break options, and whether any tenant enjoys statutory protection or a right to renew. Rent arrears, disputes, and the standing of each tenant should all be verified before you commit, because you are buying the income stream as much as the building.
A practical due diligence checklist
Before signing contracts, our commercial conveyancing team would expect to have addressed each of the following:
- Full investigation of title, including all burdens, rights, and encumbrances.
- Confirmation of planning permission, compliance with conditions, and authorised use.
- Certificates of compliance with planning and building regulations, supported by a professional survey.
- Clarity on stamp duty and the VAT treatment of the transaction.
- A valid BER certificate and any necessary environmental assessment.
- Review of any leases, tenancies, and service charge arrangements.
- Completion of all relevant searches, including planning, judgment, and, where applicable, licensing searches.
How we can help
Commercial property due diligence is not a box-ticking exercise. It is a structured investigation that protects your investment and gives you the confidence to proceed, renegotiate, or walk away on an informed basis.
At McCarthy + Co Solicitors LLP, our commercial property team advises buyers, sellers, and investors across Ireland on transactions of every size, guiding you through title, planning, tax, and every other legal aspect of your purchase. If you are considering acquiring a commercial property and would like experienced guidance, please complete our quick online form and a member of our team will be in touch.
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