Understanding the Buying Process

Understanding the Buying Process

Once you have found the management rights complex that best suits you we will guide you through the purchasing process as outlined below:

In doing so we are happy to provide you with a list of specialised management rights accountants, solicitors and finance brokers that will protect your interest along the way.

Letter of Offer

We will provide you, as the prospective buyer with a letter of offer document for completion. 

This document summarises your offer for both the business and residence, including the total purchase price.  It also details your purchasing entities, the estimated settlement date, and any specific clauses you would like to include.

Please note that the letter of offer is non-binding and does not incur any costs. We use this document to facilitate negotiations and reach a mutually agreed-upon price before proceeding to the draft contract stage. 

Contract Stage

Draft Contracts - once the price has been agreed the vendor will engage their solicitor to prepare draft contracts to be sent to your solicitor.  This process typically takes up to a week. Once received, your solicitor will go over them with you in detail.

Final Contracts – once both parties are agreeable with the terms and conditions within the draft contracts, final contracts will be executed by the vendors solicitors and sent back to your solicitor for your final approval and signature.  Once signed, the management rights business will be officially under contract.

Due Diligence – Verification of Figures

We will assist your appointed accountant to contact the vendor to arrange a date and time for them to access their accounting records to perform a formal verification of the figures supplied.  This process is to protect you as the purchaser that what you are purchasing is true and correct.  The timeframe for this to be undertaken is 21 days from signing of contract. A report from your accountant will be then supplied to you for your consideration.

 Due Diligence – Legal

Once figures have been verified and you are satisfied with the verification report we move to the next step.  Your solicitor will undertake their verification process to ensure the viability of your purchase and ensure you have a full understanding of all obligations outlined in the agreements.

Finance

If you are borrowing for the purchase of your management rights, your lender will require copies of both verification reports before final approval.

As the finance clause is typically to fall due 42 days after signing the final contracts, we work with you in the initial stages to have a clear indication of your borrowing capacity early on in the due diligence process. 

Once finance has been formally approved from your lender the contract becomes unconditional.

Body Corporate Assignment

Once your contract is unconditional the vendor will notify their body corporate that they have an unconditional sale contract.  You will be expected to provide a resume with references and attend a formal body corporate interview for their approval.  This process can take up to 30 days.  It is important to note the body corporate cannot withhold consent of the assignment without a valid reason ie: bankruptcy and criminal history.

Settlement

Congratulations!  After formal body corporate approval, the settlement is scheduled, usually on the first day of the month for a smooth transition.  Training is undertaken seven days prior and seven days after settlement.

This entire purchasing process typically takes approximately 4 months. While this timeframe may seem lengthy, we are there to guide you through each step of the way in conjunction with your chosen accountant and solicitor.