Expertise
Real estate transactions
Transactional advice for real estate investors, developers and occupiers of business premises.
In practice
Our real estate practice
We advise investors, developers and occupiers on the purchase and sale of individual properties and portfolios, on development and construction arrangements and on the lease of business premises. The work draws on our corporate and M&A practice. Where a building is bought through the shares, the buyer also acquires everything in the company, such as old contracts, claims and its tax position. We therefore investigate that company and set out in the purchase agreement what the seller stands behind and what the seller pays if an old debt or tax assessment surfaces later.
Our experience covers logistics and light industrial property, offices, hospitality, retail and residential property.
How we work
Advice, not litigation
Our real estate practice is advisory. We structure, negotiate and document transactions, development arrangements and leases, and we advise on the options when a transaction or a lease does not proceed as agreed. We do not conduct real estate litigation. Where proceedings become likely, we work with specialist firms we collaborate with regularly and remain involved as advisor on the transaction and its documentation.
Key legal & commercial issues
What determines the outcome of a real estate transaction
- 01
The property or the shares
A property can be acquired directly, by notarial deed of transfer and registration in the public registers, or indirectly, by acquiring the shares in the company that owns it. The choice affects transfer tax and VAT, the liabilities that pass with the company, the scope of the due diligence and the timetable, and is made together with tax advisors and the civil-law notary.
- 02
Leases that pass with the property
A sale does not end a lease: under art. 7:226 DCC the buyer steps into the position of the landlord. The rent roll, the terms of each lease, bank guarantees, service charges and any rights of first refusal or purchase options therefore feed into the price and into the warranties the buyer negotiates.
- 03
Development, forward funding and forward commitment
Where a property is still to be developed, the allocation of risk sits in the cooperation, development and construction agreements: who bears the planning, construction and letting risk, when the price is paid and what happens if milestones are not met. In a forward funding or a forward commitment, the position of the investor depends on how those agreements interlock.
- Allocation of planning, construction and letting risk
- Payment of the price against milestones or on completion
- Completion, defects and the transfer of contractor warranties
- Built-to-suit arrangements with a future occupier
- Step-in and termination rights if the development stalls
What we advise on
Specific areas we advise on within real estate transactions
Acquisitions and disposals
Purchase and sale of individual properties and portfolios, as an asset or a share transaction, from letter of intent to transfer at the civil-law notary.
Development and construction
Cooperation and development agreements, construction contracts, development management and built-to-suit arrangements for new-build property.
Forward funding and forward commitment
Investment in property that is still to be built, with the purchase, the development and the payment of the price aligned in one set of documents.
Sale and leaseback
Sale of operational property to an investor with a lease back to the business. Price, rent and lease term are linked: a higher rent or a longer term usually means a higher price, but also commits the business for longer.
Leases of business premises
Leases of business premises in new-build and existing buildings, for landlords and occupiers.
Asset and property management
Agreements for the management of real estate investments, including asset management and property management mandates.
Questions clients ask before instructing us
What happens to existing leases when a property is sold?
They continue. Under art. 7:226 DCC the rights and obligations of the landlord pass to the buyer. A buyer therefore reviews the leases, the rent roll and any security provided by tenants before signing, and the purchase agreement deals with rent, service charges and deposits up to the date of transfer.
What is the difference between forward funding and a forward commitment?
In a forward funding, the investor buys the land at the outset and funds the construction in instalments as it progresses, often with a return on the amounts paid until completion. The developer usually delivers at a fixed price. The investor's main risk lies with the developer itself: if it defaults or becomes insolvent during construction, the investor is left with a half-finished building. The investor therefore takes security and the right to step in and complete the works. In a forward commitment, the investor agrees in advance to buy the completed building and pays the price on completion; the construction and funding risk stays with the developer. In both, the purchase, development and construction agreements have to be aligned.
Is transfer tax due on a share transaction?
It can be. Shares in a company whose assets consist mainly of real estate can be treated as real estate for transfer tax purposes, so a share transaction does not in itself avoid transfer tax. Whether the tax is due, and whether an exemption is available, depends on the facts and is assessed with tax advisors before the structure is chosen.
Does the firm act in real estate litigation?
No. Our real estate practice is advisory: transactions, development arrangements and leases. Where a matter has to be litigated, we work with specialist firms and remain involved as advisor on the transaction and its documentation.
What does the civil-law notary do, and what do we do?
The civil-law notary draws up the deed of transfer, arranges registration in the public registers (art. 3:89 DCC) and usually handles payment of the price through the notary's client account. The notary acts impartially. We act for our client: we draft or review the purchase agreement, negotiate it and coordinate the deed and the completion mechanics with the notary. We work closely with the client's own civil-law notary or with a notarial firm we work with regularly. Our work and the notary's complement each other, and we divide the tasks so as to avoid duplication. A transfer of shares in a BV or an unlisted NV that holds the property also requires a notarial deed.