REALWorld Law

Sale and purchase

Steps in the transaction

What are the normal steps involved in a real estate transaction?

Angola

Angola

The procedure for the granting of surface rights (the most common title) is organized by the Instituto Geográfico e Cadastral de Angola (Geographical Institute of Angola). The procedure for the acquisition of such rights is as follows:

  • Phase 1: Filling the application for the granting of surface rights. The application must specify (a) the location of the plot of land, (b) the use that will be made of the plot of land, (c) the price and (d) information on any other surface right granted.
  • Phase 2: Gathering information and reports on suitability of the plot of land, any third-party rights, term and phases of the use of land in accordance with the type and volume of construction, additional clauses for the agreement adjusted to the purpose of the concession.
  • Phase 3: Interim Decision. The procedure may be dismissed or if there is no reason for dismissal, the plot of land will be marked out.
  • Phase 4: Decision. The concession decision will set forth the conditions to which the right will be subject and may determine a deadline during which the concession will be provisional. This is also the time to decide whether a public auction must take place. If not public auction takes place the applicant must confirm within ten days the acceptance of the concession under the terms set forth by the concessionaire. Specific rules apply in case a public auction takes place.
  • Phase 5: Final marking out of the plot of land. Topographic operations that allow the full identification of the plot of land and its location by marking it out with marks made of cement or stone.
  • Phase 6: Public deed of concession. Granting of the public deed. Issuance of the concession decision followed by publication in the Official Gazette.
  • Phase 7: Payment of the price. Depending on the pre-existence of a public action, payment shall be done as follows: if there was a public action payment shall occur under the terms of the procedure of such public action. In case public action was waived by the authorities, payment slips must be obtained 5 days from the gazetting of the concession decision.

The concessionaire must register the concession deed with the Real Estate Registry being all costs bear by the applicant now owner of a surface right.

Argentina

Argentina

Contract: An Agreement is entered into by the parties to the transaction. This agreement is denominated (Boleto de Compraventa) and signatures are notarized. The parties are free to determine the terms. Usually the buyer pays a deposit to the bank account indicated by the seller. The document may provide for a time limit to sign the deed, the law does not provide for it.

Public Deed: A notary issue a public deed containing the terms of the agreement.

Registration: Title is registered before the Land Ownership Register. This is done by notaries.

Australia

Australia

Following the investigation of title, the parties will enter into a formal contract for the sale and purchase of the property.

There will usually be a period between the date of contract and the date when settlement (financial close) occurs and title transfer takes place. The contract will set out the documents that must be entered into at completion, including the formal transfer and any other related documentation.

Belgium

Belgium

Deals are either structured as share purchases or asset purchases, i.e. a buyer can either purchase real estate directly or buy the shares in the company owning the real estate.

Share deals are often chosen to avoid registration duties, but have other disadvantages.

Buyers carry out due diligence, which is particularly important for assessing any environmental issues and liabilities. In addition, due diligence provides an opportunity to verify whether there are any liens on the real estate. Due diligence typically takes place prior to the execution of the contract, but the parties are free to agree for it to be carried out afterwards. The contracts will then normally contain specific protection measures for the buyer during the due diligence period, such as an exclusive right to buy.

In a share deal transaction, parties will negotiate a share purchase agreement regarding the shares of the property company. The share purchase agreement is a private agreement that does not have to be notarised. Signing and closing of the share purchase can occur at the same time, but closing can also occur at a later stage, after satisfaction of conditions precent and/or pre-closing items.  

In an asset deal transaction, parties will typically sign a private sale and purchase agreement. The contents of the private sale and purchase agreement will then be duplicated in a notary deed. An asset deal must be effected by a deed executed in the presence of a notary public, within four months of the signing of the initial agreement. The deed must be presented to the Administration of Legal Security. The applicable registration duty must be paid within the same four-month period. In Belgium these obligations do not apply to share purchase agreements.

Common elements of contracts for both asset and share deals include a description and identification of the parties and the subject of the contract (ie the real estate or shares being sold), as well as a clear description of the price. A sale and purchase agreement comes into existence and is binding on the parties when there is an agreement between the seller and the purchase on the price and the property sold.

Asset deals

The first stage of an asset deal is the drafting and signing of a private sale and purchase agreement (compromis de vente/verkoopcompromis). Parties can also enter into a preferential agreement (voorkeurscontract / pacte de preference) or option agreement or unilateral promise (optiecontract of eenzijdige contractbelofte / contrat d’option ou promise unilatérale de contrat). Pursuant to a preferential agreement, a party undertakes to give priority to the beneficiary if it were to decide to enter into an agreement. Pursuant to an option agreement or unilateral promise, a party gives the beneficiary the right to decide to enter into an agreement with it, the essential elements of which have already been agreed between the parties.

Finally, parties can also enter into mutual promise of sale and purchase (the so-called cross “call” and “put” options). This is an agreement in which two unilateral commitments, i.e. the promise to sell and the promise to purchase, are mutually agreed upon. First, the promise to sell can be exercised by the purchaser within a certain period of time. If not exercised, the promise to purchase becomes effective and can be exercised by the seller. In principle, the purchase becomes effective when one of the options is exercised.

Share deals

A share deal only transfers ownership of the company owning or holding the real estate. A notarial deed is not required, and a private agreement is sufficient.

Bosnia-Herzegovina

Bosnia-Herzegovina

In general, there are three different approaches to the acquisition of real estate in the Federation of Bosnia and Herzegovina (FBiH):

  • direct acquisition of real estate (asset purchase);
  • the purchase of all, or part, of an enterprise holding real estate; or
  • the acquisition of the company holding title to the property (share purchase).

Asset purchase means that the real estate in question is directly purchased from its owner. Ownership rights are transferred upon registration in the land registers.

Real estate can also be acquired indirectly through the purchase of an enterprise (share purchase) under the Law on Commercial Companies.

In this way the owner of the business interest acquires the rights and liabilities of the local company owning the real estate.

A share purchase is normally a better way of purchasing real estate, since the buyer does not pay VAT or tax on the transfer of ownership.

Brazil

Brazil

First, a due diligence should be carried out, which is detailed in the next section.

As a general rule, real estate acquisitions must be executed by public deed. However, there are two exceptions to this rule, allowing the execution by contract: the execution of a fiduciary sale agreement (alienação fiduciária), which has the force of a deed; and transactions of properties whose value does not exceed the amount equivalent to 30 minimum wages.

The purchase and sale of real estate requires the presentation of the applicable certificates and the payment of the property transfer tax (ITBI – Imposto de Transmissão sobre Bens Imóveis). The seller usually presents certificates, while the buyer pays the tax and deed expenses.

After that transfer is executed, the deed or the equivalent instrument (such as private instrument of fiduciary sale agreement) must be registered with the relevant real estate registry office. Taxes and registry fees may apply.

For the acquisition of rural properties (farming, livestock, extractive, agricultural, agri-industrial or forest) and emphyteutic properties (already mentioned above), the transfer must also be registered with other public agencies, namely National Institute for Colonization and Agrarian Reform INCRA (Instituto Nacional de Colonização e Reforma Agrária) and SPU (Secretaria do Patrimônio da União), respectively.

Commonly, before the execution of the purchase and sale agreement, the parties may sign a preliminary agreement – the instrument of purchase and sale commitment, by which the parties obligate themselves to execute the purchase and sale agreement, establishing the price, form of payment and other conditions of the deal. Though the execution of the commitment is not mandatory, it may be executed by public deed or by private instrument.

Canada

Canada

After reaching agreement on the purchase price and other fundamental terms of the transaction, the parties negotiate and enter into a formal contract of purchase and sale. There will usually be a period of time between the date of contract and the date that money is paid and title transfer takes place, called ‘closing’ or ‘completion’. The contract will set out the documents that must be entered into at closing, including the formal transfer and any other related documentation.

China

China

The normal steps involved in a real estate transaction are as follows:

  • The parties in large real estate transactions will normally enter into a set of heads of terms or a memorandum of understanding.
  • For a purchase by individuals of residential property from real estate developers, the developer will require an irrevocable purchase order which will provide a long stop date for the conclusion of the sale contract, and under which the purchaser will pay a deposit on the property. If the sale contract is not signed, the irrevocable purchase order will cease to be binding and the deposit will be forfeited.
  • Purchasers in large real estate transactions will undertake due diligence so as to identify problem areas and seek remedies in definitive documentation.
  • For individual purchasers of residential units, the parties will enter into a sale and purchase agreement (or in some cases, a pre-sale agreement) based on a standard form provided by local real estate administrative authorities. For large transactions, the parties will usually enter into another more detailed contract.
  • The parties will submit the duly executed pre-sale agreement (if any) and sale and purchase agreement to the relevant local land bureau for registration. The land bureau will issue a property title certificate in the name of the purchaser. If the purchase is made with borrowed finance, a mortgage over the property will usually be granted at the same time.

The processes of registration of local land bureaus may vary from region to region.

Colombia

Colombia

The following steps are the most common in real estate transactions in Colombia:

  • Negotiation and agreement – The seller and buyer agree on the essential terms of the sale, including price, payment terms, delivery date and other relevant aspects.
  • Due diligence – The buyer conducts a thorough investigation of the property and its documentation to verify its legal status. This may include reviewing property titles, property title certificates, certificates of good standing (Solvency certificates?), utility bills, permits and other related documents.
  • Promise to purchase – Once an agreement has been reached and the outcome of the due diligence is favorable, the offer and acceptance are usually formalized in a promise to purchase contract. The purpose is to oblige the parties to sign a purchase contract by a certain date.
    Normally, when the promise to purchase is signed, the buyer pays around 20% of the price as a deposit.
    Signing this document is not mandatory. However, in many cases, it is desirable if conditions are to be fulfilled, if due diligence is to be carried out, or if a loan is involved.
  • Compliance with contingencies or conditions – If contingencies or conditions have been established in the promise of sale contract, such as approval of financing or obtaining permits, the buyer or seller has a certain period of time to comply with these conditions.
  • Public deed – On the date agreed in the promise of sale, or when the parties decide, the parties will execute the purchase contract, which has to be recorded in a public deed.
  • Registration of the public deed – Once the public deed has been issued by the notary, it must be registered at the Registry Office of the place where the property is located. This step is very important, since, in accordance with the Civil Code, the tradition the transfer of ownership only takes place once the deed has been registered.
    Usually, the buyer must pay the remaining balance of the sale price on the date the deed of sale is signed.
Croatia

Croatia

In the case of a share deal the buyer acquires the shares in the company owning the property through a share purchase agreement (in the form of a notarial deed) and the entry of the share transfer in the company records (this is normally just a formality which will be completed on the same day).

In the case of an asset deal, the title to the property is acquired through registration with the land registry. This may take several days (and, in some very complex cases, several years).

Czech Republic

Czech Republic

Real estate transactions are normally either in the form of direct acquisition of the real estate (asset deal) or an acquisition of the company holding title to the property (share deal). The choice primarily depends on tax and risk considerations, the type of real estate, and the reliability of the other party to the transaction. A share deal provides certain tax benefits but there can be some associated risks for the holding company. The steps involved in the transaction as asset deal are:

  • Letter of intent
  • Exclusivity agreement
  • Agreement for future purchase
  • Due diligence
  • Purchase agreement
  • Registration in the Cadastral Register
Denmark

Denmark

The steps involved in a real estate transaction in Denmark depends on the transaction type and parties involved.

In a structured sale or purchase process, the parties and relevant advisors may enter into a non-disclosure Agreement (NDA) and/or letter of intent (LOI), and the potential bBuyer may deliver a non-binding offer before initiating the due diligence process, however, it depends on the transaction and involved parties.

Based on the due diligence process and negotiations between the parties, a sale- and purchase agreement is formalised. Alternatively, a sale and purchase agreement may be entered into conditional upon the buyer’s satisfactory due diligence investigations.

  • Asset deal

The purchase agreement for a direct transfer of real estate is subject to negotiation between the parties , but the agreement is usually based uponon Danish market standards, which are set out in the agreement. The agreement usually includes certain information and details regarding the property, disclaimer of liability for defects (transfer 'as is”), the purchase price, description of the completion process and certain standard regulation.

Completion of the direct transfer of real estate is done by signing a digital conveyance and filling for registration with the Land Register. The purchase price will then be released to the seller once clear and final title has been registered.

  • Share deal

The share purchase agreement is subject to negotiation between the parties, but the agreement is usually based on market standards with relevant amendments. Depending on the type of transaction, the agreement will usually include detailed regulation on calculation of the purchase price, warranties, agreed limitations of liability and the closing process.

Closing of the transfer will be set out in the share purchase agreement and will be completed by the exchange of all closing deliveries and signing of a closing memorandum.

France

France

The purchase of real estate is traditionally structured as a two-tier process:

First, the execution of a promise to sell, which can be a reciprocal agreement between the buyer and seller or an undertaking by the seller only. A deposit is normally paid by the buyer, through an escrow agent, of 10% of the purchase price (less for larger transactions). The deposit is offset against the purchase price when the sale is completed; returned to the buyer if, for some reason, a clean title cannot be transferred to the buyer within the stated period; or forfeited by the buyer if he no longer wishes to proceed with the purchase.

There is no legal requirement for a specific deposit to be paid or for this to be done through an escrow arrangement.

The time limit specified in a promise to sell is normally set for a few weeks after the expiry of the public authorities' pre-emptive rights. During this time, the notary is responsible for securing official copies of entries from the mortgage registry that provide details of any recorded mortgages on the property, so that title can pass to the buyer without any interference from creditors.

Secondly, the parties will proceed to the execution of the deed of sale in front of the notary (acte de vente notarié). Title passes to the buyer upon the execution of the deed, unless this states otherwise.

Germany

Germany

Following due diligence by the buyer, the sale and purchase agreement is entered into. The purchase price is usually payable once a priority notice of conveyance has been registered in the land register and any other conditions agreed by the parties have been met. After payment of the purchase price, the notary applies for registration of the transfer of ownership in the land register.

Hong Kong, SAR

Hong Kong, SAR

A typical sale and purchase transaction relating to a residential property involves:

Preliminary negotiations

The purchaser goes to view the flat. Usually no legal advisors are involved at this stage.

Written agreement for sale and purchase

Once it is agreed between the vendor and purchaser that the transaction should proceed (price, etc has been agreed), they will enter into the following written agreement(s).

The provisional agreement

This is usually short and simple and is normally prepared by the estate agent and executed by the vendor, purchaser and estate agent. The usual terms include:

  • The parties
  • The property
  • The price
  • Amount of deposit and payment details
  • Date of execution of the formal agreement
  • The property will be vacant or subject to tenancy upon completion
  • The completion date
  • Which of the parties is responsible for paying the stamp duty and other legal expenses on the transaction
  • The amount of commission payable to the estate agent
  • Liability for breach of the agreement, and
  • Any special terms

The formal agreement

The formal agreement contains more detailed terms of the transaction based on the provisional agreement. It is usually prepared by the vendor’s solicitor and approved by the purchaser’s solicitor. The parties would sign this agreement after taking legal advice on the terms and the transaction.

Instructing solicitors

The vendor and the purchaser are required to be separately represented by lawyers unless in certain circumstances, such as where the parties are related by blood or the consideration for the land does not exceed HK$1,000,000 or uncompleted development. The solicitors acting for the purchaser can also act for the mortgagee (if any) so long as there are no conflicts of interests or a significant risk that a significant conflict will arise.

Signing the formal agreement for sale and purchase

The vendor's solicitor prepares and sends the draft formal agreement to the purchaser's solicitor for approval. There may be subsequent negotiations about the draft terms. Once the terms are agreed, the vendor's solicitor prepares a clean copy for engrossment and sends it (in duplicate) to the purchaser's solicitor.

The purchaser's solicitor sends the agreement (signed by the purchaser) and the duplicate, together with the deposit, to the vendor's solicitor.

The vendor's solicitor then arranges for the vendor to sign the agreement and the duplicate and date them. The vendor's solicitor keeps the signed duplicate and sends the signed original to the purchaser's solicitor.

The purchaser's solicitor will first submit the signed formal agreement to the Stamp Duty office for stamping and subsequently lodge the stamped formal agreement in the Land Registry for registration.

Preparing the assignment

The document of transfer (known as an assignment), must be prepared for the vendor to transfer its interest in the property to the purchaser upon completion.

The purchaser's solicitor prepares the assignment and sends the draft to the vendor's solicitor for approval.

Completion

On completion, the purchaser hands over:

  • The balance of the purchase price to his solicitor in exchange for the assignment executed in its favour by the vendor
  • All other title deeds including the release from the vendor's mortgage (if any), and
  • The keys if the property is sold free of occupation by any other person.

The assignment must be stamped as having had the appropriate stamp duty paid and registered in the Land Registry by the purchaser's solicitor. A mortgage by a limited company must also be lodged with the Companies Registry for filing and registration. After stamping and registration, the title deeds are sent to the purchaser's mortgagee (if any) for retention as security. If there is no mortgage, the original title deeds are retained by the purchaser.

Hungary

Hungary

Prior to the conclusion of the sale and purchase agreement, due diligence is normally carried out. Afterwards, the sale and purchase agreement is entered into and submitted to the land registry office for registration. The purchase price is usually paid once the seller has given consent to the registration and other conditions agreed by the parties have been met.

Ireland

Ireland

While there is no legal requirement that a conveyancing transaction follow a particular set of steps the normal steps involved are:

  • Pre- contract due diligence;
  • the signing of a standard form contract for the sale;
  • the execution of a formal legal document or 'deed' which is signed and delivered by the parties involved;
  • exchange of the deed of transfer and any other documents agreed to be handed over by the seller to the purchaser on completion; and
  • post- completion registration of the deed of transfer and any other post completion tasks agreed between the parties
Italy

Italy

Usually, the parties to the transaction enter into an agreement such as a letter of intent or a head of terms, providing the potential buyer with an exclusivity period in which to carry out the due diligence.

Due diligence is undertaken in relation to technical and legal issues by the purchaser’s professional advisors (usually, this takes about two or three weeks).

Upon completion of due diligence, assuming the results are satisfactory, the parties negotiate the terms and conditions of the transaction. Often, the parties agree to enter into a preliminary agreement specifying certain conditions which must be fulfilled prior to the completion of the transaction and the signing of the final deed.

Japan

Japan

General steps in the Japanese commercial real estate transaction processes are as follows:

Step 1: Information Collection

Real estate is sought by investors/purchasers.  The most popular method of doing so is through consultation with a real estate broker.

Step 2: Basic Investigation and Submission of the LOI and CA

The purchasers then conduct a basic investigation of the target real estate.  If purchasers are seriously interested in buying the property after a basic investigation such as an initial property tour or evaluation of a simple rent-based cash flow, the interested purchaser would then submit a letter of intent (LOI) proposing a tentative purchase price along with a confidentiality agreement (CA) to the sellers in order to begin the due diligence process.  The LOI is not considered a legally binding document but does generally represent a commitment to purchase the property subject to execution of an SPA.

Step 3: Due Diligence

Due diligence is undertaken in order to estimate the physical and legal risk of the subject property. For further details, please see the ‘Due diligence’ section below.

Step 4: Documentation

Documents are then executed.  The purchaser usually enters into a real estate SPA with the seller and receives a property disclosure statement regarding important matters from the real estate broker.

Step 5: Closing

The sale and purchase then closes.  The closing is completed once the seller has received payment from the purchaser and the purchaser has received from the seller the documents required for registration of the transfer of the ownership.

Netherlands

Netherlands

The normal steps in a real estate transaction are as follows:

  1. Negotiate and sign a letter of intent
  2. Due diligence process, and
  3. negotiate and sign the sale and purchase agreement; executing the notarial transfer deed and registration of the deed in the Land Registry.

Both prior to and after executing the notarial transfer deed the Dutch civil law notary will check:

  • Whether the seller is still registered with the Land Registry as the owner of the property
  • Whether any new mortgages or enforcement have been established/levied on the property
  • Whether the extracts from the Chamber of Commerce Records are still correct (both for the buyer and the seller)
  • The marital status of the seller and the buyer (if applicable)
  • Whether the buyer and the seller have been declared bankrupt (or become insolvent)
  • Whether the buyer or the seller have been placed under guardianship
  • Whether all permissions and cooperation have been obtained from third parties and whether they are valid
  • Whether any claim of a preferential right by the municipality has been made under the Environmental and Planning Act (Omgevingswet); and
  • The validity of the passports of both the buyer and the seller.

After executing the transfer deed, the Dutch civil law notary submits a true copy of the deed to the Land Registry, which registration is the actual moment of delivery and transfer of the real estate.

Monetary transactions

A Dutch civil law notary generally arranges the financial completion of a property transaction.

Because the Dutch civil law notary is at the heart of the financial arrangements, he will not execute any deed before he is certain that the entire purchase price (plus other costs and taxes payable) has been transferred to the notarial trust account. The purchase price (and other amounts to be paid to the seller or the seller’s bank) is not paid to the seller until the Dutch civil law notary has confirmed that the property is not encumbered with any mortgages or enforcement, other than those that were disclosed when the transfer deed was signed.

It is common in larger transactions to agree in a separate 'notary letter' amongst seller, purchaser, lender and notary on the flow of funds.

New Zealand

New Zealand

A seller can look for a buyer privately, or more commonly will put their land on the market through a real estate agent.

Once a buyer is found, the seller and buyer negotiate an agreement which is recorded (in most cases) using the ADLS/REINZ Agreement for Sale and Purchase of Real Estate form.

A purchaser will often require that the agreement is subject to conditions, including checking the title, getting satisfactory finance, or due diligence. There are also strict time limits within which purchasers must raise any requisitions about the title. Once all conditions are satisfied, the contract becomes unconditional, and completion of settlement will follow. On the settlement date, the relevant transfer instruments are lodged on the e-dealing platform managed by LINZ and the effective transfer is complete. The parties then organise the handover of keys and access to the land if not granted earlier.

Nigeria

Nigeria

Upon a satisfactory due diligence by the parties and consensus on the transaction costs, completion of the real estate transaction includes preparing and execution of the relevant documents which depend on the nature of the transfer transaction. The usual documents are Sale and Purchase Agreement, Deed of Assignment or Deed of Lease or Sublease and Power of Attorney (optional).

The application form for Consent of the Governor (or Minister for Federal Government owned titles) signed by the seller or lessor is a mandatory requirement.

Upon execution of the relevant documents and transfer of possession of the property to the purchaser or lessee, the process for obtaining consent of the Governor (or Minister for Federal Government land interests) and registration of the transfer of interests should commence subject to payment of the applicable taxes and fees.

Norway

Norway

A commercial real estate transaction normally involves a due diligence process, the negotiation and drafting of the contract, the signing of the contract and the final transfer of ownership (normally referred to as closing).

Contracts for the sale and purchase of commercial real estate are normally drawn up by one of the parties’ lawyers based on the bid from the buyer and the acceptance letter from the seller.

Poland

Poland

The normal steps involved in a real estate transaction in Poland are as follows:

  • Real estate due diligence (normally covering a review of the entries in the land and mortgage register kept for the property, entries in the Land and Building Register and the local zoning and development plans)
  • Concluding the transaction in the form of a notarial deed, and
  • Registration of the acquired right in the land and mortgage register (księgi wieczyste)
Portugal

Portugal

Structuring a real estate transaction commonly requires several steps. Including:

  • Due diligence
  • Promissory agreement (with or without registration)
  • Transfer agreement
  • Payment of taxes due prior to the public deed such as stamp duty and municipal property transfer tax (IMT)
  • Public deed or authenticated private document
  • Final registration
Romania

Romania

Real estate transactions are structured either as direct acquisition of the real estate (an “asset purchase”) or as an acquisition of the company holding title to the property (a “share purchase”). The choice between these structures is mostly tax driven. A transfer of shares as opposed to real estate assets allows payment of registration and authentication taxes (which amount to approximately 1 percent of the purchase price) to be avoided.

In addition, transactions are mostly structured to consist of two phases: the signing of a preliminary agreement followed by the due diligence period and the execution of a final transfer agreement, subject to the fulfilment of various conditions precedent.

Slovak Republic

Slovak Republic

Generally, real estate transactions involve due diligence, the conclusion of the transfer agreement and the registration of title with the relevant Cadastral Registry.

Spain

Spain

Deals are structured either as a direct acquisition of the real estate (asset deal) or an acquisition of the company holding title to the property (share deal). The choice between these is mostly tax-driven. The parties normally agree to enter into a preliminary sale and purchase agreement specifying certain conditions which must be fulfilled prior to completion.

The buyer also usually pays a deposit of between 5 percent and 20 percent of the purchase price.

Once the conditions specified in the sale agreement are met, the parties execute the notarial deed and the buyer pays the remaining part of the purchase price.

Sweden

Sweden

Investments in commercial real estate in Sweden are made either as direct investments/asset deals or as indirect investments/share deals, where the real estate is the asset of a limited liability company, or a trading or limited partnership. Due to Swedish tax regulations, most sellers prefer to sell shares in limited liability companies. The buyer generally carries out due diligence before the acquisition, typically after signing a letter of intent or similar agreement providing them with a period of exclusivity. Bidding contests are also frequent, with several potential buyers carrying out limited investigations of the company or of the real estate before submitting their bids. Both the buyer and seller are normally assisted by professional legal, financial, commercial and technical advisors.

The conclusion of the share purchase agreement (or the sale and purchase agreement) is often subject to the outcome of the buyer's due diligence. The extent of the due diligence depends on the buyer and the real estate in question. However, technical and legal due diligence is normally conducted in relation to title, building permits, leases and other contracts relating to the real estate.

In case of a direct transfer of real estate (asset deal), no notarization or similar requirements are necessary under Swedish law to complete the transfer. The buyer becomes the recognized owner according to civil law once the terms and conditions of the transaction set out in the sale and purchase agreement are met, although the buyer must also apply to the Land Survey Authority to register legal title to the real estate. This triggers a transfer tax of 4.25 percent (for legal entities) of the transfer price or tax assessment value of the real estate, whichever is higher. In the case of the transfer of shares in a corporate entity no new registration is necessary and therefore no transfer tax is payable.

Thailand

Thailand

Following the investigation of the land title deed and ownership of the land or real estate, the parties will enter into a sale and purchase agreement and register the land or real estate transfer of ownership at the relevant land office in which the land is situated.

United Arab Emirates - Abu Dhabi

United Arab Emirates - Abu Dhabi

Pre-contractual documents may take the form of a memorandum of understanding, a letter of intent or heads of terms. Due to the emphasis local and public sector parties place on relationships, there is a tendency to consider such documents as the contract (since a good relationship between the parties will resolve all other issues that are not provided for in the document itself). This view is changing and parties are advised to treat such documents as pre-contractual only.

Following the investigation of title, the parties will enter into a contract for the sale and purchase of the property. There may be an interval between the date of the contract and the date when the transfer takes place.

In addition to the above, in relation to transactions with the Abu Dhabi Global Market free zone, agreements to create conveyances are also recognised and must be registered on the ADGM Land Register.

Once the sale and purchase agreement has been entered into, a binding contract has been made. For properties located within Abu Dhabi (excluding the ADGM), it is not possible for a purchaser to lodge a priority notice at the LRD to ensure that the property is not transferred to another party before the completion date agreed between the seller and purchaser. By requiring completion to take place by personal attendance at the LRD (or a trustee office), the risks associated with this are mitigated to a certain extent. In contrast to the rest of Abu Dhabi, it is possible to lodge a priority notice at the ADGM Land Register in relation to property within its jurisdiction.

United Arab Emirates - Dubai

United Arab Emirates - Dubai

This depends on the nature of the transaction. Commonly, the parties will enter into a very basic 'memorandum of understanding', 'letter of intent' or 'heads of terms', which document will set out key information such as the names of the parties, a description of the property and the purchase price. Quite often, the parties will then treat this document as the 'contract' and pay the monies, attend to transfer formalities etc pursuant to it.

Increasingly, this is changing and whilst parties are still likely to enter into such a document, it is less likely to be considered by the parties as being legally binding, and is used as a starting point for the drafting of a detailed sale and purchase agreement.

When the sale and purchase agreement is signed and dated by both parties, the parties then arrange to visit the Dubai Land Department to attend to the transfer formalities. This may be either on the same day as completion or at a later date. However, transfer of title does not take legal effect until registration of the transfer has been completed.

UK - England and Wales UK - England and Wales

UK - England and Wales

Following the investigation of title, the parties will enter into a contract for the sale and purchase of the property. There will usually be an interval between the date of the contract and the date when the transfer takes place.

The contract sets out the documents that must be entered into at completion, including the formal transfer and any indemnities required at completion.

UK - Scotland

UK - Scotland

Before the conclusion of the sale and purchase contract, due diligence is carried out by the buyer. The contract is then concluded and there is normally an interval before completion of the sale, at which time title to the land is transferred. The disposition is then registered in the Land Register by the buyer's lawyers./p>

During the course of the due diligence investigations the buyer's lawyers and the seller's lawyers will negotiate the contract for the sale and purchase. Sometimes the parties enter into a contract which is made conditional on the results of the due diligence investigations. There will usually be an interval between the conclusion of the contract and the date when the land is transferred. The contract sets out the documents that are required for completion, including the disposition (the document transferring title).

Ukraine

Ukraine

Generally, the transaction will include the following stages:

  • Conclusion of a confidentiality agreement/preliminary agreement/letter of intent
  • Legal due diligence, as well as financial, environmental and technical due diligence where appropriate
  • Negotiation of the contract
  • Obtaining approval from the Anti-Monopoly Committee of Ukraine (if required under Ukrainian legislation)
  • Signing and notarization of the contract
  • Fulfilment of any conditions precedent to completion
  • Completion of the contract, and
  • Registration of the buyer's title to the real estate/land
United States

United States

After reaching agreement on the purchase price and other fundamental terms of the transaction (which are sometimes but not necessarily summarized in a term sheet), the parties negotiate a sale and purchase contract reflecting those agreed points and providing further detail regarding the transaction. There will usually be two intervals in the contract: (i) an interval between the date of the contract and an agreed upon date, during which the buyer will  carry out its due diligence and (ii) an interval between the end of the due diligence period  and the date when the title transfer takes place, called closing.

Zimbabwe

Zimbabwe

A draft deed is prepared together with a special power of attorney to pass transfer and the declarations for signing by buyer and seller. The seller applies for a rates clearance certificate to the local authority under whose jurisdiction the property falls. The seller must also apply for a capital gains tax clearance certificate from the Zimbabwe Revenue Authority (ZIMRA). After an assessment is completed by ZIMRA, the seller is required to make payment for capital gains tax and obtains a CGT certificate. The transfer documents are then lodged for registration of title at the Registrar of Deeds Office.