Guide to Purchasing an Office or Store in Israel

Guide to Purchasing an Office or Store — Everything You Need to Know

Purchasing an office or store is a significant business decision that requires thorough legal examination and careful financial planning. Unlike residential property purchase, commercial real estate involves more complex legal considerations, tenant rights, and different tax options. In this guide, we will review the main stages of the purchase process, the legal inspections you need to conduct, associated expenses, and how an expert attorney can protect your rights.

What is a Commercial Property and What Makes Its Purchase Unique?

A commercial property is real estate used for business purposes — offices, retail stores, warehouses, clinics, restaurants, and more. Unlike residential apartments, purchasing an office or store includes additional inspections: rights of existing tenants (if applicable), validity of business license, compliance with planning and building laws, labor laws if there are employees, and capital gains tax implications. Additionally, with commercial property, you may face long-term agreements with tenants or commercial mortgages under different terms than residential mortgages.

Purchase Stages: From Initial Inquiry to Registration

The process of purchasing an office or store is divided into clear stages. First, you search for a property that meets your business needs and conduct an initial inquiry. Then comes thorough legal examination of the property, agreement on sale terms, signing of a binding purchase agreement, and completion of final inspections. At the closing stage, the financial transfer is executed and the property is registered in the land registry in your name. Each stage involves different legal details that an expert attorney will help you navigate.

Essential Legal Inspections Before Signing

Before you sign a purchase agreement, you must conduct several critical legal inspections. First, examine the original land registry document to verify that the seller has legal ownership of the property. Check if tenant rights (leases) exist on the property and what their terms are. Check if there are mortgages or liens on the property that must be removed before purchase. Check the validity of the business license and planning and building compliance — whether you are permitted to use the property for your business. Check if there are pending lawsuits against the property or seller. All of these are inspections that an expert attorney specializing in commercial real estate will conduct on your behalf.