Property transactions must be effected and the legal instrument used for this purpose is simply a means of achieving an end. For our property lawyers, this means completing the transaction in their client’s interests, naturally in consultation with tax consultants.
Letter of intent
Once the parties have expressed their intention of effecting a sale by signing a letter of intent (the first step), they then need to specify the substance of the transaction (the second step). The term ‘due diligence’ is a phrase that is often used in this context. When is due diligence required? And what exactly should be the object of a due diligence study? In short, what do the parties want to find out and what impact could this have on the negotiations?
The next step involves setting the price for the property. The price and the method of payment depend greatly on the tax status of the transaction (the third step). As soon as agreement has been reached on the tax planning and the structure has been clearly recorded, the next step follows: the execution of the agreement (the fourth step). A notarial deed needs to be executed for the conveyance of property (the fifth step). The transaction does not take effect until payment has been made and the title to the property passes to the new owner.