Purchasing commercial office space is an important step for any company. Lebanon offers great opportunities for investors planning to buy commercial real estate. However, before making a final decision on the purchase, it is necessary to be aware of the legal nuances of this process. Lebanon regulates the acquisition of real estate with its own rules and requirements, which may differ significantly from those in other countries. Familiarizing yourself with these aspects will help you avoid problems and ensure that the transaction goes smoothly. It is important to pay attention to the necessary documents, the specifics of tax obligations, and the procedure for registering ownership rights. Legal support will not only facilitate the purchase process but also guarantee the stability and transparency of the transaction. In this article, we will look at the key legal points that buyers of commercial real estate in Lebanon should be aware of.
The acquisition process: stages of purchasing a commercial office in Lebanon
The purchase of a commercial office in Lebanon involves a number of stages, each of which has its own legal and organizational features. Here are the key steps a buyer must take to successfully purchase commercial real estate in Lebanon.
Preliminary market research and property selection
The first step is to determine the type of commercial office and location that best suits your business needs. It is important to analyze different areas of Lebanon and evaluate offers on the real estate market. Beirut, Jounieh, Sabra, and other regions have different conditions and prices, so the choice of location significantly affects the cost of the property.
Verification of the legal status of the property
Before taking any steps to purchase, you need to make sure that the office you have chosen is legally sound. This includes checking for any debts, fines, or lawsuits related to the property. It is also important to check whether there are any restrictions on the use of the property (e.g., for commercial purposes).
Signing a preliminary agreement
Once the buyer has decided on a property and checked all the legal aspects, the next step is to sign a preliminary agreement. This agreement usually contains the terms of the future transaction, the price of the office, payment terms, and other important details. Signing a preliminary agreement gives the buyer a certain guarantee that the seller will not sell the property to another buyer.
Payment and financing
After signing the preliminary agreement, the next step is to make the payment. This can be a one-time payment or in installments, with subsequent tranches. If the buyer plans to finance the purchase with a loan, it is important to obtain the bank’s approval for financing the transaction in advance. In Lebanon, banks offer various lending options for investors in commercial real estate.
Execution of the main purchase and sale agreement
When all the conditions of the preliminary agreement have been fulfilled, the main purchase and sale agreement can be signed. This is an official document that records all the details of the transaction. The main agreement is usually executed in the presence of a notary or lawyer who certifies the correctness of all the terms and conditions.
Registration of ownership rights
The final stage is the registration of ownership rights to the property with the relevant state authorities. In Lebanon, this requires contacting the land registry, where information about the new owner will be entered. After that, the buyer officially obtains the right to own commercial real estate.
Re-registration of utilities and mandatory payments
After the transaction is completed, the new owner must arrange for the re-registration of utilities and other necessary bills in their name. This may include electricity, water, security, cleaning, and other expenses that were previously in the name of the previous owner.
The process of purchasing a commercial office in Lebanon is fairly structured but requires attention to detail at every stage. Engaging professionals such as lawyers and notaries can help avoid legal pitfalls and ensure the successful completion of the transaction.
Documents required for purchase
| Type of document | Mandatory | Cost | Individual | Legal entity |
| Passport or other identification document | Mandatory | Free (if available) | Passport or ID card | Copy of company registration document |
| Preliminary agreement with the seller | Mandatory | $100-200 (lawyer or attorney services) | Yes (concluded between the buyer and seller) | Yes (concluded between the company and seller) |
| Documents confirming the seller’s ownership | Mandatory | Free (if provided by the seller) | Yes (certificate from the seller) | Yes (certificate from the seller) |
| Certificate of no legal disputes or debts related to the property | Mandatory | $50-100 | Yes (obtained from the local court or land registry) | Yes (obtained from the local court or land registry) |
| Certificate from the tax office | Additional | $20-50 | Yes (no tax liabilities on the property) | Yes (no tax liabilities on the property) |
| Documents confirming the financing of the purchase | Additional | 1-2% of the loan amount (bank fees) | Bank documents (to obtain a loan) | Bank documents (to obtain a loan) |
| Power of attorney for a representative (if the buyer is not acting independently) | Additional | $50-150 (lawyer’s services) | If acting through a representative | If the purchase is made through a representative |
Taxes and fees: What taxes and expenses should be considered when purchasing an office
Purchasing a commercial office in Lebanon involves certain taxes and fees that can significantly affect the total cost of the transaction. Before proceeding with the purchase, it is important to clearly understand how much you will have to pay and when. In Lebanon, there are several key taxes and fees that the buyer must consider at various stages of the transaction.
First of all, the buyer must be prepared to pay a real estate transfer tax, which is 5% of the property value or its market value, whichever is higher. This tax is paid at the stage of registering the transaction in the land registry, after signing the main purchase agreement. The transfer tax is mandatory and must be paid before the completion of the registration of ownership rights.
In addition, the buyer is responsible for registration fees, which are usually 1-2% of the value of the property or its market value. These costs are paid when registering the transaction in the land registry and ensure the legal legitimacy of the transaction.
Legal fees are also an important part of the purchase price. They include the cost of hiring a lawyer or notary to verify the legal status of the property and supervise the transaction. Such services usually cost 0.5-1% of the property value. This helps to ensure that the transaction is carried out without violations and that all documents comply with legal requirements.
If the purchase is financed through a loan, the buyer must also take into account bank fees, which amount to 1-2% of the loan amount. In addition, there are additional costs for processing the loan, such as property appraisal and insurance, which can increase the total cost of the transaction.
If you plan to rent out the office, you should take into account the rental income tax, which in Lebanon is 10% of the net rental income. This is another important expense to consider when planning your commercial real estate budget.
Also, in some areas of Lebanon, there are local property taxes, which can be 0.25-0.5% of the property value per year. They are paid after the deal is done and can vary depending on where the commercial office is.
Recommendations for buyers: How to choose a reliable lawyer to accompany the transaction
Choosing a reliable lawyer to accompany the purchase of a commercial office in Lebanon is a critical step, as legal support allows you to avoid potential problems and guarantees the security of the transaction. Here are some tips to help you find an experienced professional for this case.
- Verify experience in commercial real estate
First and foremost, it is important to choose a lawyer who has experience specifically in real estate. A specialist who specializes in commercial real estate has a better understanding of all the nuances of legal aspects, such as property registration, tax obligations, and the specifics of commercial transactions.
- Reputation and recommendations
It is best to choose a lawyer based on recommendations. These can be recommendations from business partners, colleagues, or other clients who have already worked with them. A specialist’s reputation, confirmed over time, is an important criterion in the selection process.
- Verification of licenses and qualifications
Make sure that the lawyer has all the necessary licenses and certificates to provide legal services in Lebanon. This is important to ensure that they operate within the law and have the appropriate qualifications to conduct commercial transactions.
- Service cost assessment
Research the terms of payment for the lawyer’s services. Some specialists work for a fixed fee, others for an hourly rate. Determine whether the payment model suits you and make sure that all costs are transparent and clear from the outset.
- Face-to-face meetings and communication
Before concluding an agreement, it is important to have several face-to-face meetings with the lawyer. This will allow you to assess their professionalism, communication skills, and willingness to explain complex legal issues. A reliable lawyer should be open to your questions and willing to explain the transaction process in detail.
- International experience (if necessary)
If you are investing in real estate in Lebanon as a foreign buyer, it is important that your lawyer has experience working with foreign investors. They should be familiar with all the nuances of the legislation relating to foreign buyers of real estate.
- Transparency and reliability
A reliable lawyer will always be transparent in their work and will not hide important information. They should provide you with a clear explanation of all legal procedures, documents, and potential risks arising during the transaction.
Hiring a qualified lawyer to accompany a commercial real estate transaction is an investment in your security. Therefore, it is important to carefully approach the choice of a specialist, as the right legal support can greatly simplify the purchase process and provide you with peace of mind and confidence in the legality of the transaction.