Problem
Linda is a baker who has been working for 10 years with her mentor, Rudolf. Rudolf has wanted to retire for a while. Linda obtains finance from ANZ Banks so that she can purchase Rudolf's business, Munich Dough!
The business includes ingredients, ovens, mixers, display cabinets and other tools required for baking. There is also a delivery van, a website and currently 2 full-time and 4 part-time workers, not including Linda and Rudolf.
Linda and Rudolf have agreed on a purchase price of $600,000 with a 10% deposit upon exchange. Rudolf's conveyancer has provided Linda with a draft sale of business contract.
Rudolf is currently leasing the property where he operates Munich Dough! The premises are a shop within Palm Spring Shopping Centre. The shop has an area of 100sqm with current rent of $30,000 per annum and annual rent reviews measured by the market value. Rudolf is currently 2 years within his current 4 year lease, with no more options to renew. He says that he has a clause within his lease allowing him to assign the lease to Linda.
Linda comes to you for advice on purchasing Munich Dough!
Linda is coming to consult you as a Conveyancer for the following:
i. the basic process of sale from pre-exchange to settlement of the purchase;
ii. the searches and checks you will perform to ensure that Linda receives everything that she expects from the sale;
iii. Whether she should go through the process of having Rudolf assign his lease, negotiate with Palm Spring Shopping Centre for a new lease or find another premises .