At Land Law we fully understand that when you decide to dispose of your property you will want to do so as quickly and efficiently as possible, so as to free funds for alternative purposes. We therefore recommend that you get in touch as soon as you decide to sell so we can help you prepare. Commercial property legal work is information driven – so ensuring your property information is in good order is essential to avoid delays and put you in the best possible position to proceed quickly.
Ahead of your sale being agreed we would recommend that you prepare a sales pack and line up all those things that can cause delays later on. We can help you with this by:
- Obtaining up to date title information from the Land Registry.
- Reviewing your title information so that if there any covenants, third party rights or other matters which are likely to be problematic for a buyer we can start to put in place appropriate solutions such as defective title insurance.
- Requesting deeds to the property from your lender and obtaining a redemption figure in respect of any mortgage (where appropriate).
- Preparing draft replies to standard enquiries for your review. There are different standard enquiry forms for different types of property. Depending on the type of property you are selling we will suggest the appropriate forms and help you to complete them.
- Preparing a draft contract and other necessary transaction documentation in basic form, ready for the terms of the transaction to be added when terms for your sale are agreed.
- Setting up an online portal (data room) containing your sales pack and all documents, so that access can be given to a buyer’s solicitor quickly after terms are agreed.
For more information about the online portals we offer to our clients please see the online property portals information on our Client Benefits Page.
We are happy to get involved at an early stage, assisting your selling agent in pulling together the required information for the brochure or marketing particulars. We can send them key information or provide a streamlined sales pack for marketing purposes.
Our experience and commercial know-how also mean we can provide advice you when you are negotiating the terms of any sale. (For more information, please see “Starting Well – Let’s Talk Tactics” on our Client Benefits Page. While your agent will guide you to ensure that you agree the best possible deal for the sale of your property, we can assist to ensure that the terms are clear and the transaction will be structured and documented in the best way. Heads of terms which accurately reflect what the parties intend from the outset mean delays and disagreements can be avoided later. This can also help to minimise the risk of the transaction aborting for something as simple as the buyer not understanding key details about the property they have offered to buy or the consequences of the transaction structure.
Once terms are agreed, and the buyer’s solicitor has been sent the transaction documents and given access to the online sales pack, we will keep you regularly updated with the progress of your sale. We will also seek to ensure that the buyer honours any agreement in the heads of terms as to the timescale for exchange and completion by diarising regular chasers where necessary to keep the transaction on track.
If the buyer’s search results or title review reveal any matters of concern, we will always work closely with you to offer any appropriate comfort or solutions to allow the transaction to proceed, whether that be by way of the addition of tailored drafting to the transaction documentation, exploring the availability of indemnity insurance policies or negotiating releases or other agreements with third parties.
Where the terms of any agreed sale are complex our lawyers have the drafting skills required to prepare contracts giving effect to those terms and protect your position. Depending on what your buyer will use the property for, we may need to include special provisions or structure your transaction in a particular way. We will work closely with you as the transaction documents are negotiated and we will report to you on the final documents to ensure the final agreed deal meets your expectations.
Once everything is agreed and you are ready to proceed with the sale we will handle the exchange of the sale contract, so as to secure your deal contractually. We will also deal with completion, including preparation of the completion statement and accounts, redeeming any mortgages and accounting to you for the balance of proceeds. Our team are on hand to assist you throughout the sale transaction until the sale proceeds are safely in your bank account.
Owner-Occupiers
If you are selling premises to an owner-occupier, they will want to understand how the property will work for them and their business. They may want more information about the day-to-day operation of the premises and the plant and equipment contained within it than other types of buyer. We will help you to craft your sales pack accordingly. If they are moving from other premises, they may also need to co-ordinate the transaction to fit in with their planned move, or to allow for lead-in times for telecommunications installation, or machinery and equipment purchases. We can help you to understand their requirements by discussing these at an early stage with the buyer’s solicitor helping you to avoid frustration and disappointment if there is a mismatch of expectations surrounding timings.
Investors
If you are selling an investment property, the buyer will want to understand the property’s income stream, and anything that could detract from the property’s profitability as an investment. Your sales pack will need to include information about the rent roll, tenant payment histories and arrears. If you are selling a multi-let property with a service charge for shared areas, we will need you to provide service charge accounts for the preceding three years and an up-to-date budget.
The sale contract must be tailored to address those issues that are specific to investment sales. In addition to dealing with apportionments of rent and service charge, an investment sale contract may, amongst other things, also need to deal with any rent arrears, assignments of rent deposits, outstanding rent reviews and assignment and/or termination of service contracts. If you have any employees at the property being sold, we will need to liaise with your employment lawyer to ensure that the TUPE regulations, if applicable to the transaction, are complied with.
When an investment property is sold, this is often a sale of a letting business to which the VAT rules relating to transfers of going concern (“TOGC’s”) may apply. Our solicitors will need to liaise with your accountants/VAT advisers to check whether the transaction meets the criteria for a TOGC to apply. They will also advise you on appropriate provisions to include in the sale contract.
Development
Development buyers have slightly different priorities that need to be catered for. Your sale may be part of a wider site assembly, where a buyer acquires multiple titles from different landowners. They may not want to complete their purchase until they have cleared the way for development. This could include them obtaining satisfactory planning permission for their proposed development or undertaking intrusive ground investigations and checking the cost of remediating any contamination that may be found.
Whatever the circumstances our lawyers can help you to structure your sale using the most appropriate form of disposal documents. These may include:
- Exclusivity and lock out agreements – these can offer your buyer a period to complete their property due diligence and site investigations, safe in the knowledge that you cannot deal with any other potential buyers without breaching the agreement and incurring financial penalties. In return for granting exclusivity the buyer may commit to incurring expenditure on its due diligence, some of which they may be prepared to share if the transaction doesn’t proceed. Exclusivity agreements may also include confidentiality provisions, which can be advantageous where the parties want to keep the terms or even the existence of the potential transaction under wraps.
- Option agreements – are useful if you a buyer needs a guaranteed right to buy a property, should the circumstances to enable their development to take place arise, but without any contractual obligation to proceed, so they can simply walk away if they don’t. In return for granting an option over your property and tying your property up, you should expect to receive a non-refundable option fee.
- Conditional contracts - allow a seller and buyer to agree terms for a sale with completion being triggered if the agreed preconditions to development are satisfied (e.g. satisfactory planning permission is obtained). Where a sale is conditional on certain matters we will try to ensure that that the contract is tightly drafted so that the buyer has no opportunity to wriggle out of its obligation to purchase save in certain agreed and defined circumstances.
Our team of development lawyers can also assist with sales to developers using their expertise to highlight risks and pitfalls, guide you through the negotiation process and produce drafting to deal with anything that may need to be covered as part of your deal. So even if you are not a developer yourself, we can help to ensure you are not at a disadvantage.
Where you are selling your property using an option or a conditional contract, we will help when the buyer takes the required steps to trigger completion. We can check that notices are served correctly and in accordance with the terms of the relevant agreement. Our team can guide you at every step of the way until your sale is concluded.
And if any conditions cannot be satisfied, or an option is not triggered by the deadline we can also assist with agreement termination, so you can bring any obligations to an end and start looking for your next buyer, should that be necessary.
For more advice on how we can help you with selling your commercial property please get in touch with one of our expert lawyers…