If you have commercial property to sell, you can maximise your returns by doing the hard yards before putting the asset on the market. The more potential problems that you and your solicitor can identify and head off at the outset, the better chance of a smooth sale and a decent price on the deal. Here are some vital things to keep in mind…
How to prepare
After getting a professional appraisal to determine the current market value of the property, and setting a competitive (but realistic) price based on the property’s condition, location and market trends, you should then develop a comprehensive marketing plan to reach potential buyers, including online listings and professional photography. It’s a great opportunity for you to consult with a local agent to make sure the property is being marketed in the best possible way.
You should make sure that you understand the tax implications of the deal. To make the task easier, you could speak to a professional advisor to plan for any tax liabilities and explore possible tax-saving strategies.
It is also worth checking the legal title to the property at the very outset, particularly to see whether there are any limitations on what the property can be used for.
What your buyer needs to know
Ultimately, the emphasis is on the buyer to carry out the necessary physical inspections of the property. However, as the vendor you’re responsible for providing key information that you are aware of in the form of replies to enquiries. These range from regulatory issues on fire safety or environmental performance to financial questions on property rates and any taxes that relate to the property.
All necessary legal documents, including land registry entries and relevant leases or licenses, need to be up to date and available. You’ll also need to have a valid Energy Performance Certificate (EPC) and if the property is mixed-use with at least two residential units, you may need to ensure it complies with the Building Safety Act 2022, which imposes new requirements for buildings over a certain height.
Aside from this, it’s a good idea to consider what questions, specific to your particular property, that prospective buyers might ask so you’re as well prepared as possible. Your solicitor can help you to consider this and to have the relevant information available in response.
The benefits of early legal advice
Generally, working with professionals can make the task of buying or selling commercial property much less stressful, whether that’s a lawyer who specialises in commercial property, an agent, mortgage broker, accountant or professional tax advisor. Their expertise can help to navigate complex transactions and avoid potential pitfalls, assess any risks that could result in financial losses, ensure compliance with current regulations and keep vendors/ buyers abreast of market trends and economic conditions that could affect the value of the property.
Preparation really can be key and your solicitor will be able to spot potential problems in advance and look to resolve any issues that are likely to hold up the sale and/or make it more complex than it needs to be. You may need formal consent from a third party before you can legally transfer the property, for example – and if you haven’t received it, this could delay the deal.
If there are any issues with the title to the property or any occupational leases then identifying these at the outset should allow you to get matters resolved so that once you have reached an agreement to sell you are ready to go. Similarly, preparing replies to enquiries in advance can give you time to gather all information and paperwork that is required.
Keeping these vital issues in mind, and getting the right support from appropriate professionals, can help you make more informed decisions when disposing of commercial property. More importantly, it can improve your chances of a successful deal and make the whole process far more enjoyable than it might otherwise have been.
Victoria leads a skilled team of five partners and seven other lawyers at Swinburne Maddison’s commercial property team. If you want to know more about the ins and outs of buying and selling commercial property, feel free to get in touch with us on 0191 384 2441 or fill in our quick and easy online enquiry form.
