When you are looking to sell a commercial property, it is essential that you take every precaution to ensure that the sale can be completed as quickly and smoothly as possible. Laura Pyatt, commercial property specialist at Ansons Solicitors in Cannock, Staffordshire, suggests eight steps that you should consider taking when selling your commercial property.
- Asbestos surveys – The Control of Asbestos Regulations 2012 put the responsibility on the occupier of a commercial property to manage any asbestos which is present. This includes identifying any asbestos containing materials (ACMs), producing an asbestos management plan and ensuring regular inspections of all ACMs are carried out. Many buyers will insist on viewing an asbestos survey prior to completion so they know what their liability will be. You should ensure you have this survey carried out and ready to provide to your solicitor. Please note this is only required for properties built before 1999.
- Consents – identify whether any consents are required. You may need to obtain a superior landlord’s consent to assign a lease (if dealing with a leasehold property) or consent from a management company. Do you have contact details for the relevant people you can pass to your solicitor?
- Commercial property standard enquiries (CPSEs) – prepare replies in advance. You will also need to provide the buyer’s solicitor with an energy performance certificate, fire risk assessment and a copy of your building’s insurance policy (unless the buyer will put their own insurance in place on completion).
- Planning documents – the buyer will want evidence that the property has consent for its current use and for any works that have been carried out.
- Leases – ask your solicitor to review any leases to ensure they are ‘commercial’ and the buyer is not likely to require any variations. You should also check all leases which have a term of seven years or more have been registered. If not, this can cause considerable delays. You should also obtain a rent payment history and service charge history along with service charge accounts for the last three years (if applicable). You should discuss with your valuer whether you could enhance the value of the property by:
- dealing with any outstanding rent reviews;
- agreeing the renewal of a lease; and
- re-gearing a lease as a tenant may be willing to give up a break option if the landlord agrees a lower rent.
- Authorised guarantee agreements (AGAs) – if you are assigning your lease to the buyer you will more than likely be required to give an authorised guarantee agreement. This guarantees the obligations of the tenant under the lease. If the buyer does not pay the rent or fails to observe and perform any of the tenant covenants, then the landlord can look to you to pay the rent or perform the covenants.
- VAT position – identify whether the property is VAT elected. If you are unsure, speak to your accountant or contact HMRC. Dealing with this early on will prevent any delay. Your solicitor will advise you on whether VAT should be charged on the sale price, or whether it is possible to treat the transaction as a transfer of a growing concern meaning no VAT will be payable.
- Energy performance certificate (EPC) – in order to market your property for sale you need to have an EPC. It is an offence to market a property without one.
At Ansons Solicitors, our commercial property experts can guide you through every step of selling your commercial property, from the initial checks to closing the deal.
If you are thinking of selling your commercial property, or have any other queries, please call Laura Pyatt on 01543 267989 or email email@example.com.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.