There are some real advantages to putting in hand steps to prepare your property for sale even before it is put on the market. We can assist you with this preparation.
Commercial Property Partner Oonagh McKinney outlines some steps that can be taken to prepare your commercial property for sale.
What are the benefits of ensuring that commercial property is ready for sale at the outset?
Ensuring the property is ready for sale at the outset will:
- Reduce unnecessary delays and costs
- Identify any adverse issues that can be resolved or agree a negotiating strategy to minimise the risk of a buyer trying to re-negotiate the price or avoid the sale falling through.
What steps should be taken to prepare my commercial property for sale?
Below we’ve recommended some steps that you should take to ready your commercial property for sale, and to increase the likelihood of the sale being smooth.
What documents are required to sell a commercial property?
- Start collating Property and Management Information. We can provide a list of documents a buyer would require
- Obtain a copy of the title and any documents referred to on the title
- Provide copies of all occupational leases, licences or other contracts which may affect the title
- Do the actual boundaries match the title plan? Make sure you have an accurate plan if it is a sale of part
- Obtain full details of any mortgage secured on the property by obtaining an up to date redemption figure.
What other documents do I need to obtain to sell commercial property?
- Obtain an Energy Performance Certificate (EPC) if applicable
- Do you have an up to date asbestos report and management plan?
- Prepare Commercial Property Standard Enquiries and obtain documents referred to in those replies such as: Planning documents, fire risk assessment, VAT and capital allowance information, construction documentation and warranties on a newer property.
What issues might there be when selling commercial property?
There may be many issues that you come across when selling commercial property. Therefore, it is best practice to identify these prior to starting the sale process. Below we’ve detailed some considerations:
- Consider what issues arose on the original purchase to try and anticipate those that may be raised by a buyer.
- Identify problem areas such as whether there are restrictive covenants on the title that are likely to cause a problem for a potential buyer
- Have the restrictive covenants already been breached? If so, then a strategy can be considered.
- Consider the solicitor carrying out an inspection of the property to identify complex rights or title issues such as flying freeholds
- Does the property have the necessary planning permissions and is it compliant with building regulations?
Which third-parties should be considered?
- Liaise where necessary with Accountants, Insurance Brokers, Local Authority Planning Departments for up to date relevant information.
- Consider whether any third-party consents are required in the title to enable a sale of the property to be completed.
- An enquiry could be made of an Indemnity Insurance Company to look at the cost of putting in place a policy if one is needed to cover a defect in title.
All of the above will save, not only time but is also likely to save on costs and avoid nasty surprises during the course of a transaction.
When selling your property, you may also wish to draft an overage agreement. This will ensure that, if the market value of your property changes after the sale is complete, you receive fair payment. Find out more about overage here.
Expert Commercial Property Solicitors
Members of our team would be happy to discuss your individual circumstances and help you prepare for a sale.
If you have any queries following this article, please get in touch with our bright Commercial Property team for expert advice.
We offer a free initial appointment to all new clients. To get in touch with our bright lawyers simply call 01202 499255 or visit our get in touch page.
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If you have now sold your property and are looking to purchase a new premises, read our guide here.
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