Building Legal Solutions
Preparing to sell your commercial property
- AuthorPaul Harrison
There are a number of crucial factors that should be taken into account when looking to sell your commercial property.
Our role as solicitor is to anticipate and deal with enquiries that arise during the legal process and the approach to this is key to a quick and smooth transaction. The ultimate goal for you as the client is to complete the deal as quickly as possible and maximise the sale proceeds. We work closely with your other professional advisors to achieve this.
There are steps and action points that can be taken early on and, with the best professional advice, a successful outcome can be reached with practical and innovative solutions for overcoming issues along the way.
If you are considering a sale of your commercial property these are some of the points to consider now:
- Check on legal and beneficial ownership of the Property.
- Is the property freehold or do you own a long leasehold interest? Is superior landlord’s consent required?
- Is the title registered? If unregistered, then locate the title deeds so a voluntary application for ‘First Registration’ can be made.
- Do the physical boundaries of the property on the ground match the redline on the Land Registry title plan?
- Are all rights required to use the property (e.g. rights of way) formally documented? Have any title restrictions been breached? Investigating the availability of indemnity insurance would be the first option before you start contacting the adjoining owners.
- VAT - Has an option to tax been made? If the property is subject to tenancies it may be possible to structure as a TOGC. Make sure all documents are in place with HMRC.
- Get advice on Capital Allowances and any claims that have or can be made. There is a specific section in the standard commercial property enquiries that your advisor will need to complete, and the sale contract will also deal with any apportionment of the sale price.
- What tax will be payable on completion of the sale? Check with your accountant beforehand
- Do you need to transfer or change the legal/beneficial ownership before exchange of contracts? For example, putting a spouse on the legal title or entering into a Declaration of trust to split the beneficial ownership
- Before making a final decision to sell have your IFA guide on how the sale proceeds should be further invested. It may be that rather than selling the property on the open market the asset can be put into your pension and leased out to create a tax efficient income.
- Check for any early repayment charges on mortgages secured on the property.
- Do you have planning permission in place for the current use of the property? Recent changes have allowed more flexibility for changes and this may be established by long use.
- Have any works been carried out that would have required planning permission and/or building regulations approval? Make sure these have been signed off and certificates in place
- Arrange to obtain all statutory compliance documentation that the buyer or tenant will request including electrical/gas certificates, asbestos survey and EPC.
Seeking a range of professional advice before putting your commercial property on the market can be highly beneficial to maximise receipts and minimise deductions/liabilities so that you make best use of the asset.