Selling or letting commercial property – preparation is key
Julian Pyrke discusses the importance of good preparation when selling or letting a commercial property and shares his top tips for a successful outcome.
There are a lot of factors to consider if you’re thinking about selling or renting out a commercial property. You will need to understand the legislation surrounding commercial property sales, as well as local property values and what commercial property buyers are looking for from sellers.
Most clients I speak with have been debating whether to sell or lease their property for some time, and the more proactive and organised clients usually contact me to discuss initial Heads of Terms and the selling or leasing process.
The most common piece of advice I give to all of my clients is to gather all the necessary background information ahead of time in order to reduce the amount of time spent on letting or selling a property. If you’re selling or leasing, the information and documents you’ll need are broadly similar to some extent.
Enquiries Before Contract
When selling or letting a property, you will as a seller or landlord be obliged to respond to several Enquiries Before Contract, which are now fairly standardised (you will hear solicitors talk about CPSEs – Commercial Property Standard Enquiries). Thankfully, the days of solicitors being faced with bespoke enquiries that largely consisted of several enquiries cut and pasted from other lawyers’ questions that were largely irrelevant to the case are gone.
Essential considerations and paperwork required:
- The Fire Risk Assessment for the property.
- EPC Certificate.
- Asbestos Report and Register.
- Copy of Planning and Building Regulations, Side Agreements.
- Leases, licences and rights of occupiers
- Capital Allowances will play a part in your letting or sale and an early discussion with your accountant is advised.
It is important to note that some of the above documents may be the responsibility of the outgoing tenant, so it is best to ask them to provide these ASAP.
Don’t forget VAT
Is the property being subject to VAT, that is to say, whether or not an election to waive the VAT exemption has been made? This usually involves consulting with an accountant which can and frequently does, entail a lengthy search for relevant paperwork, some of which is quite old. If VAT is payable on the sale price or rent, then a buyer or a tenant’s solicitor will want to see the acknowledgement from HMRC that the VAT election was made correctly. I frequently hear from my clients who either don’t know if VAT is chargeable, and if it is, they do not have the paperwork. Obtaining anything from HMRC, including confirmation, can take at best two to three weeks, and at worst much longer. This does have a knock-on consequence for your sale or letting, so it’s best to get that sorted as soon as possible.
Specialist commercial property solicitors
If you are thinking of selling or letting your property, then please do not hesitate to contact us to discuss the initial steps and what you can do to make the process smooth and as efficient as possible. We are always happy to assist and guide you through the property maze. To discuss your situation, please contact Julian Pyrke by calling 0117 906 9400 or email firstname.lastname@example.org. Alternatively, please use our contact form.