Below we have put together a brief summary of things to consider:
- Firstly, it is important to make sure that the premises you are purchasing are suitable for your business. This means looking out for any restrictive covenants that the building could be subject to, and considering the local restrictions that could be put in place.
- Once negotiations between two parties have begun, a lockout agreement might be made, which means that the seller agrees not to sell the property to anybody else, whilst negotiations are taking place. This, however, is not mandatory.
- Due Diligence is an important factor in the process of buying and selling commercial property. Checks will be carried out by solicitors on behalf of the purchasers, in order to ensure that there are no problems with the premises, and for the transaction to go ahead.
- Once any queries that could potentially arise have been dealt with, exchange and completion can occur. This is the stage where the transaction becomes legally binding on both parties, so it is important that both parties are happy to proceed by this point. Pulling out once contracts have been exchanged will mean that the party who has done so can be liable to pay compensation to the other side. The balance of the purchase price would be transferred to the seller on the agreed day of completion.
- Post completion, the purchaser’s solicitors will prepare a Land Registration Return to be submitted to HMRC, who will calculate the amount of stamp duty land tax that needs to be paid. The purchaser’s ownership of the property should also be registered with the Land Registry.
If you would like to discuss this in more detail, please email info@ha-law.co.uk or telephone 020 7788 7465 to speak to a HA Law Partner.
