Commercial conveyancing refers to the legal processes involved in the transfer of ownership or leasehold rights of land and property specifically intended for commercial use. Commercial conveyancing is similar to residential conveyancing in that it facilitates the transfer of property ownership from one party to another. However, it is important to note that there are significant disparities that require careful consideration. One factor that must be considered is the complexity of the procedure, particularly when tenants are involved. Furthermore, the process of commercial conveyancing is frequently characterized by a longer duration for completion. In this article, Commercial Conveyancing, we take a look at the process and mechanism involved.
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How is the process different from residential conveyancing?
Residential conveyancing relates to the transfer of ownership of residential properties, while commercial conveyancing involves the legal processes associated with property used for business-related activities. The duration of commercial conveyancing is frequently lengthy as a result of the comprehensive legal inquiries that are necessary. It is important to consider that, as a general rule, the duration of the process is likely to increase in proportion to the size of the property and the complexity of commercial property transactions surpasses that of residential transactions.
This can be attributed, at least in part, to the prevalence of tenant occupancy in commercial premises. Both the seller and the buyer must consider the rights of these tenants and also be aware that the documentation will vary in commercial property transactions due to the increased number of required documents. Additionally, the rules on payment of VAT for commercial conveyancing transactions can be far from straightforward and often require specialist advice.
One delay that may occur during the conveyancing of commercial properties is the need to fill out a Commercial Property Standard Enquiry (CPSE) form. This document gives a detailed overview of the property from the perspective of a seller and is a necessary part of commercial conveyancing.
What does a Commercial Conveyancing Solicitor Do?
A commercial conveyancing solicitor can assist with several matters of commercial property transactions and possesses the expertise to assist in the following areas:
- Acquiring, disposing, securing a loan against, or refinancing a commercial property
- Carrying out appropriate due diligence relating to the sale or acquisition of a commercial building.
- The process of drafting or negotiating leases
- The process of transferring a lease for a commercial property
- The process of obtaining commercial mortgages and engaging in communication and coordination with professional advisors.
- Rent reviews.
- The cessation of lease agreements
- The process of renewing or extending current commercial leases
- Development of commercial properties
- The repossession process
- Dilapidations claims
What is the process of commercial conveyancing?
- Find a property you are interested in purchasing.
If you are purchasing a commercial property, your solicitor must investigate the property’s title and conduct any necessary pre-contract inquiries. Once received, your solicitor must endorse the draft contract provided by the lawyer of the seller and raise any additional questions deemed necessary based on the search results and responses to the standard commercial property inquiry forms (CPSE). In addition, mortgage financing and stamp duty land tax will be addressed at this juncture.
If you are selling a commercial property, your solicitor will investigate the property’s legal title. Depending on the nature of the transaction at hand, your lawyer will need to prepare the Contract for Sale and you will be required to complete one or more CPSE inquiry forms. Fixtures and fittings specifications may also be required.
- Carry out due diligence
The next stage is to ensure that everything is in order and to exchange contracts, which will bind the agreement. Until contracts are exchanged, neither the seller nor the buyer are legally obligated to sell or purchase; therefore, either or both parties may incur abortive costs if the transaction falls through. In addition, the buyer will typically employ a chartered surveyor to check the building’s structural integrity, and both parties will need a lawyer to conduct the conveyancing.
Once the due diligence phase is complete, the lawyer representing the buyer will be able to inform the seller of any prospective problems or future expenses. The solicitors can also negotiate any contentious issues.
While the lawyer for the buyer conducts due diligence, the seller’s solicitor will respond to any inquiries and continue drafting the contract of sale. Once complete, they will send this to the buyer’s solicitor for approval.
- Exchange of Contracts
Once the buyer is satisfied with the seller’s responses to inquiries and search results, the parties will exchange contracts and the buyer will pay any agreed-upon deposit, assuming both parties have approved the draft. Typically, the deposit amount is around 10%. At this juncture, the transaction becomes legally binding for all parties involved.
- Completion
When the parties exchange contracts, the completion date will be determined. This is the date by which the remaining funds must be transferred. At this time, the buyer must have secured the remainder of their financing, including any mortgage funds, and the seller must hand over the keys.
The Buyer will send the remaining balance of the purchase price to the Seller, and the transaction will be finalised by the Buyer’s and Seller’s solicitors.
The buyer’s solicitor will pay any applicable Stamp Duty Land Tax and, if required, register the transaction with the Land Registry. Charges on the property will be paid off and any remaining funds will be transferred to the vendor as part of the final completion details.
How we can help
We have a proven track record of helping clients with their commercial conveyancing requirements. We will guide you through the process and ensure all checks are carried out swiftly and efficiently and we firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.
Deciding when (or whether) to incorporate, what kind of ownership
How to Contact Our Commercial Property Solicitors
You need to be well-informed about the issues and possible implications of buying or selling commercial property. However, expert legal support is crucial in terms of ensuring a positive outcome to your case.
To speak to our Commercial Property solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well-known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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