Commercial conveyancing refers to the legal work required during the sale or purchase of a commercial property to transfer ownership. It also refers to the transfer of occupancy of a commercial property through the transfer of a lease. In many senses, commercial conveyancing is like residential conveyancing in that it is the process of transferring the title of a property from one individual or company to another. In this article, Commercial Conveyancing London, we take a look at the process and mechanism involved.
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Are there differences to residential conveyancing?
Commercial property transactions tend to involve a business premises, for example, a shop, office or warehouse. These enterprises are typically set up as a Limited Company, partnership or as a sole trader. Residential property conveyancing entails individuals who wish to buy or sell a dwelling, such as a house or flat.
Commercial property proprietors frequently seek to buy or sell a building from which to operate their business, and these premises are frequently purchased or sold as part of a larger business acquisition. Where this is the case, it is common for an additional goodwill payment to be made to ensure the buyer has the right to assume the previous owner’s client base and can continue trading under the same name.
Residential conveyancing transactions involve individuals engaged in one of the most financially significant transactions of their lifetime.
The vast majority of commercial conveyancing deals involve leasehold properties where rent is owed to a landlord. Our residential conveyancers handle both freehold and leasehold properties; leasehold residential property is common, particularly for newly constructed homes or apartments.
How does commercial conveyancing work?
What should the buyer do?
When purchasing commercial premises, your solicitor will investigate the title to the property and commission any appropriate pre-contract inquiries. Once received, your solicitor will check the draft contract provided by the seller’s solicitor and make any additional inquiries deemed necessary based on search results and responses to standard commercial property inquiry forms known as ‘CPSE Enquiries’. Any ancillary matters including mortgage finance and Stamp Duty Land Tax will also be addressed at this stage.
What should the seller do?
When selling commercial premises your solicitor will have several responsibilities at the outset of the transaction. After investigating the legal title to your property, your solicitor will prepare the Contract for Sale and, depending on the type of transaction at hand, request that you complete one or more CPSE enquiry forms. Fixtures and fittings specifications may also be required.
Carry out due diligence
The next step is to verify that everything is in order and to exchange contracts that will bind the agreement. Neither the vendor nor the buyer is legally obligated to sell or purchase until contracts are exchanged; therefore, either or both parties may incur abortive costs if the transaction falls through. In addition, the buyer will typically engage 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 notify the seller of any prospective problems or future expenses. The solicitors can also negotiate contentious matters.
While the buyer’s solicitor performs due diligence, the seller’s solicitor will respond to any questions and continue crafting the contract of sale. After completion, they will submit the document 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 draught. Typically, the deposit is approximately 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 deadline for transferring the remaining funds. At this point, the buyer must have secured all remaining financing, including mortgage funds, and the seller must hand over the keys.
The remaining balance of the purchase price will be sent by the Buyer 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 register the transaction with the Land Registry, if necessary. As part of the final closing details, all charges on the property will be paid off, and any remaining funds will be transferred to the seller.
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 at 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 and are well-versed in carrying out commercial conveyancing in the London area.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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