Commercial conveyancing is the process of making someone the new legal owner of land, buildings, or property that is used for business purposes and is usually carried out by a solicitor or licensed conveyancer. In this article, commercial conveyancing process, we take a look at the process and mechanism involved.
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How is the process different to residential conveyancing?
One major difference between residential and commercial conveyancing is that for commercial property transactions, contracts get exchanged at an earlier stage. The agreement will be signed, and then investigations will start with opt-out clauses included in the event that something is discovered that could have implications for the transaction.
Commercial property conveyancing can often take longer than residential conveyancing. Providing an exact time frame can be difficult due to the complexity of the process. 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 is the process of commercial conveyancing?
- Identify a suitable property
If you are purchasing a commercial property, your solicitor should investigate the title to the property and commission any appropriate pre-contract searches. Once received, your solicitor should approve the draft contract supplied by the seller’s solicitor and raise any additional enquiries necessary in light of search results and answers to standard commercial property enquiry forms (CPSE). Additionally, mortgage finance and Stamp Duty Land Tax will also be addressed at this stage.
If you are selling a commercial property, your solicitor will investigate the legal title of the property. Your solicitor will then need to prepare the Contract for Sale and you will be required to complete one or more CPSE enquiry forms depending on the type of transaction in hand. Details of fixtures and fittings may also be required.
- The Due diligence process
The next step is to make sure everything is in order and exchange contracts that makes the deal binding. Until contracts are exchanged, there are no legal obligations upon the seller to sell or the buyer to buy and consequently either or both parties can be hit with abortive costs if the deal doesn’t go through. The buyer will also usually look to employ the services of a chartered surveyor to ensure the building is structurally sound and both parties will need a lawyer to conduct the conveyancing.
Once the due diligence phase is complete, the buyer’s lawyer will be able to advise them of any potential problems or future costs the seller will need to know about. The lawyers can also negotiate over any sticking points.
Whilst the buyer’s solicitor conducts due diligence, the seller’s lawyer will be answering any questions and getting on with drafting the contract of sale. Once it’s ready they’ll send this over to the buyer’s solicitor to agree.
- Exchange of Contracts
Once the buyer is satisfied with his replies to enquiries and search results then, providing both sides have agreed the draft, the parties will exchange contracts and the Buyer will pay over any agreed deposit. The deposit amount is often around 10%. It is at this point that the transaction becomes legally binding on each party.
- Completion
When the parties exchange contracts they’ll agree on the date of completion. That’s the date at which the balance of the funds needs to be transferred. At this date, the buyer will need to have the rest of their finance (including any mortgage funds) ready to go and the seller will need to hand over the keys.
The Buyer will forward the balance of the purchase price to the Seller and the solicitors for the buyer and solicitor will complete the transaction.
The buyer’s solicitor will pay any Stamp Duty Land Tax that needs to be paid and, if necessary, register the transaction with the Land Registry. Final completion matters will include the settlement of any charges on the property and the transfer of any remaining funds to the seller.
How we can help
We have a proven track record of helping clients deal with breaches of restrictive covenant remedies. 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.
How to Contact Our Commercial Property Solicitors
It is important for you 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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