If you are thinking about selling your commercial property, there will be a few things you will want to achieve. You will probably be looking to make a profit on the original investment and maybe a quick and easy sale.
The process of selling a commercial property can be quite involved and complex. You will need:
- An understanding of the legislation of commercial property sales;
- To know relevant prices of other local commercial properties; and
- An understanding of when is the best time to sell.
You will also need to know the costs that are involved to you including estate agent fees, removal costs, mortgage redemption, arrangement fees and any capital gains tax you may be liable for.
Here at Integra Solicitors we can help you figure out the best route and ensure all the legal aspects are taken care of.
Steps To Selling Commercial Property
Communicate with your buyer:
First of all, you need to keep lines of communication open between you and your buyer. A Heads of Terms will be drawn up that will provide all the necessary details such as the price, timescales for exchange and completion, details of all parties involved in the transaction and their solicitor’s details and any other terms that have been agreed.
The Seller’s solicitor:
The agreed Heads of Terms will need to be sent to your solicitor who will then obtain your title documents from the Land Registry, obtain appropriate responses to the relevant Commercial Property Standard Enquiries (“CPSEs”) and draft the contract for sale. Your chosen solicitor will also be in charge of arranging the exchange of contracts and financial transfers. Our specialist commercial law solicitors are on hand to answer any questions you may have along the way.
The Buyer’s solicitor
The buyer’s solicitor will be sent the contract pack, which will include title documents, CPSE replies and the draft contract for sale.
The buyer’s solicitor will also need to carry out due diligence for the property. They will usually review, raise enquiries on and report to the buyer on the following:
- Any survey that has been carried for the property.
- Any searches that have been instructed.
- Title documents.
- Draft contract for sale.
- Replies to relevant CPSEs.
Your solicitor will then respond to any enquiries that the buyer’s solicitors have raised.
Once due diligence has been completed then the documentation will need to be agreed. Documents include transfer deeds and the contract for sale.
The buyer will be required to put down a 10% deposit to proceed with the exchange of contracts. Once the exchange has taken place, a date will be set for completion and this date is legally binding.
On the completion date, the buyer’s solicitors will send the completion funds across to your solicitor, who will then complete the sale.
Once completion has taken place the buyer becomes the legal owner of the property and you will need to hand over the keys to the property. Your mortgage will be discharged, and the sale is complete.
How can you make this all happen in the best way possible?
First of all, it is important to make sure that your property is prepared for sale. This means getting it up to standard and in a saleable ‘state’.
Then make sure you have all the relevant details on your property ready to give to commercial real estate buyers. This will prevent unnecessary delays with getting your property on the market.
These usually include planning, authorised use, fire safety, business rates details and an Energy Performance Certificate (EPC). You will also need to provide any relevant health and safety information, such as the presence of asbestos.
As mentioned in the steps to selling above, the buyer will send a Commercial Property Standard Enquiries form with the questions they expect you to answer. So it is important to ensure you know all the necessary information about your commercial property. Your solicitor will help you with this.
Decide How You Want To Sell Your Property
There are several options open to you when selling your commercial property. You can sell via auction, property buying companies, commercial property agents, even raffles or going it alone.
Auctions are definitely one of the fastest ways to sell a property, but this may not be the best solution for you. The auctioneer takes a percentage of the money made on your property, plus you will need to cover entry fees. It can actually work out more expensive than selling through an estate agent.
It is advisable to use an estate agent that specialises in commercial property, but the decision is ultimately yours. Go through the pros and cons of each way of selling before making your final decision.
We would always advise speaking to a specialist in commercial law to make sure you understand the full implication of selling your commercial property in the way you are considering.
Make Your Property Attractive To Buyers
Make sure that your property is properly prepared to make it more attractive to potential buyers. If your property is looking a bit shabby, it may be worth investing a little money to spruce it up a bit. Get it looking like a place that someone will want to buy.
Contact one of our specialists in commercial law to discuss how we can help you sell your property today.