It is important, however, to ensure that, in whichever capacity you are involved, you are represented by a specialist who can act in your best interests and that you are well informed of the processes throughout.
This short and simple guide aims to summarise to you what to expect over the course of your commercial premises purchase with Dunn and Baker in the hope it will make your next commercial transaction seem clearer and more informed:
1. Pre-Contract – Investigating title
You may have heard of the ‘buyer beware’ principle in English law, which places the onus on a buyer of property to investigate the property and to ensure they are satisfied before they exchange contracts. It is therefore essential for us to carry out your required searches to ensure the property you are purchasing (or leasing) is correct for you and your business needs.
These searches will typically include, amongst others, title searches, local authority searches, environmental searches and drainage searches.
As well as the abovementioned searches, we will raise commercial property enquiries with the seller or landlord.
Once the results of the searches and replies to enquiries are received we will review them carefully and if necessary raise additional enquiries to clarify the replies already given or results of our searches in the event that they reveal any adverse issue.
After our investigation, we will report to you on any issues that might be revealed and take your instructions on how you would like to proceed in light of those issues.
2. Contract stage
We will have received from the purchaser a draft contract or lease by this stage. We will then, based on your instructions, negotiate with the seller the best terms we can and take your instructions if there any terms that we consider are more onerous than we would typically expect.
3. Exchange of Contracts
Once you are satisfied the contract or lease matches your needs, the next stage would be to exchange contracts with the seller or proceed straight to completion of the lease with the landlord. It is at this time that the contract or lease becomes legally binding and on a purchase it will be necessary to pay over the agreed deposit or in the case of a lease, pay the advance rent and rent deposit.
We would typically recommend a period of time between exchange and completion, but often it is the case in commercial transactions that contracts are exchanged, with completion following immediately thereafter.
We will then attend to the registration formalities such as paying the SDLT and registering the land into your (or your company’s) name.
There are many variations on the abovementioned process, but we hope that it proves useful as a very basic introduction. If you would like to discuss any potential commercial property transactions, please contact a member of our Commercial Property Department today:
Exeter – 01392 285000 Newton Abbot – 01626 330127 Cullompton – 01884 33818