‘Once you have agreed a deal to sell your property, you want it to go through as quickly as possible,’ says Jeremy Redfern, Partner in the commercial property team with QualitySolicitors Parkinson Wright. ‘Some delays may be down to the buyer raising issues at the last minute, but there are plenty of things you can do to help things run smoothly.’
Jeremy sets out what to expect in the run up to completion, and some key points to prepare for so that you can work closely with your solicitor to deal with problems quickly or, even better, avoid them all together.
Confirming information about the commercial property
Your solicitor will have produced written replies to standard form enquiries about the property fairly early on during the transaction. These set out what you, as the owner, know about the property and will disclose any issues that the buyer is entitled to be told about. While drafting the replies, your solicitor will have asked you questions about the property and will have sent draft versions for you to check. Replies to enquiries will have been given to the buyer before you exchanged contracts, and then just before completion you will be asked to give formal confirmation that the information in the replies is still accurate.
This means that you must check whether anything has happened or you have received any new information since contracts were exchanged. For example, if you said you were not aware of any asbestos investigations having been carried out but you have just come across an asbestos report you had forgotten about, you must disclose it at this point. If you do not, your buyer might be able to claim damages for misrepresentation or even undo the deal. If your buyer is financing the deal with a loan, your solicitor may be producing a certificate of title for the lender. Again, this will set out a standard set of statements based on what you know about the property and you will be asked to confirm just before completion that everything in the certificate is accurate.
Signing the documents
Your solicitor will send you the transfer and any other transaction documents to be signed before completion. They will need to be signed as deeds, which means there are extra formalities involved. If you are selling as an individual, your signature must be witnessed by someone else. If you are selling the property through a company, you can have the documents signed by two directors or by a single director with a witness.
Make sure you tell your solicitor well in advance how you want to execute, so they can draft the signature section correctly. It is particularly important to warn your solicitor if anyone will be signing the documents under a power of attorney, because your solicitor (and the buyer) will need to see a copy of the power to make sure everything is in order.
If you know you will be unavailable for any specific periods, let your solicitor know so they can plan around it. Trips abroad are less of a problem now that many documents are executed electronically, because you can view and sign them anywhere as long as you have a mobile phone signal. The most important point to understand is that whoever witnesses your signature must be physically present with you when you sign. It is not acceptable for them to watch via a video call, whether you are signing electronically or on paper.
Last minute problems
It is not unusual for a buyer to raise issues at the last minute. For example, their search results could be delayed; there could be missing planning or building regulation consents for works done to the property in the recent past; or there may be unresolved title issues. For example, a historic restrictive covenant that needs to be complied with - without the buyer knowing in advance exactly what it is or whether anyone is likely to enforce it.
The solution to these issues is often indemnity insurance. Your solicitor should be able to warn you in advance if any of these problems look likely, so you can have insurance ready to offer if required.
Something else you and your solicitor can anticipate is whether the buyer will need any consents or certificates from third parties like lenders or adjoining owners before they can register their purchase. You should approach those people as early as possible, because they will have no real interest in your deal and can often move quite slowly. Your solicitor will also be able to draft any deeds of covenant that the buyer will need to enter into on completion. For example, this could be where you as owner of the property have an obligation to make a financial contribution towards maintaining a shared facility and this obligation needs to pass to the buyer.
What if your buyer is just dragging their feet?
If the completion date you agreed in the contract has passed and you are ready willing and able to complete, but your buyer is not getting on with it, the last resort would be for your solicitor to serve a notice to complete.
This would set a reasonable time within which the buyer must complete. If they do not, you could withdraw from the deal and possibly keep the buyer’s deposit. If it looks as though you need to go down this route, your solicitor will explain all the likely consequences in detail, so you can make an informed decision.
How we can help
Planning ahead is the key to ensuring any commercial property sale goes smoothly and completes in good time. Our experienced commercial property team will make sure you know exactly what you need to do in the run up to completion, as well as spotting possible problems in advance and working out how to avoid or solve them.
For further information, please contact Jeremy Redfern in the commercial property team on 01905 721600 or email worcester@parkinsonwright.co.uk
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.