You may be thinking about selling your commercial property, but you may not know where to start.
Commercial property transactions can be quite complex and lengthy, but we are here at Jackson Lees to guide you through the process, advise you on the best options available to you and ensure you have a broad understanding of the nature of the transaction at hand.
We have set out below the steps to be followed when selling your commercial property:
Heads of terms
Before the contract is prepared, there will usually be discussions between yourself and the buyer where the key terms of the transaction are agreed and formulated into a document. This document is called the Heads of Terms.
The points to be considered and agreed are the extent of the land being sold, the purchase price (including any VAT), any special conditions, timescales, and the appointment of solicitors.
The document is referred to as non-binding, but it forms the basis of the sale contract. We can advise on the Heads of Terms before you finalise them, to ensure you consider all options and negotiate the best deal for you.
Do you need assistance with your contract? Make an enquiry.
The involvement of solicitors
When the Heads of Terms are agreed between you and the buyer, they will need to be circulated to the appointed solicitors.
Your solicitor will first need to carry out their file opening formalities including obtaining your identification documents.
Your solicitor may also request for money to be paid on account before undertaking any work.
Request a call back from a solicitor.
Pre-contract steps
Your solicitor will now look to obtain the title documents from the Land Registry (assuming the title is registered), examine the documents and prepare a contract pack to send to the buyer’s solicitor.
A contract pack usually consists of the sale contract (drafted in accordance with the Heads of Terms at point 1 above), title documents, EPC, and replies to Commercial Property Standard Enquiries (CPSEs).
CPSEs are lengthy documents, and your solicitor will be on hand to provide assistance where required. It is extremely important that the information provided in the CPSEs is accurate and you can verify the same. The buyer will rely on the information provided.
The buyer will use all the information provided in the contract pack to carry out their own due diligence. This will involve their solicitor reviewing the contract, title, CPSEs and supporting documents, ordering property searches and reviewing the results.
This process can take some time and the buyer’s solicitor will report to the buyer on all the documents. The buyer’s solicitor may even raise additional enquiries if necessary. The buyer needs to be satisfied that they are purchasing a property with a good and marketable title.
Call today and examine your pre-contract steps.
Contracts and exchange of contracts
Once the contract is in an agreed form both parties will sign the contract and agree on a date for exchange. The payment of a 10% deposit is usually required, and the buyer’s solicitor will request these funds on account in readiness to exchange the contract.
The exchange of contracts is when the sale and the purchase becomes legally binding. On exchange of contracts, the buyer’s deposit is paid and sent to your solicitor. This process is usually carried out by telephone and your solicitor will confirm with you when this has taken place.
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Pre-completion steps
In readiness for completion, your solicitor will undertake the following: -
- Request a redemption statement
If your property is subject to a mortgage, then your solicitor will need to request a redemption statement from your mortgage provider. This will ensure your solicitor knows exactly how much is required to discharge your mortgage on completion.
- Prepare a completion statement
This will be sent to the buyer’s solicitor setting out the amounts due on completion.
- Provide undertakings to the buyer’s solicitor that any mortgages will be redeemed on completion.
- Approve the draft transfer deed prepared by the buyer’s solicitor which you will then sign.
Call today and find out what steps you need to take.
Completion
On completion, the buyer’s solicitor will send the completion monies to your solicitor and your solicitor will complete the transfer deed by dating it.
From this point, the legal title to the property has passed to the buyer and once you have had confirmation that completion has occurred, you will need to hand over the keys for the property to the buyer, as legal completion has taken place.
At this point, any mortgage will be redeemed and your solicitor will send your signed transfer deed and title documents relating to the property, to the buyer’s solicitor.
Contact our experts
If you are finding yourself with a commercial property query, acting quickly gives you the best chance of success. Our commercial property solicitors can help advise on the best course of action to take while protecting your legal position every step of the way.
Please contact either Victoria Evans (Head of department and solicitor) or Rebecca Emmitt (solicitor) at vevans@jacksonlees.co.uk or remmitt@jacksonlees.co.uk.
Call us today on 0151 282 1700, request a callback at a time that is convenient for you, or make an enquiry today