What is commercial property?
Commercial property covers a wide range of property including shops, retail units, workshops, industrial units, factories, office blocks and development land. Commercial property can be either freehold or leasehold. Both types of commercial property raise different legal issues and typically commercial property transactions involve both types. When buying or selling a freehold commercial property there is often a tenant in place with a lease who is paying rent. Alternatively, the buyer or new tenant may be looking to rent the commercial unit to a tenant and will need advice regarding granting a new lease to a tenant. Commercial landlords, tenants and those buying or selling freehold commercial property will always need expert legal advice to avoid the many costly pitfalls that lie in await.
Why is specialist legal advice needed?
When you combine the various types of commercial property with the many different transaction structures to meet the needs of businesses and commercial lenders, each sale, purchase and lease is unique. However there are some issues common to each commercial property transaction. The following are just a few examples
Legal rights, obligations and restrictions
When buying a freehold commercial property the title deeds may contain covenants, third party rights or restrictions that will restrict or prevent your intended use of the property. In this case forewarned is forearmed. Our commercial property lawyers will not only alert you to these issues, which could cripple your business, but we can advise you on the possibility of overcoming, or even removing them so your search for a suitable commercial property is not right back at square one.
A lease is a legal document that regulates the use of a property. Leases contain clauses which can be onerous to landlords and tenants alike and can be complex. Whether you are a tenant acquiring a lease of a commercial property, or you are buying a freehold commercial property with a lease and tenant in place, the golden rule is ‘buyer beware.’ Landlord and tenants always need legal representation because if detailed, specialist legal advice regarding key clauses (such as rent, rent review, break clause, insurance, repairs and the length of the term) is not obtained you could be tied into a long and expensive lease. Using our considerable experience and knowledge of landlord and tenant law we can highlight these issues early on in the transaction and take the necessary steps; including negotiating the terms with the other party’s legal representatives to address them.
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Service charges and other costs
Often a lease will require the landlord to provide services to the tenants of a building or industrial estate. The types of services depend on the nature of the property but commonly include, maintaining common parts and footpaths, cleaning and decorating the exterior of the property. In return the tenant reimburses the landlord for these costs. If a tenant rents part of a building, for example a ground floor shop, then they may have to pay for part of the landlord’s building insurance premiums. The amount of service charge payable is rarely a fixed figure and tenants need to know what they may be paying for in the future. Also, there are strict requirements regarding the enforceability of service charges. If legal advice is not sought from a specialist commercial property solicitor a landlord may find himself unable to reclaim money from tenants for costly works simply because they have not followed the correct procedures. We ensure landlords and tenants are fully aware of service charge provisions and their implications prior to agreeing a lease or buying a property subject to a lease.
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Finance and Lending requirements
Commercial lenders often require further information and guarantees over and above those required in a residential property transaction. This is because the risks involved are often greater. This in turn creates a need for more complex legal documentation, such as legal charges and personal guarantees, and more detailed property searches, including water and drainage searches, local authority searches, planning reviews and environmental reports. Commercial lending requirements are the main cause of delays in commercial property transactions. Our team of specialist commercial property lawyers are regularly instructed by large commercial banks so we have an in-depth working knowledge of banks’ finance requirements, allowing us to avoid unecessary and costly delays.
The Business Law solicitors approach.
Our solicitors give clear and easy to understand advice based upon the contents of the legal documents, the other party’s replies to our extensive enquiries and our lawyers’ practical knowledge of the commercial property market.
We provide an accurate estimate of the likely timescale and costs involved at the outset so you can make your plans with confidence.
Our team of commercial property lawyers have substantial experience of all types of transaction combined practical knowledge with in-depth technical expertise. In short, theres nothing which can surprise us when it comes to commercial property.
This combination of practical experience and technical knowledge means we can deal with transactions quickly and efficiently, working within the tight deadlines commercial property transactions often require.