You may likely have bought or sold a residential property but it’s important to recognise that commercial property sales are handled quite differently. The legislation that regulates the process of commercial property disposal is more complex and requires specific knowledge and experience.

Whether your sale is seemingly straightforward or not, getting the best financial return on your commercial property investment is essential, as is, ensuring the transaction is efficient and binding. The longer a deal takes to complete, the chances of the deal falling through increase. We’re here to keep things on track and ensure the sale reaches a satisfactory conclusion for you, the vendor.

Types of property

Unlike the sale of a residential property, where the main consideration is often whether it is lease or freehold, there are many more complexities in selling a commercial property.

Office real estate is perhaps the most undemanding type of sale but all classes of properties from warehouses to retail, food and drink establishments, hotels and hospitality venues, to factories, storage and distribution centres, will all have particular contract nuances.  

The buyer will undertake due diligence on the property to determine what, if any, risk is involved which may impact the sale. This may mean they want to adjust the price, or obtain warranties or indemnity insurance, all of which can slow or hinder a sale.

Types of buyer

Selling a commercial property can feel like a game of chess, with both parties edging towards a conclusion but with many strategic moves made before that is reached.

We can help you understand who you are selling to and what the motives for the purchase might be in order to anticipate any negotiations.

A purchaser buying for their own immediate business needs may have different needs to a property developer or someone buying purely for investment purposes.

The commercial sale process

As the seller, we will help you prove that you have the right to sell the property and that there are no legal inhibitions that prevent such a transaction. On your behalf, we will need to disclose any planning applications, building warrants, statutory notices, and terms of occupancy (if leasehold) via a Property Enquiry Certificate.

Once the buyer is ready to formalise interest in the commercial property, a written legal offer is prepared and submitted by the purchaser’s solicitor and we will discuss the offer and its many legal conditions with you.

We then send a written (usually qualified, i.e. qualifying and revising some of the many legal conditions in the purchase offer) acceptance back. This exchange of letters between solicitors is known as ‘missives’. 

The purchaser’s lawyer consults with their client and goes through the acceptance to check if the qualifications are acceptable, and either tweaks them in a further missive back to us or accepts them in writing.

Missives may also include clauses with protections for either party i.e. the sale being subject to a survey, planning permission or licensing as examples. Missives may also account for ‘overage’. Often associated with but not exclusively linked to the sale of commercial land, overage is a contractual mechanism which allows the seller to benefit from any uplift in the value of the land or property being sold in the future. This is often important if the property has significant development potential.

When the conditions of offer and acceptance are eventually agreed, the missives are concluded and there is a binding contract from which neither side can withdraw without penalty. 

We then issue the buyer’s solicitor with the title deeds, searches and property reports, and they draw up a new title deed in favour of the buyer. We deal with questions realised about the titles, the searches and reports, and arrange for the client to execute the new title deed in favour of the purchaser.

This is then held by us until the completion date/date of entry, and this is handed over in exchange for payment of the full purchase price, either by a solicitor’s cheque or an electronic bank transfer. If there is a commercial mortgage on the property, we pay that off from the sale money, and account to the client for the balance exactly, after settlement of fees and outlays.