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What’s involved in a commercial property purchase?
20th May 2014

When you purchase a property the process will be as follows:

1. Once you have agreed the heads of terms with the seller you should then call or email us for a fee quotation.
2. Once we have sent you the fee quotation you should then confirm that it is approved and we will send you our client care letter; terms of business together with our purchase details forms.
3. You should complete all these forms and send them back to us.

Pre-exchange
1. We will receive from the sellers solicitors the following:
a. Draft contract for sale;
b. Copies of leases if it is a sale subject to leases;
c. Replies to commercial property standard enquiries;
d. Copies of the registered title of the seller
2. We will then review these documents and raise enquiries of the sellers solicitors. We will also begin to prepare your report on title and submit for searches.
3. As and when we receive replies to enquiries we will continue to amend our standard report on title together with details of the search results.
4. If the property you are acquiring is subject to leases, we will also draft you reports on leases and make enquiries of the tenant concerning the lease.
5. We will then report to you on the title and certify it as good and marketable.
6. When we receive your mortgage offer, we will then do a letter to you advising you as to the terms of the mortgage and also request your deposit.
7. When we receive your deposit we will contact the landlords solicitors and proceed to exchange contracts with a fixed completion date.

Between Exchange and completion
1. We will send to you the transfer deed for signing which is the deed which will vest the property into your name.
2. We will also send you a completion statement advising you how much you need to deposit with us in order to complete.
3. We will also send in a report on title to your bank requesting the monies for the day before legal completion.
4. We will carry out our pre completion search known as an OS2 and also a bankruptcy search known as a K16.

Completion
1. Once we have all the monies in our client account we will send the sellers solicitors the completion monies and agree to date the transfer deed.
2. The sellers solicitors will then send to us the transfer deed and any rent authority letters addressed to Tenants if you have purchased a commercial property subject to leases.

Post completion
1. We will then send the transfer deed to our post completion department. They will proceed to submit to the Land Registry the transfer deed together with the legal charge for registration.
2. Once registered we will receive what is known as the title information document which we will then proceed to send to you and your lender.
What searches do I need?

We normally advise clients to carry out the following commercial searches on a commercial property purchases.
– Local search;
– Drainage and water search;
– Environmental search;
– Coal search;
– HS2 search;
– Chancel search;
– Flood search;

We do however appreciate that commercial searches are very expensive however, we would never recommend anyone to enter into a commercial lease without at least carrying out a commercial search.

The searches would reveal the following matters:

Local search
This search is carried out at the council. It will reveal matters such as the planning history of the property; whether or not any works have been done to the property which building regulations approval was required for; whether the property abuts the adopted highway; whether or not there are any financial charges registered against the property by the local council.

Drainage and water search
This search will reveal if the property is connected to the mains drains and water; it will reveal if there is a surface water drainage charge.

Environmental search
As a purchase, you may become liable for any on site or off site contamination, even though you did not cause the damage. The costs of remediating the ground can be very expensive and as such you should carry out an environmental search to see the extent of any liabilities.

Coal search
We would recommend a coal search, if the property falls within a coal mining area. This search would basically check to see if the property is at risk of subsidence.

HS2 search
A lot of the country will be subject to compulsory purchase orders, for the new HS2. It is therefore strongly advised to carry out this search to see if the property you are about to buy falls within this area.

Chancel search
We would recommend this search, it will reveal if the property you are purchasing falls within an area which, could have a potential liability to contribute to the repair of the church chancel.

PLS Solicitors specialise in advising on the complex area of commercial property, especially Commercial Conveyancing. We offer a friendly, efficient and effective legal advice on any area of commercial property.

Get in touch for a free conveyancing quote or advice, without obligation.

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