Buying and Selling Commercial Property
There are fundamentally two ways of owning a property. It is important you understand the difference as it affects buying, owning, maintaining and selling your commercial property.
If you purchase a commercial freehold property, you buy that property in the same way you would a private residence.
The benefits of purchasing a commercial freehold property:
- Exclusivity – you own your own business premises;
- Modification – you can modify the premises as you see fit (with planning permission);
- Income – it is a potential source of income as you have the option to let the whole, or sub-let part, of your property;
- Serviced finance – If you purchase with finance, your mortgage payments going out are often lower than monthly rent that can be collected from letting out the premises to tenants (a monthly rent that you can raise during the life of a tenancy to account for market changes);
- Ownership and exit – you gain a tangible asset that you can sell at your own discretion, usually only subject to any finance arrangements you have attached to the property; and
- Clear costs – apart from outgoings you attach to the property, for example a mortgage, there is unlikely to be any further ongoing (and often variable) costs, which are common place in leasehold properties under rents, service charges and insurance rents.
Although you do not own the property, leasing a property has its own benefits, including:
- Movement – with suitable rights included in your agreements and your consideration of the term you sign up for, there is an element of flexibility to move to new premises without needing to go through a sale process beforehand;
- Maintenance – it can be arranged for landlords to assume responsibility for the maintenance and repair of the premises (certainly for the exterior of the building, accessways and areas of the building shared with other occupiers);
- Capital – you invest less capital upfront as leasehold properties tend to be cheaper; and Set ownership – you can own the property for a set amount of time and factor this in to your business plans.
Our commercial property experts will also help you review practical commercial issues so you can consider if leasehold or freehold ownership is right for you.
Once your commercial property requirements have been established, our experts will look at secondary issues which could impact your future plans after any acquisition. It is very important, if purchasing a leasehold commercial property, to check the terms of any lease in place to determine basic matters, such as how long remains on the lease, through to more complexed issues, for example restrictions on how the property is used.
Accountancy and tax issues will be reviewed and our goal will be to drive real significant change and value in your business.
Negotiations will be done on your behalf to get the most beneficial terms on all fronts for your business, both within any acquisition and going forward.
Disposing of a property is significant to a business as it can boost income and capital returns. It often comes at a point of significant growth or change in a business.
Whether you are considering a complete disposal, by selling your commercial property interest or surrendering a lease, or exploring sub-letting options to temporarily dispose or your own occupation of all or part of your commercial property; we can help.
Our commercial property experts can review your plans to maximise your commercial goals from any disposal and then apply the relevant legal processes and documents. They will also help you with all related documentation for your plans, including change of use documents, obtaining consents from your own landlord, lenders or local authorities and temporary licences.
How can JLN help you?
Acting for clients on acquisitions and disposals of all types and sizes has led to us gaining particular experience in the following areas:
- Acquisitions and disposals of freehold and leasehold properties;
- Business purchases and sales with property involvement;
- Leasehold landlord and tenant negotiations;
- Serviced office arrangements;
- Dealing with commercial or mixed-use properties subject to leases;
- Agricultural land deals;
- Property due diligence and registered title analysis; and
- Commercial licences and short-term licence to occupy agreements.
We also identify and advise on other relevant areas of law, such as; mergers & acquisitions, corporate law, finance law, competition law, intellectual property law and tax law.