Perhaps the title should ask: how do you sell a commercial property and not live to regret it? There are a lot of details in the process that can be easily overlooked; leading to delays, unexpected costs and possibly a lost sale.
Here is a quick checklist of the points you will need to consider. But let’s start with the most important one: take professional advice as early as possible so that you can weigh up the pros and cons and plan out your best course of action.
What to Consider
Here are a few of the factors you will need to take into account:
- Current occupation. The length of any existing lease agreement with a tenant will affect the value, as will their financial standing or ‘strength of covenant.’
- Mortgages. What loans will have to be redeemed to dispose of the property?
- Fixtures. Are there any fixtures that you will need to remove? Are there any items such as stock that you will sell separately?
- Tax. In which tax year do you want the sale to complete? Will VAT be chargeable on the sale?
- Are you aiming to sell a business or ‘going concern’ with the premises, including employees?
- Environmental issues. Will the EPC need updating? Are there any waste consents and is an asbestos survey needed?
It’s probable that you will need to choose an estate agent that specialises in commercial premises to market the property. Once you have a suitable buyer, your solicitor will take care of the following:
- Once they have your agreed heads of terms, obtaining your title documents from the Land Registry.
- Negotiations with the buyer or buyer’s solicitor and answering any queries.
- Drafting the sale contract.
- Exchange of contracts including handling the deposit.
- Contract completion and financial transfers (including settling outstanding mortgage loans).
How Much Does it Cost to Sell Commercial Property?
The costs will vary depending on the property and circumstances. You will need to budget for agents’ and solicitor’s fees as well as any mortgage redemption fees. You may also have a liability for Capital Gains Tax.
The Business Team at Powellslaw have many years’ experience in commercial property transactions. If you have any other questions related to commercial property, either as a property owner or tenant, you might find our factsheet useful.