Commercial property is real estate that people use for business purposes. Selling commercial property takes time, and people need to consider many things before pursuing this task.
What does commercial property include? It includes big business including malls, industrial estates, manufacturing sites and more.
Why Do People Invest in Commercial Property?
Commercial property makes for a sound investment under property law. Moreover, some common issues that residential tenants face aren’t present when dealing with company leases. Commercial property use triple net lease.
A triple net lease is a lease agreement on a property where the tenant promises to pay all the expenses of the property, including real estate taxes, building insurance, and maintenance.
What Happens After Selling Commercial Property?
Once the seller and the buyer agree on the Heads of Terms (the documents that sets out main factors of the transaction), they send it across to their lawyers who help them with the rest of the process.
They will then share the contract package to the buyer’s lawyer or representative. The contract package includes important documents like the draft sale contract, title documents and commercial property standard enquiries.
The buyer’s side then executes a process of due diligence. The buyer’s solicitor will conduct necessary searches and raise any findings if deemed necessary.
Since the buyer’s solicitor will rely on search results from various bodies, this transaction process may take longer than expected. Moreover, they may request for additional information like business rates information from you.
If they are happy with all the information, the buyer’s side will negotiate and agree on terms of contact. The transfer deed can be registered at the Land Registry and will pass the legal title to the buyer.
Final Steps Of Selling Commercial Property
If you have a loan secured against the property, your lawyer will secure a final redemption figure from your lender so your solicitor knows the exact amount that will be required before releasing the mortgage.
Upon completion, the balance of the purchase monies is sent to your solicitor, your mortgage will be released, and you will be sent any remaining sale proceeds. The transfer deed and legal title are then passed to the buyer once conditions are met.
Selling commercial property is not an easy task. It involves lengthy procedures which can get quite complicated if not handled properly.
Property lawyers have in-depth technical knowledge about buying and selling property – be it commercial or residential. Therefore, it is advisable to seek legal guidance from property lawyers who have a wealth of experience in this area.
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