The old saying really is true: “by failing to prepare, you are preparing to fail”. You’ll be surprised how much preparation can be done on a property sale before you’ve even found a buyer or agreed commercial terms. You could be saving yourself time and money down the line by planning ahead.
Here are our top tips for planning ahead:
1. Ask your solicitor to review the title to your property
There may be outdated entries such as expired leases that need to be removed, unknown covenants and easements noted on the title that can be mitigated with indemnity insurance or even redeemed mortgages that need to be discharged.
If your land is unregistered then your solicitor can review the deeds to ensure you have good title to the property and then prepare an ‘epitome of title’ that can be sent to a buyer’s solicitor to streamline the buyer’s due diligence process.
2. Obtain any consents
If your land is charged, you will need your lender to consent to the sale and to release their legal charge on completion. Liaise with your lender as early as possible to obtain their consent in principle and an estimated redemption figure.
There may also be restrictions on your title that require third party consents to a sale. Often, this will involve negotiating and agreeing documentation that needs to be entered into as a condition of that consent. Early action will prevent potential delays down the line once a buyer is found.
When dealing with transfers of part or unregistered land, accurate plans are crucial. Instruct a surveyor to prepare a Land Registry compliant plan which your solicitor can then send to the Land Registry for approval.
4. Planning and building regulations
Buyers will likely require details of the planning history of the property to ensure that (i) it can be used for their intended use and (ii) there are no breaches which the buyer may be on the hook for after completion.
Ensure that you have copies of planning permissions, section 106 agreements, evidence of discharge of any planning conditions and building regulations completion certificates. If you are missing anything then copies should be obtainable from the local planning authority. This may not be a quick process and so sellers would be wise to not wait until a buyer is lined up to do this.
If your property is occupied by third party tenants and you are selling with vacant possession, you should ask your solicitor to check the terms of their occupation to ascertain how to obtain vacant possession on completion.
If you are selling the land subject to a lease than make sure your management information is up to date and can be easily provided in a readable format to prospective buyers. Now may also be a good time to deal with any problem tenants that may put off potential buyers.
6. Sales Pack
Finally, ask your solicitor to prepare a sales pack that can be sent out to a buyer’s solicitor as soon as a deal is agreed. A sales pack should include, amongst other items, full title to the property, full replies to Commercial Property Standard Enquiries (which your solicitor can help you prepare in advance), details of the planning history of the property, a plan of the property being sold (if applicable), any indemnity policies affecting the property, details of any lettings including management information and any consents in principle to the sale.
Whilst some may baulk at the idea of going to such efforts (and cost) before they even have a buyer lined up, the benefit of following these steps in advance is invaluable. Not only will it ensure that a sale, once agreed, progresses as quickly as possible, you could also be saving money in the long run. Planning ahead will avoid the buyer’s solicitor raising rafts of enquiries and could also avoid the buyer, at best, seeking a price reduction for any issues and the delays they will most likely cause or, at worst, pulling out of the sale.
If you would like assistance with preparing for a forthcoming property sale, with a sale on which terms have already been agreed, or any other commercial property matters then please contact Alexandra Kirkwood (firstname.lastname@example.org) or another member of our commercial property team.