Commercial properties have a whole lot of complexities more than residential properties when it comes to buying and selling them. The key difference is that while residential properties are bought in a vacant ready-to- move-in condition, commercial properties will in all probability be occupied and under lease. Hence, the legal ramifications of commercial property conveyancing will be far greater than their domestic counterparts.
A purchaser of commercial property has to look into various aspects before making a choice. A provision might have to be made for future business expansion and thus it has to be ensured that occupation and area of the property is flexible. If necessary, with growth in business, adjoining properties too might have to be acquired. Further, many buyers prefer to take properties on lease and pay rent for a few months before committing large sums to buying it up. All these can be deftly handled by a top end commercial property lawyer. Hence, it is always advisable to involve a commercial property lawyer right from the decision making stage of selecting a suitable property to settlement and completion of the contract.
There is another side to conveyancing of commercial properties. Unlike residential plots or vacant houses, commercial premises are often bought and sold along with the existing business running there. Generally, the purchaser of the property will carry on the existing business along with plant and machinery in case of factories or inventories and consumables if it is a retail business. The staffs too are usually retained to maintain seamless continuity of the business.
It is not too complicated to put a price on all these variables but the problem arises when “goodwill” of the business that is being taken over has to be considered. This type of sale is commonly called sale of a business as “a going concern” and will naturally require an additional payment, the quantum of which a seasoned commercial property lawyer can work out. One of the top law firms considered as leaders in this field is PB Lawyers who have vast experience and professional expertise and skills in this regard.
In cases where property is freehold, lawyers will carry out intensive searches to establish clear title and marketability of the property. This is very important as more often than not, commercial enterprises and businesses keep the land and built-up buildings and premises as collateral to avail of financial limits. Banks and financial institutions will accept deeds of property for mortgage as security for various fiscal limits only if the ownership of the premises is clearly established without any encumbrances. Carrying out searches is generally not done when a short lease is taken on a property.
There is more to conveyancing of commercial property than the points that are mentioned here. A good commercial property lawyer will help clients in the following activities too.
- Checking for zoning of property to ensure that setting up commercial activities or industrial estates there are permitted
- If the property is under lease, whether there will be any conflict of usage with the intended scope of business
- If there is plant and machinery or buildings, their present condition as this will influence the purchase price
Getting a reputed commercial lawyer is therefore crucial to commercial property conveyancing.