When buying a commercial property, there are lots of things to consider, especially if this is your first commercial property.
What Are You Purchasing?
Firstly, you will need to consider whether you are purchasing just the property itself (ie. the bricks and mortar) or also any existing business being run from the property. If it’s the latter then, in addition to instructing a commercial property solicitor, in most cases you will also need to instruct a corporate solicitor who can deal with the purchase of the business for you (for example, the shares or assets in the business, any goodwill etc).
Do You Need Planning Permission?
Secondly, you will need to establish whether planning permission is required for your intended use. A Local Authority search will reveal any planning permission granted for the property, but the seller’s agent should be able to advise you in this regard so that you can begin to consider any planning issues from any early stage.
If planning permission is required, you will need to instruct a planning consultant to advise you on the chances of success and to submit a planning application for you. Most applications will take several months to deal with so you will need to discuss with your solicitor whether a conditional contract for the purchase of the property would be beneficial. By their very nature these contracts are more complex and time-consuming to deal with, however, than non-conditional contracts.
Get a Structural Survey
Another important early step is to instruct a structural survey of the property. This is crucial as it will reveal whether there are any structural concerns with the property, which could be expensive to resolve. Instructing this before going too far down the line could save you legal costs if in the end you decide to withdraw due to the poor condition of the property.
Freehold or Leasehold?
Once you have instructed a solicitor, you will also need to check whether you are purchasing the freehold or leasehold of the property. Purchasing a freehold is usually more straightforward. If the property is leasehold however, make sure that you are clear on the terms of the lease and that you are satisfied with these, as it is very unlikely that you will be able to change these at any point.
Bear in mind that if you are purchasing with finance, your lender also has to be satisfied with matters, so purchasing with finance is always a little more complex than purchasing cash. Your solicitor effectively has two clients, not one, and may need to report certain matters to your lender before proceeding.
Obtain an Energy Performance Certificate
Lastly, make sure that you obtain an Energy Performance Certificate (EPC) for the property from the seller. The seller has a legal duty to provide one. If you have purchased a residential property as a commercial investment and you intend to let it out to tenants, the property must have a minimum of an E rating on the EPC. However, from April 2025 all rental properties will need a minimum of a C rating, so if the property falls short of these ratings, you will need to consider the cost of works required before purchasing the property.
Contact a Commercial Property Specialist
Here at Farleys, we have a team of commercial property experts on hand to assist first time buyers with their commercial property purchase. We provide legal expertise with a down to earth approach and won’t baffle you with legal jargon. To speak to one of our specialists please call 0845 287 0939 or complete our online contact form.