White Horse Solicitors & Notary Public offers specialised professional Commercial Property solicitor services. We ease client stress through duration of complex process of purchasing, leasing or selling Commercial Property. Our services extend from Commercial Property services to Landlords and Tenants. We are committed to delivering high quality service to our corporate and business clients.
It can be extremely cumbersome and full of financial burden if you are having to assign a lease without complying to requisite legal requirements. We offer the correct guidance to aid your negotiation with your Landlord if you wish to assign remaining part of your Lease to an alternative prospective Tenant. It must be understood that illegal assignment of the Lease can means breaching of the covenant of lease, thus could result in forfeiture proceedings. As a result, the Lease can be terminated and possession of the Lease may return back to the Landlord. As experts in commercial conveyance, we will give you full comfort that everything you act on is within the law. We will prevent all potential risks and problems that could cost you time, energy and money including advice on assignment of Leasehold property, the goodwill and fixtures, fitting and equipment.
Lease Renewal negotiations are tedious and time consuming. That is where we come in. At White Horse Solicitors & Notary Public, our experienced and expert legal representatives ensure no less than the best possible outcome for your predicaments. We provide clarity on the unavoidable differences of opinion that take over, for example, on amount of rent being charged or other aspects such as particular lease terms.
Furthermore, we provide meticulous guidance on completion processes in unwanted circumstances. Not all Tenants for example, have the right to a Lease renewal when a tenancy expires. We make it imperative upon us to immediately direct the Tenant to instigate instant rent negotiations to allow for the terms of the new tenancy agreement to be agreed before the lease expiry date. Additionally, If the decision is made by the Landlord for the Tenant vacate, then we provide appropriate guidance for negotiating terms on new premises and, where appropriate dilapidations, which needs to be completed.
We also ensure excellent time management to cater towards different tasks. For example, if the Tenant has automatic right to renew the Lease under the provisions of the Landlord & Tenant Act 1954, then strict timetables need to be established and followed. A lease ‘protected’ under the Act can only be brought to an end by notice if the Tenant remains in occupation and is intending on renewing a lease. Failure to renew will force the termination of the Lease, thus, time is of the essence and we never turn a blind eye to that fact. We act so Tenant does not risk losing their right to security of tenure granted under Landlord and Tenant Act 1954. If this does happen however, both the Landlord and Tenant can make an application to Court to progress the grant of a new tenancy, but again, there are strict deadlines for the Tenant.
It is important that a Section 25 Notice is in a prescribed form. We hold it vital to immediately and carefully check the content. Section 25 is proposed in different circumstances such as if the Landlord wishes to keep the Tenant after the Lease expiry date. We will provide the correct advice and guidance on applying on the necessary terms.
We also provide particular assistance on timing required for renewal strategies and counter notices such as if a commercial Tenant instigates renewal negotiations (in which case the Tenant may serve a Section 26 Notice requesting a new tenancy to the Landlord).
A Licence is a lawful grant of a permission to do something that would otherwise not be legal or allowed, for example, to occupy a property. The Licence basically stops the permitted act from being a trespass and offers little security to the Licensee. Like a Lease, a Licence can attract a rent and be for a fixed term, but it only allows the licensee to use the property for a specific purpose for a defined, usually short, duration. A Lease tends to be for fixed, longer periods of time.
A Licence does not give the Licensee the right to have exclusive possession of the property in contrast to a Lessee. Following the House of Lords ruling in Street v Mountford (1985), a Tenant with exclusive possession of a property is entitled to exercise the rights of the landowner and exclude people from the land (apart from any rights the Landlord may have under the lease to enter the land to carry out repair works, for example).
A Licence creates few rights in contrast to a Lease and obligations and in general can be revoked through giving notice of revocation to the licensee allowing them a reasonable time to leave the property.
Individual companies can face a difficult and strenuous time when dealing with Commercial Property rent reviews and rent negotiations. At White Horse Solicitors & Notary Public, we use the specialised knowledge and understanding of the rent review procedure to help you and your business. You will not be left without a confident awareness of your rights as we guide you through the rental negotiations to the completion of a rent review memorandum.
Rent reviews typically occur every five years depending on the length of the lease. However, this is not always the case. We make it of high importance for our clients to know of the particular rent review time frames stipulated in the Lease. There are many issues to face if rent review is left to last minute: time limits may be stipulated on the clause, missing deadlines can occur which would prove to burden one financially. One would be compelled to pay inflated rent if this took place and could ultimately lead to Landlords entirely losing the right to rent review.
We take advantage of rent review being a time to expose good dialogue between Landlord and Tenant on any mutually advantageous existing Lease terms: inserting/deleting break options or extending the lease term. White Horse Solicitors & Notary Public will go above and beyond to attain best results for our clients whether you are a Landlord or a Tenant to reach a desirable negotiated settlement.
Through different stages of property venture, it is possible that one will need a change in terms of Commercial Property lease. For such a change to take place, different frameworks will need to be established after consideration of both Landlord and Tenants willingness to amend existing lease obligations. Whichever angle you wish to approach this restructure from, we will help and guide you to agree on revised terms. Some situations when a Lease Variation may become apparent are:
For the Landlord?
How will we assist the Landlord and his/her position? We will guide them on how marketable the building is in comparison to its competition, we will explain the levels of availability for the current day or the near future, we will present to them the dilapidations recovery versus the cost of refurbishing for re-letting and funding issues. All necessary factors will be exposed to the client to influence the right stance when negotiating potential variation to the lease with the Tenant.
For the Tenant?
How will we assist the Tenant affected in relation to the market place? We will organise for the Tenant to have quantified the financial exposures of his/her lease, we will guide their understanding of current rent levels and incentives in the market and the general availability of alternative buildings. Our legal experts will ensure to assess this properly before opening a precise negotiation.
If Tenants breach a term of their Lease which they have entered into with their Landlord- an example may be the non-payment of rent- the Landlord may enforce their right to forfeiture and exclude Tenant from rental premises. This is referred to a Landlord’s right to forfeiture. Tenants can however, often apply for Relief from Forfeiture by making an application to court whereby the court may grant the Tenant the chance to resolve the situation by granting him relief from the forfeiture. This however generally requires the Tenant to be ordered to pay arrears and costs in favour of the Landlord.
Forfeiture situations can be difficult and complicated for all involved and it is therefore vital legal expertise is at the forefront and any steps taken should be taken being in receipt of expert legal advice.
When buying a site that lacks planning permission, whether to self-build or as a developer, your plans and the ultimate value of the site will be heavily dependent on whether you can secure planning permission. It is therefore understandable to want to protect yourself against the possibility that planning permission is refused.
As a seller, you should also consider how much more valuable the land will be if planning permission is granted and may want to take action to ensure you see a share of any such increase in value.
For both buyers and sellers, there are several legal options you can use to ensure you don’t lose out whichever way a planning application goes. At White Horse Solicitors & Notary Public, our property lawyers are experts in dealing with all aspects of property law, including advising on Contracts which are conditional upon Planning.
There is a common misconception among Tenants occupying commercial premises under a lease that the premises can be handed back whenever they decide they no longer want to occupy them. Some Landlords are also under the impression that they can terminate a lease as and when they choose. Both of these views are incorrect. A lease is a contractual agreement between a Tenant and a Landlord and will last for a fixed period of time. Although some leases will include a clause that allows for early determination, most will run until they end by ‘effluxion of time’. However, there are ways to end a commercial lease early, and these processes will differ depending on who wishes to terminate the lease – the Landlord or Tenant – and under what circumstances and when. Both parties will need to be aware of their legal obligations.
Reasons for Terminating During a Lease
There are a number of reasons why a Landlord or Tenant may want to end a commercial lease early. In any event, and notwithstanding the reason, there are steps that must be taken in order to ensure that the lease can be determined. Below we outline the reasons and the complications that can arise.
A Tenant who wishes to give up possession of a property during the fixed term of a lease can negotiate a surrender with their Landlord and effect it by:
Conduct would include delivering the keys to the Landlord and the Landlord accepting receipt so that the lease comes to an end. However, both options would require the Landlord to agree to the Tenant surrendering the lease. The Landlord may also ask for a payment to be made as ‘compensation’ for the loss of rental income. Similarly, if the Landlord wishes to determine a commercial lease early, it can ask the Tenant for a surrender. In this instance, the Tenant is not obliged to agree and may accept to surrender upon payment of a premium.
A break clause is written into the commercial lease from the outset and allows a Tenant (and even a Landlord) to end a lease early by serving a notice on the other party. The lease will set out certain requirements that must be followed to ensure the break is valid, for example, the Tenant may be required to give the Landlord notice that they wish to enact the break clause, and all outstanding monies due must be paid. On the other hand, a Tenant may find that the preconditions set by the Landlord mean that the break clause is, in reality, incapable of being exercised.
If a Landlord wishes to end a fixed-term commercial lease early due to a Tenant breaching the lease, then they may be able to do so if there is a forfeiture clause in the lease. The procedure for forfeiture will depend on how the Tenant has breached the lease. For example, if the Tenant has not paid rent, then there is generally no need for the Landlord to serve notice on the Tenant. If the breach is of a different nature, then the Landlord will have to serve a section 146 notice.
Terminating After The Lease Has Expired
Ending a commercial lease on or after the expiration of its term depends on the security of tenure. Security of tenure is the right for the Tenant to occupy business property after the lease comes to an end. If the lease grants security of tenure, the lease will continue after the expiry date if the Tenant remains in occupation of the property for business purposes. In this scenario the Landlord or Tenant must serve one of the following notices to terminate the lease:
If both parties opt out of the legislation as part of the lease, there is no automatic right to security of tenure. Under these circumstances, a Tenant can vacate the property without providing notice by informing the other by writing. If a Tenant refuses to vacate the property, the Landlord will usually need to undertake possession proceedings.
The court procedure for forfeiture starts by making an application for possession in the county court. There are standard claim forms that must be completed, which can now be submitted online in some courts. The claim forms must then be served on the Tenant, usually by your solicitor, within a strict time-frame. You should always take legal advice on this as it is a complex area of law and mistakes can be costly and delay your repossession.
Tenants’ relief from forfeiture
Your Tenant can apply to court for relief from forfeiture if certain conditions are met. The Tenant does not have an automatic right however; this is a discretionary remedy available to the court, but if granted they may be able to continue to occupy the premises under their existing lease.
The Tenant should make an application as soon as they receive a section 146 notice because they will be penalised if they are found to have delayed unnecessarily.
As a Landlord of commercial premises there are many reasons why you may want to take back possession of your premises, the most common being where your Tenant is in breach of their lease terms; such as, not paying rent, not keeping the premises in good repair, being a nuisance to neighbours or assigning or subletting the premises without your consent.
Taking back possession of your premises when occupied by a Tenant is called ‘forfeiture’. However, you can only forfeit the lease if there is a specific clause in the lease enabling you to do so. It is advisable for all commercial leases to contain such a clause as without it your powers as a Landlord are severely restricted.
Where you have the right to forfeit, this can be exercised in one of two ways:
The route you choose often depends on the reason for the repossession.
Non-payment of rent
For non-payment of rent you are not required to give any notice of your intention to forfeit; you can simply re-enter the premises.
You must not do anything to acknowledge the continuance of the tenancy, such as remind the Tenant of any overdue rent, as this may amount to a waiver of your right to forfeit and you will have to wait until the next rent payment is missed.
It is advisable to leave a notice of repossession on the door of the premises and have a witness to accompany you, such as a locksmith or your solicitor.
Breach of other lease terms
For any other breaches, you must first serve a section 146 notice before you can take possession of the premises. The notice must be served by your solicitor on all interested parties, including the Tenant, any mortgagee and any subTenant. It must specify the nature of the breach and whether it requires remedial action within a reasonable time or the payment of compensation. If the breach has not been remedied or the compensation paid as required then you can proceed to forfeit the lease.
Breach of the repair condition
There are additional rules that apply for notices relating to breaches of repair. In some cases you may be obliged to offer the Tenant the opportunity to claim statutory protection. If the Tenant claims this protection, which they must do within 28 days of receiving a section 146 notice, the Landlord must make a preliminary claim for the court’s permission before taking any further action. This can be avoided if the lease contains a clause which entitles the Landlord to enter the premises to remedy any defect of repair and claim any costs incurred back from the Tenant as a debt.
A Landlord faced with a Tenant who is not paying their rent has two options: take steps to end the lease or try to recover the money owed. If you decide to recover the rent you might find the Commercial Rent Arrears Recovery Scheme a good option.
‘The Commercial Rent Arrears Recovery Scheme is a self-help remedy for Landlords which allows you to take and sell a Tenant’s goods to the value of what is outstanding. There are limits on the circumstances in which the scheme applies, but outside of these restrictions it can be a very effective way to recover what you are owed.’
The key features of the Commercial Rent Arrears Recovery Scheme – to note are:
If you suspect that the Tenant will try to move their goods to try to avoid them being seized, you can ask the court for permission to shorten the amount of warning notice you need to give them. You can also side-step the prohibition on using the scheme where any part of the premises is being occupied for residential purposes if that use is in breach of the terms of the lease.
If recovery under the Commercial Rent Arrears Scheme is not available or is inappropriate, there are a number of other options that could be considered. For example, if you took a Rent Deposit from the Tenant you may be able to use this to cover the arrears, although you need to bear in mind that if you do this it will deplete what is left to cover other breaches. This is likely to be the case even if the Rent Deposit Deed requires the Tenant to top up the deposit because the chances of the Tenant being able to do this if they are already in arrears with the rent is extremely low.
If the Tenant’s obligations under the lease are guaranteed by a guarantor, you may be able to claim the rent arrears from them. You may also be able to claim against a former Tenant who remains liable under the lease, either because they entered an Authorised Guarantee Agreement with you or because the lease was granted before 1996. Any guarantor of a former Tenant may also remain liable. There are, however, important practical points to note about enforcing against former Tenants and guarantors:
There may also be other factors at play, such as the Tenant’s possible collapse into insolvency, that need to be considered and which may justify you bypassing attempts at recovery and going straight for forfeiture instead. If this is the case you need to be careful not to prejudice your position by doing anything that could be construed as a waiver of your right to evict the Tenant, such as subsequently accepting payment of rent arrears.
When you sell land, you can agree with your buyer that additional payments will be due to you, if and when the buyer obtains planning permission to develop the property, or when such a planning permission is carried out. The payment is in addition to the agreed purchase price and is usually expressed as a percentage of the increase in value of the land.
You will need to consider the following:
The above are some reasons why the imposition of an overage or clawback provision needs careful consideration and drafting by an experienced commercial solicitor to make sure that your interests are protected and that the obligations are enforceable.
The parties to a Lease of a Commercial Business Premises will have negotiated their respective repairing obligations from the outset of a commercial transaction. The obligations therefore on the Landlord to repair the premises, or any retained parts of a building should be clear. Unfortunately- this is not always the case and some Tenant’s do suffer from the lack of adhering from the obligations on the Landlord’s part.
Once it is established that the Landlord is in breach, what can a Tenant do?
There are several remedies available, but deciding which one (or which combination) to employ will depend upon the particular circumstances. A summary of each of the main options is set out below.
This is a court order forcing the Landlord to do the works. To obtain an order for specific performance a Tenant will need to convince the court as to the urgency of the works and that any alternative remedies are inadequate. This should not be too difficult in cases where the Tenant remains in occupation with the result that the disrepair causes a continuous problem at the premises. However, granting such an order is at the court’s discretion, so a Tenant would be wise to compile a detailed schedule, clearly identifying the disrepair, and a diary of the problems it causes, to help convince the court. If granted, an order for specific performance will place great pressure on a Landlord to remedy its breaches, as failure to comply will place it in contempt of court. The works will be carried out at the Landlord’s expense (subject to any service charge regime).
There are serious drawbacks though. If the threat of a court claim is not enough to persuade the Landlord, there is the up-front cost of going to court, and unless urgency is established, it will most likely have to wait until a final hearing before obtaining an order. This cost and delay makes this option unattractive to Tenants in many cases.
Tenants can of course claim compensation for financial losses. There is no cap on the damages that a Tenant may claim against its Landlord for disrepair: the question is just how much the Tenant has lost as a result. Generally a Landlord will not be liable until it has notice of the defect. It will then have a reasonable period in which to remedy the defect before it will be in breach. A Tenant is unlikely to recover damages for losses suffered during this period unless a Landlord unreasonably delays in carrying out the works required once given notice.
A Tenant that remains in occupation of premises in disrepair will be entitled to compensation for the inconvenience, and this may result in a rental reduction. This is calculated by reference to the reduced rental value of the premises in disrepair with the assistance of an expert valuer. If the Tenant has to vacate the premises, it will in principle be able to recover the cost of alternative accommodation.
A Tenant may also be entitled to recover damages for loss of profits provided that, at the date of the lease, it was contemplated by the parties that the premises would be used for the purposes of the business that has suffered the loss. The threat of these types of claims for compensation is often enough to persuade a wayward Landlord to do the work.
A Tenant has a right to carry out repair works that the Landlord should have done to the demised premises, and to recover the reasonable cost of the works from the Landlord as damages. Caution should be exercised in relation to carrying out any works to property retained by the Landlord. Speak to your solicitor about this before proceeding to avoid a claim for trespass being brought against you. However, when used properly (and combined with a strategy for recovering the cost) this can be a very quick and effective way of resolving the problem.
If a Tenant has a genuine claim for damages against the Landlord it can sometimes recover the money by making a deduction from the rent or other sums due to the Landlord. In these circumstances a Tenant can simply withhold payment of rent and other sums until the compensation has been recovered. It does not need to issue proceedings at court. However, modern leases often exclude the right to withhold rent in this way so the lease should be checked carefully before this argument is raised.
If a Tenant can establish that a breach of a Landlord’s repairing covenant is sufficiently serious it may bring the lease to an end entitling it to leave. This is a contractual principle, upon which you should take further advice as required. To qualify, the breach will need to be of such a serious nature as to deprive the Tenant of the whole, or substantially the whole of the benefit of the lease.
Again, the threat of this approach is often a useful lever to get the Landlord to do the work.
There are various other options, which tend to be used less frequently, such as appointing a receiver or using environmental and health and safety legislation. If in doubt, speak to your solicitor.
Dilapidations represent one of the most common causes of dispute between Landlords and Tenants. From a legal perspective, fall outs of this type can be complex, and so strong and effective legal representation is essential. There are various procedures in place for this area of law, and so it is also important both Landlords and Tenants are in compliance with these.
Dilapidation claims can have significant financial implications for both Tenant and Landlord. However, this can be limited with the right legal backing from experts providing the best legal advice every step of the way.
A claim of this type will usually begin after a Landlord has served a written schedule of dilapidations on a Tenant, in which they claim for the cost of completing specific works.
These may include:
Serving a Dilapidation Schedule
Most commercial leases require the Tenant to keep the property in good repair. A Landlord can serve a Schedule of Dilapidations upon a Tenant requiring them to make repairs to the property or, alternatively, to pay damages to the Landlord.
Expert evidence from a surveyor, and often a valuation report, can be vital in dilapidation cases.
Our advice is based on the practicalities and commerciality of the dilapidation claim. We are highly experienced in both negotiating settlements and liaising between experts – something very often needed in dilapidation claims.
People buying and selling land often use option to purchase agreements or pre-emption agreements to commit the other party in the transaction to the sale. While the two agreements may seem similar, they are in fact significantly different.
What are option to purchase agreements and pre-emption agreements?
With option to purchase agreements (also known as a lease option), the buyer is given the right to buy the land for a certain period of time, and it may be subject to certain trigger events. If a specified event occurs, the buyer has an absolute right to purchase the land.
Under a pre-emption agreement, however, the prospective buyer has the right to be first in line to buy the land, if the owner decides to sell within the pre-emption period.
An option to purchase agreement therefore gives the buyer rights over the land, and will also bind a future owner of the land too.
Under a pre-emption agreement, however, it is up to the landowner to ‘trigger’ the agreement, and if they decide not to fulfil the conditions of the agreement, the pre-emption rights will not come into effect. Pre-emption rights in regard to registered land take effect at the time of their creation however, and can therefore be binding on subsequent owners.
Under English law, option to purchase agreements must in writing in order to be binding, as they are conditional contracts for the sale of land.
Pre-emption agreements do not need to be in writing, although it is wise to do so. Under a pre-emption agreement, the contact only comes into effect when the trigger event occurs and the holder can then make their offer to purchase. The landowner must then accept this and at this point the contract must be put in writing. There are also different tax implications of both options to purchase agreements and pre-emption agreements, so it is advisable to take professional advice when negotiating.
Home ownership is a complex matter. Often, the legal terms thrown around can be confusing and complicate the decision-making process. When you are ready to join the property ladder, or are climbing to the next rung, you should know the difference between the forms of legal ownership: Freehold and Leasehold.
With a Leasehold property, you only own it for a set period (as set out in the lease). Leasehold enfranchisement is the process you go through to either extend your lease, or purchase a share of the Freehold (collective enfranchisement). On the other hand, if you own the Freehold, you do not have to go through any such process – you own the building and the land outright. In other words, unless you decide to sell, you own the property forever.
When you buy a Leasehold property, you enter a legal agreement with the Landlord known as a lease. These leases tend to be long-term – lasting around 90 to 120 years, but also ranging from 40 to as high as 999 years.
Leaseholds can be bought and sold when they have years remaining. When your lease has between 85 to 90 years left, you should start thinking about a lease extension, as generally, the shorter the lease, the less it is worth. The value of short leases can drop rapidly. When the lease falls below 80 years, it will cost more to extend your lease as ‘marriage value’ is included in the formula used to calculate the premium to be paid for the lease extension.
Under the Leasehold Reform, Housing and Urban Development Act 1993, the government has been proactively giving Leaseholders protection against short leases, by giving them the right to extend their lease or the right to buy the property. If you want to extend your Leasehold, you should follow these steps:
Subject to meeting the qualifying criteria, you can ask the Landlord to extend your lease at any time – but it can be an expensive and complicated process. It is recommended you get professionals – including solicitors and surveyors – involved before you decide to proceed.
If you’re a Leaseholder, extending your lease is an investment worth making. But the law is slightly different depending on whether you have a house or flat. You might be able to extend your lease by:
You have the legal right to do this if you have held the lease on the property for two years, and it was originally a long lease of 21 years or more. You will have to check you qualify for the right to extend. If you’re considering buying a short Leasehold property, you should insist the Landlord extends the lease before you buy it.
To do this, make it a condition of your purchase that the seller assign the benefit of the Section 42 notice to you. This means as the new owner, you’ll have the right to request a lease extension from the Landlord – without having to wait two years to extend in your own right.
Either way, you will have to pay a premium for extending the Leasehold – that is why it is important to find a surveyor to do a valuation and help you decide a ‘realistic’ price to pay to extend your lease. Ideally, this is done before you commence negotiations with the Landlord. How much you pay depends on a number of factors including:
When extending your lease, here are some things you should bear in mind:
From investigating land ownership to dealing with lenders, buying commercial property can present a range of unique challenges for business owners. In the majority of commercial property transactions, the buyer will work with a commercial estate agent to identify a suitable property. It is the role of the commercial property solicitor to manage the associated intricate legal work to ensure that the purchase is completed successfully.
Our commercial property team will act on your behalf to carry out due diligence on the property. This will include undertaking legal searches to establish that there are no issues around ownership of the property that could prevent you from having good and marketable title,
We will review the contract of sale drafted by the seller’s representatives and make any necessary enquiries. Once an agreement has been reached on the contract of sale terms, our lawyers will work to agree on a date for completion and ensure that payment is made. Once the conveyancing process is completed, your commercial property solicitor will register the property in the Land Register and ensure that the required Stamp Duty Land Tax is paid.
For business owners and developers wishing to sell commercial property, our commercial property team can provide essential advice and support to ensure that your transaction is completed as quickly and seamlessly as possible.
Our solicitors have a comprehensive understanding of the commercial property sector and a proven track record in delivering legal services that are uniquely tailored to the needs of our clients’ businesses. Whatever industry you are operating in, you can be sure that you will receive advice that is clear, practical and commercially focused.
Our commercial property solicitors can support you to reach an agreement with the buyer and their representatives on Heads of Terms, which set out the essential points of the transaction including price, the nature of the property being sold, timescales for the transaction and any special conditions. We can take the lead in preparing a contract package, including a draft sale contract, title documents and replies to Commercial Property Standard Enquiries (CPSEs), which will then be forwarded to the buyer.
As part of our client-focused service, we will take the time to develop a thorough understanding of your commercial goals and draft a contract of sale that reflects this. Should you have any questions, our commercial property team will be available to answer these promptly and will keep you up to date on any developments throughout your transaction.
Once the contract of sale has been signed, we will contact your lender to ask for a settlement figure if a loan is secured against the property. We will act on your behalf to ensure that the buyer pays the deposit and that contracts are exchanged promptly. Finally, your commercial property solicitor will oversee the handing over of keys and provide you with a signed transfer deed and accompanying documents.
The above list is not intended to be exhaustive and we do cover many other areas of commercial law- please do ask if you have any specific requirements.
At White Horse Solicitors & Notary Public, we deal with all forms of commercial sites. We represent Landlords of both large multi-let sites in addition to Tenants of offices, warehouses and retail premises. We cover all angles of estate management ranging from granting, assigning to terminating leases. We also enforce lease covenants and advise on defaulting Tenants and lease renewals. Additionally, we also cover the full spectrum of Commercial Property including but not limited to all of the following:
When purchasing commercial premises, your solicitor should investigate the title to the property and commission any appropriate pre-contract searches. Once received, your solicitor should approve the draft contract supplied by the seller’s solicitor and raise any additional enquiries necessary in light of search results and answers to standard commercial property enquiry forms known as ‘CPSE Enquiries’. Any ancillary matters including mortgage finance and Stamp Duty Land Tax will also be addressed at this stage.
When selling commercial premises your solicitor will have a number of responsibilities at the outset of the transaction. After investigation of the legal title to your property, your solicitor will prepare the Contract for Sale and ask you to complete one or more CPSE enquiry forms depending on the type of transaction in hand. Details of fixtures and fittings may also be required.
STAGE 2- CONTRACT
Once the buyer is satisfied with his replies to enquiries and search results then, providing both sides have agreed the draft, the parties will exchange contracts and the Buyer will pay over any agreed deposit. It is at this point that the transaction becomes legally binding on each party.
Your solicitor will raise the necessary pre-completion searches and prepare the Transfer Deed for the Seller’s solicitor’s approval. You will be asked to prepare the balance of the purchase monies ready for completion.
Once your solicitor has approved the Transfer Deed received from the Buyer’s solicitor and given the necessary undertakings to discharge any mortgage to the property, you will be in a position to complete the transaction.
STAGE 4- COMPLETION
The Buyer will forward the balance of the purchase price to the Seller and the solicitors for the buyer and solicitor will complete the transaction.
Your solicitor will pay any Stamp Duty Land Tax that needs to be paid and, if necessary, register the transaction with the Land Registry.
Final completion matters will include the settlement of any charges on the property and the transfer of any remaining funds to you.
There are some pitfalls to avoid when taking a lease of a commercial property. We set out below some things to be aware of:
It is very important that you consult a valuer prior to agreeing your lease so that you can ensure that the rent that you are paying is market rate.
Rent Review frequency
Again, it is very important that you consult a valuer prior to agreeing the rent review frequency, so you can ensure that the Landlord is not trying to take unfair advantage of you. Most, Landlords will try and argue for an upwards only rent review clause which means that the rent can only be reviewed in an upwards only direction. We would advise you to ask for this clause to be on an upwards and downwards basis, so if the rent is being reviewed downwards then you can also benefit from that.
Term of the Lease
If you are entering into a longer term lease, you should consider negotiating with the Landlord in order to secure a Tenant break clause. A break clause allows you to terminate the lease provided that you adhere to certain conditions prior to serving the break notice and also on the break date. You should never serve a break notice without legal advice.
You need to be very careful here, to ensure that you pay attention to the extent of the repairing obligation. Some, Landlords will ask for you to “put and keep the property into good and substantial repair and condition”. You should be aware that a repairing obligation of this nature is stringent and could badly affect you when you come to vacate the property. You could be served with a large schedule of dilapidations.
You should consider agreeing with the Landlord a “fixed” service charge where the service charge will be the same all the time, or a “capped” service charge, which would be a ceiling over which the service charge payments could not exceed.
Assignments and Underletting
You should ensure that your lease allows you to assign and underlet the property with or without the Landlord’s consent. In the event that you wish to move premises, but your lease has still some time left to run, the ability to assign or underlet your property is useful.
You should ensure that there is a clause in the lease which states the rent will be suspended in the event that the property suffers damage by an insured risk.
Damage by an Insured Risk
You should ensure that your repairing obligation omits you from the liability to repair in the event that the property is damage by an insured risk.
Schedule of Condition.
You should try and limit your repairing obligation by way of reference to a schedule of condition. A schedule of condition, is basically a photographic schedule with wording confirming the extent of the disrepair of the property at the time you take a lease of it. The lease will normally state that you are not liable to put the property into any better a state of repair and condition than is evidenced by the annexed schedule.
If you are taking a lease of part of a property, it is essential that you make sure that you have appropriate rights granted to access the property though the common parts of the building; rights of car parking; rights to store bins; rights of support and also rights to enter other parts of the building in order to carry out works to your property.
You need to take advice from an accountant on this point to see which method is tax efficient. You should be aware that if you take a lease on in your personal name it will mean you are personally liable for the rents and as such the Landlord could sue you personally and petition for your bankruptcy in the event that you fail to pay the rent. With a limited company, you can hide behind what is called the “corporate veil” so you have the benefit of what is knows as limited liability as a company is viewed as a separate legal entity to you. Most Landlords will insist on you entering into either a rent deposit or personal guarantee in the event that you enter into a lease through a company.
The general rule is that for “new” commercial premises in essence commercial premises, built within the last 3 years, then yes you do need to pay Value Added Tax on the purchase price.
For commercial premises in excess of 3 years old, the seller, normally has to make an option to tax the property, they will normally do this if they need to re-coup the Value Added Tax on their purchases.
If you are buying a property which is subject to leases and in general terms (although there are a lot more rules to satisfy) the seller has made an option to tax the property, and you have made an option to tax, then the purchase may qualify as a “Transfer of a going concern” which in essence means you will not pay VAT.
The liability to pay, VAT on commercial premises is an extremely complex area, and in that regard, we would strongly advise you to speak to your Accountant.
Stamp Duty Land Tax is payable on commercial leases in certain circumstances. Whether or not Stamp Duty Land Tax is payable on a commercial lease depends on what is known as the “Net Present Value”. There is an extremely complex method of calculation to ascertain what the “Net Present Value” of a lease is. HMRC have created a very easy to use calculator in order to determine this.