A can give a business flexibility as well as freedom to adapt the premises to their individual needs. That being said however, when considering such transactions, it is important to consider a number of factors. It is crucial to think about financial and legal aspects of the transactions as well as commercial mortgages and in particular whether the business will be in a position to meet the monthly costs of repayment over a shorter period of time.
When considering a commercial purchase, it can be useful to consider what the potential advantages and disadvantages of such purchase may be.
-Buying a property could potentially take up a lot of time and effort, especially if you would need to make considerable alternations to the premises to make it suitable to your business needs. This in fact is something that you may not feel so comfortable with, especially if you would be on a tight schedule to relocate promptly.
-If you secured a mortgage for the purchase of the premises, this would of course commit you and your business to on-going costs such as business rates.
-Commercial purchases will most likely use a lot of capital and therefore you might not be able to invest in your business as much if you decide to commit to such purchase. It is important to remember that for some businesses, it might be difficult to recoup capital quickly.
-There is potential of negative equity or even repossession if you will not be in a position to keep up with the repayments of the mortgage.
-A commercial purchase will make you responsible for the health and safety regulations of the building. This will therefore add additional responsibility as you will be required to ensure you are aware of the health and safety requirements as well as fire precautions and to keep up to date with them.
A commercial purchase will involve a number of costs such as on-going costs, solicitor fees as well as fees for the surveyor, alterations and repairs as well as others.
On-going costs can be quite substantial and therefore it is important to consider the following:
Prior to making a decision whether you wish to purchase the premises, you may wish to hire a surveyor. A surveyor will assess the value as well as the structure of the premises by conducting a survey. This will in turn provide you with key information about the premises and might potentially allow you to determine whether you wish to make a particular purchase.
It is also good practice to get a survey in order to ensure that you will have all the necessary information about the property and consequently avoid any surprises at a later stage.
If you are using a mortgage lender, they might wish for a survey to be carried out so that they can be assured that the premises are appropriate and that there is nothing that might affect the mortgage repayments in the future.
Your surveyor could potentially assist you with deciding whether the premises are suitable, advise you whether you might want to improve or alter the building and in some circumstances even negotiate the right insurance cover.
Surveyor fees can vary and they can depend on the price of the premises as well as other factors. It is best to look for a surveyor who can provide a fixed cost for the survey. There are a number of surveyors in Scotland who will be able to provide you with a more detailed breakdown of costs involved. Your solicitor will also be in a position to recommend surveyors they have previously used.
Commercial purchases can be quite complex and therefore choosing the right solicitor to act on your behalf is essential. It is best to choose someone who specialises in commercial property law and has the necessary experience.
Your solicitor will help you understand what the purchase will entail. They will check to ensure that the seller has a good title that can be passed on to you if you decide to make the purchase. Additionally, will carry out all the necessary checks for you to ensure that everything about the ownership of the property is in order and emphasize to you if there are any problems with the premises.
Your solicitor will also work towards ensuring that they will negotiate the best deal for you in terms of the contract, communicating with you throughout the entire process.
Given the fact that timing might be of essence for you, your solicitor will try to conclude the purchase promptly and working in order to ensure any potential delays will be avoided.
When considering which solicitor to instruct to act on your behalf, you should speak to them about their experience and the fees involved in the transaction. Your solicitor should be in a position to provide you with breakdown of costs involved in the transactions such as Stamp Duty Land Tax, registration fees as well as what their fees will be. It is important to try to obtain a fixed fee for where possible rather than a work in progress fee. This will afford you certainty of the exact costs involved, thus giving you a peace of mind.
When considering making an offer, it is important to ensure that you are satisfied with the price for the property and what is included in it. It is best to speak to your solicitor in order to ensure that you have a good understanding of what will be included in the purchase.
Your solicitor will put in an offer to the agent noting your offer on the property and will most likely specify that the offer is subject to a number of conditions such as the ability to raise finances for the purchase, planning permission for any alternations already made to the premises as well as a satisfactory building survey.
The vendor might accept your offer or decline it or perhaps negotiate with you in respect of the purchase price or other points.
Once an agreement has been reached indicating that both seller and purchaser are happy with the terms contained in the contract, all necessary checks have been carried out and the funds are in place, your solicitor will be in a position to conclude the contract on your behalf.
Once a contract has been concluded, it will become legally binding and both parties will need to abide by it. On completion date, you solicitor will transfer the funds for the purchase to the seller’s solicitor and they in turn will provide all the necessary documents for registrations with the Register of Scotland. Your solicitor will send the documents to change the ownership of the property to your name.
If you are thinking about a commercial purchase, it is crucial to obtain legal advice at an early stage. Our experienced team of commercial conveyancing solicitors will provide you with clear and concise advice and guide you through the legal process in a professional manner.
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