Buying a business requires the services of a Property lawyer. This avoids errors, allows you to have proper advice, and safeguards your business interests plus ensures that a lender is safeguarded when a business mortgage is involved.
How can a property lawyer help you when buying a business?
An important role of a property lawyer is to advise on property laws as well as the due diligence relating to buying of property that accompanies a business eg. A care home comes with a freehold property and land surrounding it.
Matters the property lawyer will be involved in with such an acquisition include:
1)Reviewing title information to the property at the Land Registry and reporting to you on findings such as the defective title.
2) Ordering property due diligence searches, such as environmental searches, land registry searches, water authority searches, chancel repaid searches, local authority searches, and location-specific searches then reviewing the results and reporting to you on findings such as planning permission or restrictions (eg. If a listed property), issues with flooding, contaminated land or water nearby, or an old landfill site which can be toxic and an issue to sell. Water searches will tell you if any public drains run through the property and where your water comes from which is important if your want to do an extension, location searches include risk of subsidence, mining area search, or restrictions on property enhancement. Finally, a chancel repair search is necessary to establish if you will be liable for the cost of repairs of a parish church, which can happen even if liability is not registered.
3) Reviewing the seller’s replies to Commercial Property Standard Enquiries (CPSEs) and reporting to you on findings.
4) Reviewing and negotiating a draft property contract (to be drafted by the seller’s solicitors).
5) Reviewing and negotiating a draft TR1 transfer deed.
6) Negotiating and agreeing on any Option Agreement in respect of that part of the Property to be subject to an option arrangement to buy it in the future.
7) Deducing title to your lender’s solicitors, supervising the execution of the legal mortgage they will require on the property, and liaising with them and you on it.
8) Dealing with post-completion matters such as filing an SDLT return with HMRC, registering the property transfer deed, option agreement, and legal charge at the Land Registry.
Such searches are important and take two to three weeks plus the disbursement and solicitor cost but are well worth it as the property is high value and thus high risk.
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