When faced with the decision to buy or rent a premises for your business, there’s a lot to consider. On the one hand, buying allows for greater control over the space. On the other hand, it locks you into something you may not need in a few years’ time. Renting gives you flexibility and doesn’t require a lump investment but gives you less control over how you use the space and when you occupy it.
The Bolt Burdon Commercial Real Estate and Development Team works with buyers, sellers, landlords and tenants on a weekly basis. If you’d like to chat to one of our specialists about what’s involved in buying and renting, and what the right decision is for you, get in touch.
If buying and selling commercial or mixed-use property is your bread and butter, then you don’t need us to tell you how much rides on the structure and timing of a deal. You also don’t need us to tell you that sometimes you have to take a risk if you want to succeed. However, it is wise to seek legal advice on the implications those risks might have should you choose to take them.
That’s where we come in.
We have extensive experience in deal structures—from simple agreements through to complex transactions—including sale and leaseback arrangements and lease extensions to multi-party ventures and sub-sales. We’re perfectly placed to walk beside you as you embark on your next big success.
Before you go ahead with any commercial property purchase, a solicitor needs to undertake a number of investigations and searches. One particularly important investigation is the Investigation of Title, which checks that the land being acquired is legally suitable for the intended purpose.
Below we detail the most common title investigations/searches that need to be undertaken, and what they mean for you as a buyer.
A solicitor will check title documents to ensure that the seller/landlord/tenant actually owns the premises, and to find out what rights, restrictions, and covenants benefit and burden the land.
This search reveals whether there are planning issues or restrictions affecting a property, or whether there are any statutory charges against the property. It’s an important search because local land charges are binding to successive owners. Please note: this search only looks at entries affecting the property, not the surrounding land nor the rest of the building (if it is part of a larger building).
In addition to a local search, we can (upon request) ask the local authority to provide information on:
The main reason for this search is to check whether the water and sewerage systems under and around a property have been properly serviced, and if there are any liabilities likely to be incurred by new owners. It also reveals:
This search reveals any planning applications within a certain radius around a property and is particularly useful for buyers who want to know what might go on around their property in the future.
Search In the UK, if a property is near a church (or is on land formerly owned by some of the older universities) there may be an obligation to contribute to the local parish church towards repairs. This liability is enforceable in the County Court. A chancel repair search reveals whether a property is within the bounds of a parish that may require repairs. Please note: this search is specific only to the property that you are proposing to lease and will only reveal whether the property falls within a liable parish. It can be conducted in person at the National Archives.
An environmental search is undertaken to identify any known environmental risks that may incur liabilities or reduce the value of a property. The most important of these is land contamination because landowners (including leaseholders) are liable for the costs of the clean-up of contaminated land and any adjoining owners’ land that is affected. The search will also identify potential for flooding and subsidence (which will affect insurance ratings) and interrogate registers to identify other potential risks including nearby industrial processes, landfill sites, and poor air quality.
If a tenant/buyer intends to use a premises for anything other than what it was used for previously, or if the premises is brand new, then they’re likely to need planning permission. This must be in place before completion of the sale, otherwise the Landlord could forfeit the lease/the planning authority could demand that the premises returns to being used for its previous purpose only. In other words, rendered useless to the new tenant/buyer.
While every transaction is different, below outlines a typical Bolt Burdon approach to two common transactions:
Purchase of an existing lease / grant of a new lease
- Investigate the seller/landlord’s title, including any covenants, restrictions, or other matters that may affect the property.
- Ascertain whether or not third-party consent is required for the purchase/lease and ensure it is obtained if so.
- Carry out all searches requested by the buyer/tenant.
- Communicate with the seller/landlord’s solicitors to ensure we have a thorough understanding of practical matters like service charge costs.
- Negotiate (in a timely manner) with the seller/landlord’s solicitors until documentation is agreed.
- Prepare a written report that details the terms of the lease/title and any other relevant information
- Complete the transaction. This includes the management of post completion formalities like Stamp Duty Land Tax and registration at HM Land Registry.
Sale of a lease
- Provide evidence of the title to the buyer/tenant’s solicitors.
- Ascertain whether third party consent is required for the purchase/lease and ensure it is obtained if so.
- Deal with any enquiries raised by the buyer/tenant’s solicitors.
- Negotiate (in a timely manner) with the buyer/tenant’s solicitors until documentation is agreed.
- Prepare a written report that details the terms of the purchase/lease and any other relevant information
- Complete the transaction. This includes the management of post completion formalities like the discharge of mortgages and registration at HM Land Registry and Companies House.
For more information on our approach, or different transactions get in touch.
There are essentially two ways to acquire a leasehold premises:
- To purchase an existing lease
- To enter into a new lease
Depending on which of these two options you wish to undertake, there are several documents which will need negotiating and completing (in addition to the terms of the lease itself).
Below details common documents and what they’re for, to help you navigate what can at times seem like a labyrinth of legal jargon:
This document occurs in cases where an existing lease is being purchased. It’s essentially a contract that ensures that, so long as the current tenant’s conditions are met, the lease will be assigned to the buyer. Peace of mind that’s important in deals of this kind.
This document is used to transfer a Lease from a current Tenant (the Assignor) to a new Tenant (the Assignee). It is only suitable for a Lease that is not registered at the Land Registry. If the Lease is registered at the Land Registry, see Deed of Transfer below.
This document is used to transfer a Lease from a current Tenant (the Assignor) to a new Tenant (the Assignee). It is only suitable for a Lease that is registered at the Land Registry. If the Lease is not registered at the Land Registry, see Deed of Assignment above.
The majority of leases contain a provision preventing their assignment without the immediate landlord’s consent. As such, the assignment is void unless a Licence to Assign (which documents the Landlord’s consent) is provided. If the lease being bought is granted out of another lease (i.e. is not granted directly out of the freehold title),it is very likely that the buyer will need the consent of the Superior Landlord who should also be party to the Licence to Assign.
If a buyer wants to carry out work on a premises, a Licence for Alterations document must first be obtained. This document exists to protect a landlord and includes approved plans and specifications of the proposed work.
If the terms of an existing lease aren’t appropriate for a buyer’s proposed use of the premises, they may need to enter into a Deed of Variation. This allows a buyer to legally change the terms in the old lease that don’t fit their needs.
If you’re a property developer, or you work for a property developer, you’ll likely have three main requirements when it comes to working with solicitors:
- That they can manage plot sales expeditiously and with little supervision.
- That they are commercially minded.
- And that they are meticulous about meeting deadlines.
This understanding of your needs forms the basis of our approach here at Bolt Burdon…
- Our specialists in new build plot sales and site acquisitions deliver bespoke services, which ensures the smooth running of every sale.
- We’re upfront and honest about our costs and can work on a fixed fee basis. Aer all, we know a relationship based on trust and mutual respect is one that will last.
- In addition, our extensive knowledge of the end-to-end process (from new build conveyancing, to ‘Help to Buy’, to development re-finance) means you can sit back, relax, and let us do the heavy lifting.
Poised to be ‘a solution to London’s Housing Crisis’, rooftop and airspace development has become a popular investment area in recent years.
In response to high demand, we’ve built a team of experts dedicated to supporting developers, landlords, and investment funds looking to get involved in this innovative space. Their technical expertise, industry knowledge, and commercial insights will guide you/your team through the legal process, delivering the project as headache-free as possible.
Areas we regularly advise on include:
- Land and site acquisitions
- Grant of Airspace Leases
- Sale/Purchase of Airspace Leases
- Joint Venture and Option Agreements
- Preparation of occupational leases for re-sales
- Advising landlords and developers on whether or not existing sites have the right for development, including advice on:
- Any land issues, such as restrictive covenants
- Considering any planning issues
- Existing obligations or restrictions which may prevent development as a result of any existing lease provisions
- Ownership and rights over the roof space and/or airspace
- Maintenance obligations
- Rights to lights
- Existing rights, easements and derogation from grant
- Tenants’ right of first refusal under the Landlord and Tenant Act 1987 and where appropriate dealing with preparation and service of the appropriate Section 5 Notices
- Advising on and/or considering any preventative measures that can be taken by leaseholders to prevent landlord’s development
- Party Wall issues
- Social Housing and Affordable Housing
- Mixed use developments
- Electronic communications code
- Variation of leases and service charge issues
- Disputes relating to airspace and development issues
