Q: How do I redeem my mortgage on the commercial property I am selling?
A: Upon completion of the sale it will always be necessary to repay any mortgage you have taken out upon the property. Prior to completion, your solicitor will obtain a redemption statement from the Bank which will outline how much you currently owe under the mortgage and will include details of any fees that may be incurred as a result of paying off the mortgage early. Your solicitor will then deal with all documents and procedures to ensure that the redemption monies are paid in time for completion of the sale.
Q: What is the difference between purchasing the freehold and the leasehold for a commercial property?
A: The terms freehold and leasehold refer to the extent of a person’s ownership of a property. To purchase the freehold of a commercial property means that you will own the whole of the property outright, including the land that it stands upon. To own leasehold property simply means that you will have a lease from the person who owns the freehold property and the ownership of the property will therefore revert back to the freehold owner at the end of the lease.
Q: What are Heads of Terms?
A: The first document that is created in the sale of a commercial property is the Heads of Terms. This document will clearly state the basic terms of the sale which both the seller and purchaser agree to.
Standard Heads of Terms cover three main points:
- The time limits on completion of the property
- The conditions of the proposed purchase
- The sale price of the property
Heads of Terms are not usually a legally binding document or deemed compulsory but are useful as an initial understanding and agreement to the main points of the sale agreement.
Q: What happens next after I accept an offer for my commercial property?
A: Once you have accepted an offer from a purchaser, your solicitor will prepare a draft sale agreement for the approval of both yourself and the purchaser. At this point, the purchaser’s solicitor will be carrying out any appropriate searches on the property and will usually send standard commercial property enquiries for you to answer.
The process of searches and enquiries will provide the purchaser with in depth information about the property they are purchasing. Once this contract has been approved by both yourself and the purchaser, the transaction can then move to the formal exchange of contracts. After contracts have been exchanged, the transaction can move to completion.
Advice about selling a commercial property
If you are considering selling a commercial property and need an expert commercial property solicitor to answer any questions that you may have, call us at our offices in Leicester, Hinckley and Market Harborough.
Alternatively, you can contact me directly with any questions, at email@example.com