Commercial Property & The Most Frequently Asked Questions
Commercial Property can be a complicated process with a myriad issues, especially when compared to Residential Property. As such, it is perfectly understandable that you might have some questions regarding aspects of Commercial Property and your own situation.
If that is the case, then you’re in luck. Here you will find the answers you’re looking for.
Below is a list of selected questions regarding Commercial Property, with the corresponding answer below each.
If you do not find what you’re looking for here, feel free to get in touch using the contact form or one of the other methods of contact listed.
Frequently Asked Questions About Commercial Property
At the time of your sale you can enter into an agreement known as an Overage agreement. This will set out the terms upon which any increase in value is to be determined and distributed. It is important that consideration is given to the terms to ensure that it is effective. E.g. whether the Overage payment is triggered on planning permission being granted or implemented and the duration of the Overage.
If you have not entered into any Overage agreement then you will not be entitled to any further payments. It is very unlikely that any buyer will enter into such agreement after completion of the sale. Therefore, it is important that you seek advice before completion.
Yes. The parties can enter into an agreement whereby any sale is subject to planning permission being obtained.
There is typically two types of contract that can be entered into:
An Option
Once satisfactory planning permission is obtained, the buyer will have the option to purchase the land. Exercising that option is not compulsory.
Conditional Contract
Once satisfactory planning permission is obtained, the buyer is compelled to purchase the land.
It is important that consideration is given to the terms of the contract to ensure that the terms are clear e.g. what amounts to satisfactory planning permission.
The Landlord and Tenant Act 1954 can provide a business tenant with protection. To qualify for a new lease a tenant will need to have fulfilled certain requirements. However, the parties can agree at the outset that such provisions will not apply. Where the protection does apply it is still possible for the landlord to object to granting you a new lease if certain grounds can be established (such as the tenant being persistently late in paying the rent).
It is important that before entering into a lease, renewing or vacating, that you obtain legal advice if you are unsure as to what your rights are.
The terms of the lease set out what standard a tenant will need to repair to. It is possible that a tenant could be required to put a property into a better condition than when the lease was entered into. It is important that a tenant obtains advice prior to entering into a lease if they are unsure as to the extent of their obligations. Depending on the bargaining strength of the parties and condition of the premises a tenant may wish to limit any repair to being to no worse condition than when the lease was entered into.
It is commonplace for a lease to either prohibit assignments or make them conditional upon the landlord’s consent being obtained. If consent is required such consent cannot be unreasonably withheld, but the landlord may attach conditions to the assignment such as requiring the outgoing tenant to enter into a guarantee agreement. It is important that a tenant obtains advice prior to entering into a lease and at the time of assignment, if they are unsure as to whether consent is required and whether any conditions attached to that consent are enforceable.
This area of law can be complex. It is common for modern commercial leases to reserve rights which would, on the face of it, permit you to re-enter and forfeit the lease. However, you should proceed with caution when exercising such rights and we strongly recommend that you seek legal advice before re-entering the premises and/or contacting the tenant, as doing so may waive your rights notwithstanding the terms of the lease. Re-entering could result in the tenant bringing a claim for damages for losses arising from the tenant’s exclusion from the premises.