Is your property ready for sale?
19th June, 2012
A second edition of “Readiness for Sale” – A Guide for Streamlining Commercial Property Transactions (the “guide”) has been published The Investment Property Forum (“IBF”).
In 1995, the IBF set up a working party to consider ways to streamline commercial property transactions. This led to the first edition of the guide in 1996.
As the IBF website points out, property in the UK continues to represent approximately 7%-8% of the total investment market (by value).
Liquidity remains an issue for property as an asset class. Keeping a property ‘ready for sale’ will help to reduce the cost and time involved in any transaction. In the current tough market, delays could lead to the prices being chipped, deals falling through or funding being withdrawn.
The guide recommends that sellers and their advisors should familiarise themselves with the property and its title before it goes on the market.
Examples of issues to consider include:-
- Gathering the necessary management information including obtaining an EPC if necessary
- Title defects or adverse rights
- Physical defects in the property
- Missing title deeds
- The effect of any financing arrangements on a sale
- Getting together replies to CPSE enquiries and supporting document
- Reviewing surveys / reports to be disclosed to the buyer
- Warranties etc for recently constructed properties
- Planning history
- Tax including VAT, capital allowances, SDLT and CGT
- What needs to be addressed in the heads of terms.
The appendices to the guide contain a flowchart for both an asset and a corporate acquisition, and a checklist.
If this article has raised any queries, please feel free to contact Emma McGlinchey, Partner on 01244 405567 or at [email protected]