The Difference Between Freehold and Leasehold Commercial Property
When you buy a property that is freehold, you own both the property and the land outright. Leasehold commercial properties or premises (part of the building) are however, exactly that – leased. You therefore own the leasehold building or premises for a fixed period of time, and you will be subject to leasehold terms entered into between yourself and the freehold owner.
Procedure for acquiring a commercial property.
-the heads of terms will need to be agreed between the freeholder namely:
-the purchase price for the freehold or the premium for the leasehold property
-in the case of a lease its duration:
-the rent and the rent review period
-the user clauses (the permitted use of the property)
-the portion/ratio of the service charge/insurance payable if the leased premises is a part of the building and not the whole
-whether any rent deposit or guarantors are required
the list is not exhaustive.
- Carrying out local authority, environmental, water and drainage searches
- Raising enquiries with the seller’s solicitors
- Reviewing search results and the replies to enquiries
- Identifying and talking through potential liabilities with you
- Reviewing the valuation and survey thoroughly
- Providing you a report on Title and
- In the case of a leasehold property providing you a summary of the lease.
- Obtaining the signed contract and transfer document from you (and where applicable the lease and the mortgage deed)
- Obtaining the usual 10% purchase deposit from you
- Exchanging contracts with the seller thus legally binding both the parties to the transaction
- Completing the transaction by paying the remainder of the balance (usually a week or thereafter)
-paying off any stamp duty land tax that may be due
-and registering the lease.
A typical transaction will entail the steps above.
We here at TV Edwards Solicitors endeavour to make the process for you streamlined, free from the stress, inconvenience, and any nasty surprises when you collect the keys.
Please feel free to contact us if you have any questions or want to find out more about purchasing a commercial property. Please call us today on 0203 440 8000.