Commercial acquisitions and disposals
Commercial property sale
Legal work to sell commercial or investment property: preparing the sale pack, replying to the buyer's standard enquiries (CPSE), settling VAT and completing the transfer.
Every cost on its own line: the law firm's legal fee, VAT, the searches and other third-party costs, and any property tax. Your quote opens as soon as you send the form.
Start gathering documents as soon as you decide to sell. A complete pack, sent out with the draft contract, is the most effective way to hold a buyer to the agreed price and timetable.
Selling a commercial property goes more smoothly when the buyer's solicitor has what they need from day one. A well-prepared sale pack, with title documents, leases, planning papers and replies to the standard enquiries, answers most questions before they are asked and keeps the buyer committed while the deal is fresh.
Owner-occupiers selling business premises, landlords selling let investments, and companies, partnerships and trustees disposing of property all use this service. Your solicitor prepares the contract, deals with VAT, keeps the promises you give the buyer to what you can stand behind, repays any lender and completes the sale.
The online quote for a sale is instant. Tell us what the building is used for, whether VAT will be added to the price because you have opted to tax (chosen to charge VAT on it) or the sale is a transfer of a going concern (a let property sold as a running business, without VAT), how many tenancies there are and who is selling. You will then see the legal fee, VAT and third-party costs listed separately.
What is involved
On a sale, your solicitor sets the pace. The work usually follows these steps:
- Instruction and checks: identity checks on you or the selling company, confirming who can sign and reviewing the agreed heads of terms (the outline of the deal).
- Building the pack: official copies of the title and plans from HM Land Registry, leases and licences, planning and building regulations papers, the energy performance certificate (EPC), the asbestos register, the fire risk assessment and service charge records where relevant.
- Replying to CPSE: completing the Commercial Property Standard Enquiries with you. Replies need care, because an inaccurate answer can lead to a misrepresentation claim (a claim that you misled the buyer) after completion.
- VAT: confirming whether you have opted to tax, finding the evidence and, for a let building, agreeing whether the sale is a transfer of a going concern, which allows it to go ahead without VAT.
- Negotiating the contract: the deposit, completion date, limits on your liability, how arrears and service charges are dealt with and the capital allowances position.
- Exchange and completion: once contracts are exchanged and the deal is binding, preparing the transfer, obtaining redemption figures (the amount needed to clear your loan), receiving the money and paying off your lender.
- After completion: notifying tenants of their new landlord, settling apportionments of rent and service charge and clearing your lender's charge from the title and, for a company, at Companies House.
What the legal fee covers
- Obtaining official copies of the title and checking them for gaps
- Drafting the sale contract and the transfer for the buyer to approve
- Helping you complete the replies to the Commercial Property Standard Enquiries (CPSE) and answering follow-up enquiries
- Assembling leases, licences and rent information for a let property
- Agreeing the VAT treatment, including any transfer of a going concern wording
- Negotiating limits on the assurances you give the buyer
- Repaying your lender from the sale money on completion
- A completion statement with rent and service charge apportionments
- Post-completion steps, including notices to tenants and clearing your charge
Costs you may see on top
- Your lender's fee for releasing its charge, and any early repayment charge
- The estate agent's fee, usually paid from the sale money
- Official copies of documents and plans supplied to the buyer
- A new EPC or updated asbestos or fire safety reports, if the buyer asks for them
- VAT on the price, which you collect from the buyer and pay to HMRC if you have opted to tax
- Tax on any gain, for which you may need an accountant
- Indemnity insurance to cover a title defect, if the buyer requests it
What to have ready
- Title deeds, if you hold any, and your lender's details
- Every lease, licence, side letter and rent deposit deed for a let property
- Planning permissions, building regulations certificates and warranties for past works
- Evidence of any option to tax and your VAT registration number
- The EPC, asbestos register, fire risk assessment and any health and safety file
- Service charge accounts and a schedule of rents, arrears and deposits
- A board resolution approving the sale, if a company is selling
- Details of any disputes, notices or works affecting the property
How long it takes
Selling vacant premises commonly takes 8 to 12 weeks from instruction to completion where the title is clean and the buyer's funding is in place. A let investment, a sale with VAT or capital allowances points to settle, or a buyer who needs finance or planning often takes longer.
Preparing the pack before the property is marketed saves the most time. Missing consents, unsigned licences and gaps in service charge records are the usual reasons sales slow down, while quick, accurate replies to enquiries keep the buyer's solicitor moving.
Things to watch for
- Answer the CPSE questions from what you actually know and keep the evidence. A careless reply can give the buyer a claim against you after completion, so if you are unsure, say so rather than guessing.
- If you have opted to tax, find your evidence that HMRC was notified before you go to market. Buyers often refuse to exchange until the VAT position is proved.
- Selling a let building does not automatically free you from your landlord obligations. For most leases granted since 1996, you can ask the tenants to release you by notice served before the sale or within four weeks after it, and they then have four weeks to object.
- If the building includes flats let on long leases, the leaseholders may have a right of first refusal that must be offered to them before you sell. Ignoring it can be a criminal offence.
- Agree in the contract how arrears and service charge balances are handled, so money collected after completion reaches the right party.
- Ask your lender for redemption figures in good time. If a company is selling, make sure the charge is also shown as satisfied at Companies House after completion.
Questions people ask
Do I have to charge VAT when I sell?
Only if VAT applies to the sale. Most sales of older commercial property are exempt unless you have opted to tax, but selling the freehold of a new commercial building, less than three years old, is standard-rated. If you have opted to tax and the property is let, the sale may qualify as a transfer of a going concern, in which case no VAT is charged. Your solicitor and accountant confirm the position before the contract is drafted.
What promises will the buyer ask me for?
In most commercial sales, the buyer relies on your replies to enquiries and its own investigations rather than wide warranties (contractual promises about the property). Your solicitor usually limits your replies to matters within your actual knowledge and excludes liability for anything else, except fraud. On a let investment, the buyer may ask for specific confirmations about rent, arrears and disputes with tenants. Agree these carefully, because the buyer can rely on them after completion.
Can I sell with tenants in place?
Yes. Many commercial properties are sold as let investments, and the tenancies are a large part of the value. The buyer's solicitor will want every lease, licence and side letter, a schedule of rents and arrears, and details of rent reviews, break options and any disputes. Gaps in this paperwork are a common reason for buyers to delay or reduce their offer.
When do I receive the sale money?
On completion, the buyer's solicitor sends the money to your solicitor, who repays your lender, pays costs you have authorised, such as the agent's fee, and then sends you the balance, often on the same day. The completion statement adjusts for rent and service charge already collected.
Who does the work
Your matter is handled by a law firm regulated by the Solicitors Regulation Authority, the Council for Licensed Conveyancers or CILEx Regulation, or in Northern Ireland by a solicitor regulated by the Law Society of Northern Ireland. At the moment the law firms on our panel act for property in England and Wales, so for property in Northern Ireland we tell you whether a firm can act for you before we pass your details to anyone. The firm confirms who will work on your file, their experience and its terms before you instruct it. How we choose our firms.