No matter the type of property you wish to buy, conveyancing is always required. And even if you are leasing or renting a commercial property, it is important for you to check everything is as it should be before signing any contracts. But how does commercial conveyancing differ from domestic?
Commercial conveyancing v domestic
While conveyancing follows similar practices for commercial and residential properties, there are some things that set the two apart.
In most cases, commercial property is exempt from VAT, which is currently at 20 per cent. However, this may not be the case if the property is less than 3 years old or the seller has elected to waive that exemption. This is known as an Option to Tax. We highly recommend you seek legal advice to make sure the VAT you are expected to pay is correct.
Residential property isn’t usually subject to VAT unless you are the buyer.
Residential conveyancing usually happens after a deal has been agreed between the buyer and seller. The conveyancer will take over the process to make sure everything, from paperwork to financial transactions are completed as they should be.
However, a conveyancer will be required much sooner for commercial properties. This is because commercial conveyancing involves a wider range of processes, including the following:
- The sale of premises
- Re-contract or revisions of new leasing or long-term rental agreements
- Revisions for pre-existing leases or change of use agreements
- Drawing up and arranging permit plans
- Paper for rent reviews
- Association Agreements
- Arranging and Licensing applications
You will find that commercial conveyancing will likely face more leasing agreements than residential conveyancing would. As such, many owners are in fact commercial tenants instead of property owners. This can sometimes mean that public sector landlords will add complexity to the process.
When buying a derelict property with the aim to demolish and convert into an industrial space also required commercial conveyancing. This is one process that is extremely complex, particularly if there are any unique elements to consider before completing the purchase.
As the conveyancer will need all relevant pieces of information from the client, from planning permissions to the lease terms. The main lease terms will be agreed and summarised in what is known as a Head of Terms and include each important piece of information, from names and addresses to terms and conditions of the lease.
So, be sure to gather everything they require as soon as they request it. This will help the conveyancing process move along quickly.
Find the perfect conveyancing expert with Betesh Middleton Law
We hope this helps you understand how commercial conveyancing differs from residential. If you have any more questions, or you are preparing for your commercial conveyancing process, get in touch with Betesh Middleton Law.