Disposing of commercial premises: the seller’s perspective

Advice  |   20 December 2016

Whether you are an owner-occupier or a freehold landlord of commercial premises, careful planning is required if you intend to dispose of the premises to ensure the sale proceeds smoothly.

Whether you are an owner-occupier or a freehold landlord of commercial premises, careful planning is required if you intend to dispose of the premises to ensure the sale proceeds smoothly. Assuming that you have obtained a valuation and tax advice and are ready to market the property, what are the key legal considerations? Yildiz Betez, commercial property law specialist at Thackray Williams.


To sell your property the first thing you will need to do is prove that you own it. This can be done in one of three ways.

If your property is registered at the Land Registry, ownership can be proved by your solicitor obtaining a copy of the register from the Land Registry. To do this they will need the full address of the property and, if you have it, confirmation of the title number under which the property was registered.

If your property has not been registered with the Land Registry, you will need to locate your original title deeds to prove ownership. These will need to be handed over to the buyer’s solicitor on completion so they can be submitted to the Land Registry as it is now compulsory for all properties to be registered following sale.

If your property is unregistered, but you have lost your title deeds, investigations will need to be carried out to confirm your ownership of the property and an application made to the Land Registry to register what is known as a possessory title. If you are planning to sell your property and cannot locate your title deeds, we recommend that you seek legal advice as soon as possible to avoid the sale being unnecessarily delayed.

Energy Performance Certificates

Commercial properties require an energy performance certificate prior to sale or lease, which must be made available to the buyer or tenant before you complete. You will need to instruct a qualified energy assessor who will need to inspect the premises to evaluate the building’s energy efficiency.


Once negotiations for the sale have been concluded we will draft the contract and send it to the buyer’s solicitor. This will state the agreed price, the details of the parties and the terms on which the sale will take place. If the sale is conditional, for example on planning permission being granted or consent to change of use being obtained, these provisions will need to be dealt with in the contract.

The contract will also confirm the completion date. Completion may be dependent on the buyer obtaining finance, so you should find out about their position at the outset in order to agree a realistic time-frame.


The buyer will usually ask for commercial property standard enquiries. These are industry standard enquiries and are very comprehensive. They will ask you to provide information in relation to matters such as the planning history of the property, the condition of the property, the VAT position, the position on capital allowances and details of any existing tenants.

To avoid any delays in progressing the sale you should try and gather as much information as you can at an early stage so that the replies and any ancillary information can be provided to the buyer’s solicitor at the outset.

To some extent, the buyer must rely on their own inspection of the property and they will usually be recommended to carry out their own survey and searches as to the condition of the property.


Under the Control of Asbestos Regulations 2012 you are legally obliged to have carried out an asbestos survey to identify any asbestos used in the construction of the property and, where there is any, to provide a plan showing how this should be managed.

Unless the date of construction indicates that there is no asbestos present in the property you will have to provide the buyer with the asbestos survey.

If this has not yet been carried out, your buyer may accept that they will have to carry out the survey after completion or it may become a condition of the contract that you provide a survey prior to completion. You would then need to negotiate who is liable for the costs, if any, in dealing with any recommendations for removal or management of any asbestos found.


You will need to confirm if you have elected to waive the VAT exemption that applies to commercial property. This will be important to the buyer as they will want to know if VAT is payable on the purchase price and they will want to see a copy of your notice.

Existing tenants

You may be selling your freehold reversion subject to existing leases. If so the contract should provide for this and you will need to consider assigning the benefit of any rent deposit deeds or other ancillary documents. You should also consider what, if any, continuing obligations you may have as the landlord under those leases and to seek a release on any such obligations in the contract, where possible.

You will need to make sure that all rents are paid as at the date of completion and if there are any arrears or existing breaches of covenant by the tenants that these are disclosed to the buyer.


Preparation is the key to a smooth transaction. Having all the information available to the buyer at the outset will reduce the likelihood of delays or complications at a later stage in the transaction.

If you are planning to put a commercial property on the market and require advice or assistance, please contact Yildiz Betez.