Once a seller has agreed a sale for a property they are keen to see progress as quickly as possible. Lack of preparation can significantly affect the early progress in a transaction. Follow these ten tips to prepare for a quick sale:
- Collate your title deeds: most properties are registered with the Land Registry and so quite often documents can be downloaded from the Land Registry portal. In some cases documents are either not available or have not been registered with them. Collect together your title deeds and whatever documents you have relating your property. If you have granted a lease or leases over your property then ensure you have them to hand.
- Collate any other documents that you have for your property: for example, if works have been done to your property, such as a damp proof course, then ensure you have to hand any guarantees that have been issued. Similarly, collect together any certificates that have been issued for your property (such as FENSA certificates or gas safety certificates) and ensure you have these documents to hand. Most buyers will also wish to see a fire risk assessment and asbestos report. If structural works have been completed do ensure you have copies of all relevant planning decisions a building regulations completion certificate.
- Energy Performance Certificate (EPC): All properties that are rented or sold now require an EPC. Subject to the availability of an energy assessor, it usually takes one to two weeks for a survey to be carried out and the report prepared. Do check that you have a valid EPC. Certificates are valid for a period of ten years unless works have been carried out in that time that will affect the energy efficiency of a property. You also need to check the EPC rating within the certificate. Properties should no longer be sold or let with a rating of F or G. If the certificate shows a rating of F or G then consult an energy assessor to identify what works need to be done to increase the energy performance rating. In many cases simple changes that have a low costs can be sufficient to increase the energy rating of a property to E or above. Any such improvement works will need to be carried out and a fresh certificate obtained so that a certificate can be provided to a buyer with a rating of E or above.
- Capital allowances: if you have not already claimed capital allowances for the property you should consider whether you would like to retain the right to do so after completion. Capital allowances is a form of tax relief and so you should seek advice from your accountant on this relief as early as possible. Should you wish to retain the ability to claim capital allowances then in many cases a specialist surveyor needs to be appointed and a report prepared. This can take time and so it is important to consider it as early as possible.
- Locate your mortgage details: you will need the name of your mortgage lender, your mortgage account number and contact details for your relationship manager. It is always prudent to check at an early stage the amount outstanding on your mortgage to ensure any figure agreed for the purchase price is sufficient to repay the mortgage.
- Consider the proposed transaction structure: you should consider at an early stage how the transaction is to be structured and take both solicitors and accountants’ advice on your proposals. It may be that the structure you envisage is not possible or has significant tax implications.
- Consider whether a licence to assign is required: if the property that you own is a leasehold property then consider whether or not you will need consent from the landlord (a licence to assign) before the property may be sold. The application for consent can be a lengthy process and so it is prudent to start it as soon as possible. Once a suitable buyer has been found, firstly check the lease for the property to identify whether the landlord’s consent is required before you sell the property. If that consent is necessary, approach your landlord with details of the proposed buyer and see what requirements they have. The landlord will wish to approve the buyer and be satisfied that they will be a suitable tenant in the future. You can approach your landlord direct or you may wish to ask your solicitor to do so.
- Make a start in completing the Commercial Property Standard Enquiries (aka CPSE): these are lengthy forms that ask a number of questions about the property. Sellers do find them arduous to complete and so it can sometimes delay transactions by weeks as a result. In addition, sellers may require assistance from their accountants, property managers or other professionals to complete some of the questions which can again cause a delay.
- Determine whether your property is “VAT elected”: this is an issue that delays many transactions. A seller will be required to confirm to a buyer whether or not the property is VAT elected. If a seller is not VAT registered then VAT election is not a consideration. That said, if a seller is VAT registered then they should make enquiries to be certain whether or not the property is VAT elected. Failure to deal with this issue properly could cause a seller a significant loss. Sellers should approach their accountants and ask them to confirm the VAT position. Sometimes it is not possible for accountants to be certain and so a written request needs to submitted to HM Revenue and Customs. They will be asked to confirm whether or not their records show that an “option to tax” has been submitted for the property. We have experienced delays of six to ten weeks in waiting for a response from HM Revenue and Customs and so for this reason it is prudent to consider VAT as early as possible.
- Instruct a suitably qualified solicitor: it is important that you instruct a solicitor with sufficient experience to deal with your transaction. In many cases when a solicitor who lacks experience is appointed it will lead to delays and increased costs.
Stephensons' commercial property team are highly experienced in the sale of both properties and business. We would be happy to discuss your property and/or business sale needs with you in preparation for sale. Call us for a no obligation discussion on 0175 321 6399.