1. How do I buy/sell a property at auction?
Be very careful about buying a property at auction, because as soon as the hammer goes down and the property is knocked down to you, you have an absolute contractual obligation to buy that property, in most cases, 28 days after the auction. That is the case even if there are problems with title, planning issues or anything related to the physical condition of the property. It is vital therefore to have a solicitor examine the auction pack produced by the seller’s solicitors and to advise you. in most cases it will also be highly advisable to instruct a surveyor to inspect the premises
Selling a property by auction is often a good way to sell a more unusual property, or one with particular issues. The advantages are certainty of sale, once the hammer has fallen, and hopefully, a good price achieved. You will however need to put together an auction pack with your solicitor to make sure all relevant matters are disclosed so that you cannot be sued for misdescription. To make sure that the property is not sold at a price lower than you are prepared to sell, you will need to agree a reserve price with the auctioneer.
The property team at Wake Smith are highly experienced in both preparing property for sale by auction, and in investigating properties for sale at auction
2. I want to sell my business and the premises are leasehold. What do I do next?
Once you have found a buyer for your business, you will need to approach your landlord to obtain their consent to assign the lease to the buyer. An assignment of a lease involves transferring the lease so that the buyer becomes the tenant. Your landlord will want certain information from the tenant so that it can form a view whether the buyer is a suitable tenant and can afford the rent. You will need to be comfortable about this as well because, if the rent does not get paid you will probably end up paying it because the landlord will look to you to pay the rent under the “authorised guarantee agreement” that the landlord will more than likely require from you. the icing on the cakes is that you are likely to have to pay the landlord’s solicitors legal and maybe surveyors fees of up to £1000, so you need legal advice to help you through
3. I own a substantial area of land and have been approached by a house-builder wanting to take an option. What does an option entail?
An option gives the party with the benefit of the option the right to buy your property at either a fixed price, or a price fixed in accordance with a formula. The option period is fixed and will typically be for a period between 1 and 5 years. It is not the same as a conditional contract whereby the buyer is obliged to buy the premises upon the satisfaction of a condition or conditions. With an option the buyer is never obliged to buy. As a landowner, you should therefore be able to recover a price for the granting of the option which reflects the time period during which you will be unable to sell your land. At the very least the buyer ought to be obliged to pay your legal fees. An option is a complex document and legal advice is essential on its terms and their commercial significance
4. I have received a notice from my landlord which says my lease is coming to an end. Can I stay in the premises?
That will depend what the notice says. If you are in occupation of business premises and your lease has not been excluded from the security of tenure provisions of the Landlord and Tenant Act 1954, then the notice will be under section 25 of that Act. The notice will state whether or not the landlord is prepared to grant you a new lease, and so, what the proposed terms are. Alternatively the landlord may state one of the number of specified grounds for not renewing the lease. In any case, this is an area where legal advice is essential and should be sought as soon as you receive the notice so that time limits for response are adhered to
5. My lease has a break option. How do I operate it?
The most important message here is that under no circumstances should you try to deal with the notice to break yourself. The lease will provide very specific provisions as to how the lease is to be brought to an end, the nature of the notice, when it is to be served and the pre-conditions to ending the lease. It is unlikely that the landlord will be pleased that it is losing its tenant and on that basis it will seek to challenge any errors in service of the notice. Time limits have to be strictly observed. So, instruct us as early as possible
6. I am buying a factory for £525,000. The Seller tells me that if we apportion £30,000 to fixtures and fittings I will only have to pay SDLT (stamp duty) at 3%. Is this correct?
In certain (quite rare) circumstances, that may be correct if the fixtures and fittings are worth £30,000. But in the buyer’s SDLT form the details will have to be set out and it is likely that HMRC will query this, and ask for evidence of the valuation of the fixtures and fittings. If HMRC find that the fixtures and fittings are worth less than £25,000 then the buyer will be left with the liability to pay SDLT at the full 4% together with interest and a penalty for late payment. Bear in mind that the value of the fixtures and fittings is second hand value and it is therefore unusual for fixtures and fitting to have a substantial value
7. I have agreed to sell land to a builder at a fixed price. Can I get more money if the land gets planning permission?
Only if the contract/transfer to the builder/buyer provides that further monies are payable. It is increasingly popular for sellers to require that buyers are obliged to include claw back or Overage Provisions in sale documentation when they are selling land that may be developable at some time is the relatively near future. However, because an obligation to pay money is a positive covenant which does not run with the land, there is a need for the drafting of mechanisms to make the obligation “run with the land”. It is essential that parties agree as much details as they can as to the circumstances when money is payable; and that they are prepared to pay their solicitors a fee appropriate for the nature of the arrangements!
8. I want to take a lease of commercial property. What should I look out for?
Lease are basically about the rent payable; other payments payable (service charge, rates, insurance premiums); repair obligations; permitted use; term (length) of the lease; and whether the lease can be assigned (transferred) or underlet to a third party. For a new start-up, knowing the extent of the financial obligation in the lease for the whole term is a good guide as to whether it is worth committing to a lease. It is however essential to take legal advice on a lease because a landlord may seek to incorporate terms that are not as agreed, and not fair to the tenant
9. I have been sent a lease of a shop by the landlord. Can you check it over for me?
This is a regular request. We are more than happy to review a lease on behalf of a tenant. However it is a proper job which needs to be dealt with as any other transactional work. It is also a two way process. You will have to tell us what you have agreed with the landlord and we can then tell you how the lease compares to the deal you believe you have. We will also advise you on what may be gained from carrying out searches, and what advantage there may be in appointing a surveyor.
10. I own retail property and my tenant wants to assign to a tenant. I am not sure the new tenant can pay the rent. What do I do?
The terms of the lease will govern what you can do. We can advise you on what your rights are. It may be that you can refuse consent quite properly under the terms of the lease, or it may be that you will be happy to grant consent subject either to the current tenant guaranteeing the obligations of the assignee under an authorised guarantee agreement (an AGA) or the new tenant giving a rent deposit to you under a rent deposit agreement. So long as the tenant is occupying under a properly drawn-up lease, you will be able to require the tenant to pay your costs for our work.
Get expert legal advice from one of Sheffield’s most respected law firms, Wake Smith Solicitors.
Our team of friendly, professional solicitors in Sheffield can provide support and advice in a wide range of areas for you and your business. Call our Solicitors in Sheffield on 0114 266 6660 or fill out the simple form below and we will get back to you as soon as possible.
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