If you are considering buying a property or are currently in the process of relocating your business premises, it is crucial to discuss your situation with one of our commercial property solicitors. Buying or selling a commercial property can be a daunting process, but with expert legal advice, you can avoid the pitfalls and move forward smoothly.

Buying or selling a commercial property

Buying commercial property can be a lucrative investment, offering tax advantages, cash flow opportunities and equity appreciation. However, it can also come with serious risks, so you need to take your time and do your research before making a purchase.

One of the first things you should do is get an idea of what kind of commercial property you need, where you plan on locating it and how quickly you will need it. This will help you determine an appropriate asking price for your commercial property.

Another important aspect of selling a commercial property is getting it appraised. This will ensure that you’re pricing the property appropriately, so that it sells for a reasonable price and attracts buyers.

A good appraisal will consider the differences between the property you’re selling and similar properties on the market, including legal, economic and physical factors. The appraiser will then calculate a capitalization rate, or cap rate, which will help you figure out the right price for your property.

The value of a commercial property can vary significantly depending on the location, age and condition of the building. This makes it important to hire a professional who has experience in the area to conduct an appraisal.

Once you have an appraisal completed, you can put the property on the market and begin marketing it. This can include using social media, online advertising and other tools to find prospective buyers.

You can also contact a local real estate agent to list your commercial property. They will advertise it to the right audience, link you up with professionals you may need, broker deals and ensure that the whole process runs smoothly from start to finish.

Leases

A commercial lease is a contract between the landlord and tenant which governs the use of property for a period of time. It also sets out the terms of rent and other expenses.

Before a lease is drafted, an agreement in principle is usually drawn up between the parties and referred to as a letter of intent (LOI). This will specify a number of important points such as monthly rent, square footage being rented, term and renewal periods, security deposits and upfront rent, tenant improvement allowances, etc.

The lease will also stipulate what happens if the tenant does not occupy the property in accordance with the agreed terms of the agreement. Often there is a security deposit which will be taken from the tenant in the event of damage or failure to pay rental payments.

These clauses can be extremely complicated and need to be reviewed thoroughly by a solicitor before signing. Having a lawyer review these clauses can save you thousands of dollars in potential legal fees and stress in the future.

Similarly, escalation clauses will set out how the landlord can increase your rent if costs such as insurance and taxes increase. These clauses are designed to allow the landlord to temporarily increase your rent if they see a change in costs that will impact your business.

This type of lease can be beneficial for small businesses which cannot afford to pay a large base rent. It can also be used for businesses that are in the early stages of their growth and expect to have a substantial increase in sales in years to come.

The lease may include a build-out credit which allows the tenant to make improvements to their premises at the landlord's expense. These credits can be reduced, reimbursed or paid out of pocket by the tenant depending on the circumstances.

Refinancing

Commercial property refinancing is the process of getting a new loan to pay off an existing mortgage. This can be done for a variety of reasons, including lowering interest rates or avoiding a balloon payment. It can also be used to tap the equity in your commercial property for improvements or to add a new property to your portfolio.

The main reason people refinance their commercial properties is to get a lower interest rate. Refinancing can also be used to get a longer amortization period, which means the loan will have fewer monthly payments.

Another benefit is that commercial real estate loans often have shorter repayment periods than residential mortgages, which can save you money on your monthly payments. Refinancing can also be beneficial if you have an adjustable-rate loan, which is risky because rates can go up.

Refinancing can be a complex process, so it is important to work with an experienced lender. You’ll need to provide a good operating history, a business plan and a detailed set of financial documents.

You should also consider the costs associated with refinancing, such as an origination fee. These fees are typically 1% of the total loan amount, so it may be worthwhile to calculate how much the savings from a lower interest rate and a longer term will offset these costs.

If you’re considering refinancing, it’s important to understand the different types of commercial mortgages and their benefits. The most common type of commercial mortgage is a conventional loan, which comes from a traditional bank or mortgage lender. Other options include bridge loans and hard money loans. These are often more expensive than conventional loans, but can be useful if you need financing quickly.

Lease renewals

Lease renewals can be a tricky situation to negotiate. However, with the right strategy and a bit of patience, you can secure a better deal for your business.

It is important to understand the legal process of lease renewals so that you can be sure that your rights are protected. This is particularly the case when you are negotiating a commercial lease renewal.

A commercial lease renewal is usually initiated by a landlord using section 25 of the Landlord and Tenant Act 1954 or, alternatively, by a tenant applying to court under section 26. Both parties must follow the correct process and serve the required notices at the right time to avoid problems later on.

Generally, landlords send their tenants a renewal three months before the original lease expires. This provides tenants with enough time to consider their options and make an informed decision about the new contract without feeling rushed by the landlord.

If you are thinking about renewing your lease, it is worth considering whether you want a fixed-term lease or a month-to-month lease. A fixed-term lease means that you will stay in the premises for a set period of time, such as 12 months. A month-to-month lease, on the other hand, is a flexible option that allows you to end the agreement at any time.

When negotiating your lease, it is vital to take the market into consideration. This will help you to assess your position as a renter and use that information to negotiate a more favorable offer from your landlord.

It is also important to keep in mind that there are limits on what your landlord can increase your rent if you’re in a rent-stabilized apartment. These restrictions are governed by the law and you should check with your local council to ensure that you’re not overpaying for your accommodation.

Lease extensions

A lease is a contract where the user of an asset (such as a property, car, home, or building) agrees to pay the owner for using it for a certain period of time. It’s common for landlords and tenants to enter into a lease agreement when renting property, but it can also be used for the use of equipment, vehicles, machinery, and plants.

When a lease expires, the tenant and landlord may choose to negotiate a lease extension agreement. This is a way to continue using the property without having to go through the process of finding another one, and it may be beneficial for both parties.

However, before you decide to extend your lease, it’s important to understand what is involved in the process. You’ll need to provide notice to your landlord, and you’ll need to get a valuation for your property.

The cost of a lease extension can vary widely depending on the type of property, the unexpired lease term, and the current value of the property. It can also depend on whether you’re applying for a statutory or a voluntary lease extension.

Both a statutory and a voluntary process can be lengthy, so it’s best to discuss your situation with one of our commercial property solicitors before you begin. They’ll be able to advise you about how long the process will take and how much it might cost.

You might need to pay for the valuation and the legal costs of extending your lease, so it’s important to be sure that you can afford it before you apply. Having an experienced lawyer guide you through the process can help to ensure that everything goes smoothly and quickly; go to website