Business Guide

Making an offer on business premises

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This article is part of our Business Premises Guide

Providing information to support business owners with some of the more common decisions and considerations that you would need to take into account when moving business premises, from taking a commercial lease or buying a property to tips on who you should seek help from at each stage.

 

When you are ready to submit your offer and if the landlord/ seller accepts it, you should request that he or she will no longer negotiate with other parties. This is called a lockout agreement.

A Head of Terms (HoTs) will be drafted by your solicitor; this is not a legally binding contract but highlights the terms of your contract with the landlord or seller of the property. It will usually include details of:

  • Property
    Including what rights the buyer will have and if it is a freehold or leasehold
  • Parties Details
    Including who is the buyer/lessee, who is the seller/lessor and their details, solicitors may also be named
  • Money and Timing
    Including purchase price, deposit, target dates for completion and planning permission details
  • Lease details
    Including rental period, rental price, security responsibilities and maintenance responsibilities

Only when the following items have been completed are you ready to exchange contracts:

  • Satisfactory inspections have been done on the building by your solicitors or surveyors
  • Tenant and landlord/ buyer and seller are satisfied with the contract
  • Any conditional planning permission has been granted
  • Necessary monies have been raised to exchange and complete the transaction

Completion is usually around one month after the initial exchange of contracts and this date should be clearly noted in the Head of Terms.

When purchasing a commercial property, it is usually the responsibility of the buyer to insure the property between the exchange of contracts stage and completion. This is usually highlighted in the Head of Terms.

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