January 12, 2024
The sale of any property requires documents to be provided to the purchaser to progress the sale. In commercial property, there are specific documents to supply which are detailed below.
Commercial Property Standard Enquiries
- There are various versions of the CPSEs which should be filled out depending on the property. The CPSE1 covers general pre-contract enquiries. CPSE 3 enquiries are used when a new lease is being granted and CPSE 4 is filled out on assignment of a lease. There are 7 of these forms in total.
Energy Performance Certificate
- This provides the energy efficiency of a property from A-G. For a buyer, this gives an idea of the costs related to heating and powering the property and also, how much Carbon Dioxide it emits. As of 1 April 2023, all commercial properties must have an EPC rating of E or above.
Planning/Building Regulation Certificates
- These documents are important in commercial transactions because they provide evidence that building works have been conducted in accordance with building regulations. Planning documents provide certainty to buyers that the use of the property or development at the property is lawful.
VAT documents
- In a commercial property, the owner can choose to charge VAT on the sale. They do not always choose to do this and therefore these documents are not always needed. Opting to tax allows the seller to recover sums of VAT on the property. Often the sellers’ solicitors provide the Application document to Register for VAT and the Notification of the Option to Tax to the buyer.
Service Charge Accounts
- If there is service charge payable at the property, accounts from previous years should be provided to give the buyer an idea of what may be payable in the future. Ideally, the previous 3 years of service charge accounts should be provided to the buyer.
Title Documents
- This is vital to the sale as it allows the buyer to check that the seller is the registered proprietor and the property is sold according to the title plan. The title register can also show any restrictions or covenants which may affect the property. The buyer’s solicitors can then review this information and flag any potential issues to the buyer.
Contract
- This document lays out the conditions under which the property is sold. Before exchange, each party will sign the contract to confirm they are happy to enter into the transaction. Your solicitor will review the contract carefully prior to you signing to ensure you are aware of the conditions set out.
Insurance
- Insurance documents for the property should be provided by the seller. This allows the buyer to review what is included in the insurance package, how much this costs and when it needs to be renewed.
Asbestos Report
- Whilst there is no legal requirement for a seller to provide an asbestos report to a buyer, there is a legal requirement to have an asbestos survey and management plan in place if the property was constructed before 2000. If the seller cannot locate their report they need to conduct another survey as this is legally required. It is advised that this report is then supplied to the buyer but this is not mandatory. Due to the severe consequences of exposure to asbestos, it is unlikely a buyer will continue without a report from the seller. A report will be required if the buyer is getting a mortgage for the property.
Fire Risk Assessment
- A Fire Risk Assessment should be provided by the seller to highlight the fire hazards at property. This can also provide information on how/whether the seller has combatted these risks in their time at the property.
Gas Records and Electrical Reports
- These documents provide evidence that all gas and electrics within the building are in working order and have been tested.
Lease or tenancy agreements
- The seller will need to provide any leases affecting the property and any other title documents referred to in the register to provide the buyers with a clearer picture of the title history of the property.
If you would like to instruct a solicitor to represent you in your commercial transaction as either a seller or a buyer, please contact us at 0121 705 7571 and ask to speak to a member of the commercial team or at enquiries@wallacerobinson.co.uk
Charlotte Peplow
Trainee Solicitor – Commercial Property Department
This article is for general information purposes only. It does not constitute technical, financial, legal advice or any other type of professional advice and is no substitute for specific advice based on your individual circumstances. We do not accept responsibility or liability for any actions taken based on the information in this article. For more information, please click here.
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