Business Solicitors

Purchase or Lease?

There are two main forms of getting your business a new property – commercial conveyancing and commercial leases. These two types do differ in fundamental ways, so it is important that you decide carefully which option is best for your particular circumstances. Whether to purchase or lease property is a question as old as the hills, but in the modern business world there are innumerable pitfalls and traps for the unwary and the inexperienced.

Buying

If your business decides to buy a new property rather than lease it, then the processes involved stem primarily from commercial conveyancing regulations and laws. Commercial conveyancing is essentially the transfer of ownership from the seller to the buyer. Contracts should be exchanged after legal ‘title’ is obtained on the land. Once the property is yours, there is yet still a complicated system of land registration processes to undergo. Failure to properly complete these processes – even subsequent to your purchase of the building – can and often does result in legal problems.

Specialist Solicitors

Commercial conveyancing in the United Kingdom should always be carried out by a professional solicitor or licensed conveyancer. Typically the agreement between a buyer and seller becomes legally binding at the moment they exchange contracts. There are a large number of things to consider, not to mention legal materials to gather. The buyer will agree on a price, and then arrange for a property survey to be undertaken. A solicitor must then perform a house search on the property against various government and public records and then in turn develop you a contract. The content of this contract is crucial to the present but also future integrity of the sale, and cannot be taken lightly. Many people experience problems when the other side decides to pull out of a deal before the process is complete. There is no certain way around this problem as gathering the property deeds does take some time. In Scotland the initial offer is legally binding however, and as a result contracts tend to be concluded much faster.

Advantages of Commercial Leases

You really can save money via a commercial lease. Your business is left with more options than if you purchase the property and considerably less of an expense for the use of the property. You are typically not under any obligation to continue your lease after the contract runs out. Furthermore, lease expenses can sometimes be written off against tax.

Disadvantages

Your business could miss out when it comes to capital gains in the long run. Property prices continue to rise each year. Purchasing outright avoids any complicated that can arise thanks to trying to end your lease early – a complicated and expensive procedure that often leaves you worse off than you would have been. You also avoid any issues with your lease increasing if your business becomes more successful – a clever ploy used by some owners to increase their rental gains. It’s vital you gain some legal advice before moving forward – fill in the contact form on this site for a free call and legal advice from one of our friendly, plain speaking experts. We’re here to help.