BUYING BUSINESS PREMISES

Businesses looking for premises will often choose to rent, but if you have some capital available for the initial investment, it’s worth considering the advantages of buying your own commercial property.

Buying commercial premises has a number of benefits over renting. Commercial mortgage repayments can work out cheaper than rental costs and at the end of the mortgage term the property will belong to you. The property will form part of the assets of your business and if it increases in value will provide a good level of security for the business and its owners.

You will also have a lot more freedom to do what you want with the property and you do have the option to generate income by renting it out or by selling it at a profit. However, there are still certain restrictions and regulations, and the legal process when buying a property can be complicated. That is why it is important to get an experienced property solicitor involved at the earliest opportunity.

Advantages and disadvantages of buying your own business premises

Most small and new businesses will not have the capital to buy premises and renting may be a more viable option. However for those businesses that do have the capital, buying premises can offer a number of advantages.

• Greater Freedom, subject to planning regulations to use the premises, as you require.

• More flexibility over the management or repair of the building.

• Receipt of any future profits if the building appreciates in value.

• Option to let the property at a future date and benefit from the rental income.

• Ability to move when you wish, as you will not be tied to any fixed term contract.

However, there are greater risks and more financial commitment than with renting. Buying a property could:

• Tie up your capital, which could be used to invest in other aspects of your business

• Leave you with negative equity if the property falls in value.

• The threat of repossession if you cannot keep up with mortgage repayments.

• Commit you to ongoing costs of repair and obligations

• Make you responsible for the safety of the building with any associated costs.

The key is not to rush into any decision but to take good professional advice.

Our team of specialist property solicitors at Marshall and Galpin in Oxford will happily provide support and legal advice.

Finding a suitable property to buy

Commercial property is often advertised in the property supplements of local papers.

It is also worth searching the Internet and checking with local estate agents, commercial surveyors and local authorities.

Here are a few points to consider before buying:

• What is the type of premises required (Office, factory, warehouse or a combination of these)

• What space is required to meet your current and forecast business needs?

• What facilities are required (electrics, plumbing, car parking)

• Is the location of the building suitable for your needs?

• What is the budget available?

• Are there any local planning restrictions?

You can always get professional advice from a chartered surveyor about whether the property really suits your needs, and meets legal requirements regarding fire, health and safety.

Buying commercial premises is a long-term investment, therefore if there is any doubt, consult a Chartered Surveyor to advise you as to which property best meets your requirements.

Making alterations to your property

You may at some point want to alter the property so that it fits your purpose. If so, there are a number of important things to consider before committing to the purchase.

You will need to consider the following:

• If the alterations change the size or purpose of the building, you may need to get planning permission.

• The building may need upgrading to make it accessible to disabled people

• You may be affected by building regulations

• Will the alterations affect the building’s energy efficiency rating and increase your fuel costs.

• Are there any materials that contain asbestos that need to be disposed in a safe and environmentally friendly way? If in doubt, refer to your local health and safety executive website.

We strongly recommend that you take professional legal advice before undertaking any alterations to your premises.

Why use Marshall and Galpin solicitors

At M & G Oxford office, we have a team of specialist property law solicitors who will ensure that you fully understand your contract and responsibilities before signing.

We will:

• Make sure the seller has a good title to pass to you – in other words, that everything about the ownership of the property is in order.

• Negotiate and obtain the best terms for your contract.

• Carry out searches to check if there are any problems with the property.

• Satisfy your bankers or other lenders that the property is a good investment

• Complete your purchase as quickly as possible.

• Deal with any planning issues that may occur.

We pride ourselves on our personal and efficient service.