Lesser-Known Commercial Conveyancing Obstacles
Conveyancing professionals working on commercial properties are no strangers to challenges at all stages of the process.
Some of the most complex obstacles surround lease terms, taxes, and overall rising costs (among others), which can affect both commercial buyers and vendors during negotiations. Whilst many of these issues are dealt with promptly and effectively, this can equally delay property exchange and completion, or even cause one party to pull out of the deal.
Beneath these common issues lie lesser-known obstacles that can further complicate matters and create unexpected friction. These often-overlooked challenges are worth understanding and perusing before initiating contact with your next commercial conveyancing client, so you can go into the process well-prepared with what to expect.
Late-emerging restrictive covenants
One of the most frustrating commercial conveyancing obstacles is the late discovery of restrictive covenants that weren’t made apparent in the initial stages. Such restrictions might limit property usage in ways that conflict with the buyer’s intended purpose.
For example, commercial properties primed for conversion into hospitality venues might have historical covenants prohibiting business activities or limiting operating hours. Discovering these restrictions late in the process can throw the entire transaction into disarray.
Comprehensive title investigations should be conducted early in the process, with full disclosure and transparency between conveyancing firms facilitating a clear chain of title from the outset.
Boundary disputes and inadequate land registry documents
Land Registry documentation for commercial properties can sometimes contain inconsistencies or ambiguities, particularly for older properties or those with complex boundaries. These discrepancies often become clear only when detailed measurements are undertaken, or neighbouring owners voice concerns, or perhaps if they have been involved in disputes.
Properties requiring renovation or restoration work may often require planning permission, particularly if outside spaces are going to be used, including outbuildings and pergolas. Suns Lifestyle, a professional garden pergola design and fitting company, advises commercial property owners to consult advice from their local council if in doubt about their proposed works, and whether a prospective structure could encroach on a disputed boundary area.
Detailed boundary surveys should be commissioned early in the process, with findings cross-referenced with other historical documents. When any discrepancies arise, neighbouring property owners should be proactively and considerately approached.
Undisclosed or unauthorised alterations
Commercial properties frequently undergo modifications, but problems can arise when previous owners have made structural alterations without appropriate consent, planning permission, or building regulations approval.
The late discovery of unauthorised work – or that which was not mentioned during the instruction stage – can warrant retrospective applications or even require substantial remedial work to ensure compliance.
When structural modifications affect load-bearing walls or elements, fire safety improvements have been ignored, electrical systems have been modified, or when extensions have been added on the sly, this can be particularly problematic.
Proactive and thorough building surveys will alleviate many of these incumbent issues, as will comprehensive documentation of all previous work. If documents cannot be found, consider commissioning specialist surveys to identify potential compliance discrepancies.
Complications with access rights
Commercial properties may appear to have suitable and inclusive access, but rights of way might be limited or shared in ways that restrict the intended use. Access rights must be considered at every juncture, and are one of the many reasons why the location of an office space, whether rented or owned, is important for business owners. Restricted access can impact commercial viability, particularly for businesses requiring frequent deliveries from suppliers or high foot traffic from customers.
All rights of way and access points must be carefully considered in multiple inspections and confirmed in legal documentation rather than relying on instinct or trial-and-error. Access rights may come with limitations regarding usage, timing, hours, or vehicle types, so these must be carefully confirmed and communicated to all affected parties in the business.
Service charge and estimation uncertainties
Commercial properties nested within larger developments are subject to service charge arrangements. Russell Cooke outlines some proposed legislation that could see a widespread reconfiguration of leasehold into commonhold properties. However, at present, service charge issues can arise when historical records are incomplete, major works are planned but not yet quantified, management structures are changing, or proportions for tenants are being recalculated.
These uncertainties create difficulties in accurately forecasting operational costs for incoming owners. As such, comprehensive service charge histories and management accounts – which must be provided by commercial landlords or managing agents – should be carefully reviewed.
Planning conditions and time-limited permissions
Some commercial properties operate under planning permissions with specific conditions or time limitations. These constraints may not be immediately apparent but can significantly impact long-term business operations.
Conditions might include:
- Restrictions on operational hours
- Limitations on noise levels
- Requirements for periodic reviews
- Time-limited permissions requiring renewal
All planning documentation must be thoroughly and objectively scrutinised for complete clarity, beyond the primary permission grants. Conditions that might affect a business’s operational visibility should be highlighted and communicated to prevent unexpected issues post-completion.
In summary
It’s clear that commercial conveyancing presents an abundance of challenges which conveyancing solicitors know all too well, made more convoluted with an increasingly uncertain housing market. These lesser-known obstacles often present the most complicated ones, but by proactively identifying and addressing these issues early on, solicitors can guide their clients towards a smoother and more efficient transaction.
Comprehensive due diligence and transparency with clients about potential risks will be most important when navigating complex property transactions, as they will make all challenges inherently easier in the long run.
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