Several people have asked for advice on whether they should put their properties on the market now or wait until lockdown restrictions have eased. Those going early can sometimes do well among less competition, but the requirements for online viewings, with actual viewings only allowed after a sale has been agreed, reduce your market.
Those comments apply less in the commercial world than in residential, but my over-arching advice to any prospective vendor or lessor, is to take time now to ensure that your property is ready to be conveyed. Checking now, for flaws in your title or planning status, can save you months of delay and financial loss, if problems arise during the sales process.
The classic problems arise around planning permission and building control regulations.
The standard legal contract warrants that the property being sold or leased fully complies with both codes. But does your property? It may have done when you bought it, but after an office building, warehouse or shop has had a couple of changes of manager, no-one remembers about the toilet that was added, or the new canteen or loading bays.
These are relatively minor planning issues, but they can be hard to spot without the original plans-and who has those?
So the sales contract warrants full compliance with planning and building control and contracts are signed. The irregularities then come to light when a surveyor for the purchaser, or his bank, retrieves the file from the planning office and inspects. In one case I know of, an unauthorised first floor came to light when the purchasers painting contractors estimate didn’t tally with the floor area in the planning permission.
The problems now become far greater than they probably should, but the vendor is in a weak position.
You may be forced to apply for a retention of planning permission, which will cost money, and you’ll have to cover the purchasers advisors fees as well. Expect a minimum six month delay in closing the sale. I know of cases where purchasers sued for damages for loss of business, as they were unable to commence trading. In many cases, the final resolution includes a reduction in the purchase price.
Other typical problem areas are mezzanines in retail warehousing units, offices and warehouses, often permanent in nature, and built without approval. Storage mezzanines frequently become extra retail space, in breach of the cap on retail space in the development. The erection of internal partitions and racking systems, which alter the distances to fire doors, invalidate the property’s fire safety certificate.
Breaches of planning regulations, including the uses of properties, can become exempt from prosecution by local authorities after time, but this does not mean that they become authorised, and solicitors and architects take differing views on these.
Vague boundaries, disputes with neighbours and the preparation of maps can also delay sales. Remember, a 100 unit apartment block needs 100 different sets of maps, with red lines, delineating common areas, specific car parking spaces and storage units. For new developments, delays in setting up management company structures and allocating car parking and common areas also occur.
If you have doubts about your property consult an architect and the solution may be as simple as procuring a new certificate of substantial compliance. Ask your solicitor to confirm that they have everything they need to send out a contract immediately.
Fail to prepare; prepare to fail.