Commercial Conveyancing Explained

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Commercial conveyancing is the legal process of buying, selling and leasing land and property to be used for commercial purposes such office space, industrial use or retail. Commercial conveyancing should not be confused with buying and selling residential properties on behalf of property investors - this is residential conveyancing.
The processes of residential and commercial conveyancing are broadly the same however there are some important differences.
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How is the Commercial Conveyancing Process Different from Residential?

The main way in which commercial conveyancing differs from residential is that contracts tend to be exchanged at a much earlier stage. In residential transactions once an offer to sell has been made and accepted the buyer will conduct all of his searches and enquiries and will only exchange when, but for collecting any monies from his client and the mortgage lender, he is ready to complete.

In commercial conveyancing on the other hand, an agreement will be signed at an earlier stage and then investigations will be made, with opt out clauses in the agreement in the event something is discovered which changes the nature of the transaction.

VAT on Commercial Conveyancing Transactions

Land transactions are subject to VAT at the prevailing rate (currently 20%). Residential land transactions (including buy to let) are exempt but other transactions, including commercial conveyancing transactions are not. The rules on payment of VAT for commercial conveyancing transactions are complex and require specialist advice but generally, as with any other transaction which attracts VAT, it will be the buyer who pays.

Conveyancing Fees for Commercial Conveyancing Transactions

Unlike the residential conveyancing market, where intense competition has driven down fees so that a transaction can be dealt with for as little as L250 plus VAT, commercial conveyancing fees remain at a more normal level and are usually charged by the hour. The work is more complex, the person dealing with the matter is more likely to be a solicitor and he will tend to do more negotiating than a residential conveyancer would. In commercial conveyancing it is probably more important to have a “good” conveyancer than it is in residential transactions.

RESOURCES - Commercial Conveyancing:

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