There are a number of common issues that arise in the purchase of commercial property in Ireland whether it be by auction or private treaty. We set out these issues below for consideration.
Key issues when buying a commercial property in Ireland
There are a number of common issues that arise in the purchase of commercial property in Ireland whether it be by auction or private treaty. We set out these issues below for consideration:
Your solicitor will carry out a full due diligence of the title of the property
They will check to ensure you will be acquiring " good marketable title". If there are issues on title, they will identify these to you to allow you to make an informed decision as to whether you should proceed.
As part of the title review, your solicitor will review planning documentation to ensure all is in order and furthermore ensure they hold the requisite architects certificates of compliance which confirm that any building works were carried out in compliance with planning permission and building regulations.
The key is to ensure there are no unauthorised developments.
We will always advise that you engage a surveyor / engineer to check that the position on the ground matches the planning documentation furnished. If not further investigation is required and potentially further certification depending on the works involved.
It is also vital that boundaries of the property are reviewed and that there are no discrepancies when the maps are compared to the position on the ground.
It is important that no one adversely encroaches on to the property you are purchasing or that part of the property does not encroach onto a neighbouring property.
Another common problem is access.
As part of the title review, your solicitor will check the title to ensure the roads and services adjoining the property are either owned by the local authority or instead that there is a right of way over access roads and lands to properly service the property.
If a right of way exists it is important that this is properly documentation and preferably registered especially in light of new legislation which provides for a deadline on the registration of certain rights and easements.
It may sound obvious but it is important to check that there are no tenants in the property or if being sold as a tenanted property that a full review of all relevant commercial leases is carried out by your solicitor.
Commercial tenants can have significant rights including rights to renew and so it is critical that a full review is completed before you purchase.
Condition of the property
A full survey of the property is critical. The doctrine of “caveat emptor” (“buyer beware”) applies to the physical condition of the property. Therefore you buy "as is" and if this includes major structural defects , this is for you as a purchaser to identify. The vendor is not under any duty to disclose any issues.
Therefore a full structural survey may end up representing excellent value for money if in turn it saves you thousands in the long term.
There may be smaller issues with a property that can easily be rectified, but it is important to identify these problems and the associated costs before signing contracts.
In residential transactions, lenders do not appoint their own solicitor however in commercial transactions, a lender appoints its own Solicitor to carry out a full investigation of title and to prepare loan documentation.
The legal costs will generally always pass to you as the purchaser of a commercial property and range from €1,000 - €2,000 (lenders legal costs estimate) for a straightforward commercial property purchase to €5,000 plus for a commercial development as a guide.
You also have your own solicitors costs for acting in the purchase. Some solicitors charge a fixed fee while others will charge a percentage of the purchase price. In addition, you will also have to budget for outlays which include registration costs , Stamp Duty, search fees, commissioners fees. Outlay is calculated on your purchase price and so if you phone or email us with your estimated purchase price, we can immediately calculate these costs for you and forward a no obligation quotation for review.
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There are a number of common issues that arise in the purchase of commercial property in Ireland whether it be by auction or private treaty. We set out these issues below for consideration.Text Link
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