Buying Premises

7. Legal Stages

Employ a property lawyer to carry out property searches and other legal 'due diligence' and to complete the purchase transaction.

Ask your solicitor, at the beginning, for an estimate of your legal costs and other expenses.

Legal due diligence can take several weeks. It involves getting answers to six main questions.

7.1 Are the premises actually owned by the vendor, and does he or she have the right to sell them to you?

7.2 Are there any restrictions on the use of - or alterations to - the premises?

These restrictions may be embodied in covenants, or form part of the terms of planning consents for the premises. For example:

• Only certain trades or professions may be allowed to occupy the premises.
• Trading hours, or vehicle access, may be limited to protect local residents.
• Others may have rights over the premises which might affect its use.
• Displaying an external sign on your premises may be forbidden.

7.3 Are there any current or future planning decisions which may affect your premises?

• New roads, one-way streets, parking restrictions, pedestrianisation schemes or general building works might have an impact on your business.
• Find out whether any consent to build on the land has been given, or refused, as this affects its value.

7.4 What guarantees are available on the premises?

• Check if building, damp-proofing or pest control work has been done in recent years. If there are warranties, establish whether they are transferable and how long they will cover you for.

7.5 Are there any practical problems with the premises? For example:

• Does the property have all mains services?
• Have there been any conflicts with neighbours, such as boundary disputes or problems with noise or careless parking?

7.6 What equipment is included in the sale?

• Check whether appliances such as boilers or air conditioning units have warranties, and when these items were last serviced.
• Check that this equipment is actually owned by the vendor and not part of a hire purchase or leasing agreement.