Commercial Property Solicitors

Buying:

Evidently purchasing a commercial property one hopes the store of value will maintain, the asset will increase in value etc. but the rental income is key to ones short, medium and long term outlook for the investment.

The person will need their architect to assist but on the legal side yoursolicitor will check the title and the underlying lease under which the tenant holds the premises. Is the tenant reliable and is there a guarantee as well ?.

The tenant might be excellent but is he leaving the property next year on foot of a break clause in the lease that you didn’t notice? Are the Tenant covenants in the lease well drafted and clear?  Your tenant is liable for rent as well as the service charge, commercial rates and of course all heating and light bills 

Is there a forfeiture clause in the lease which would allow you to eject a tenant who is in arrears with the rent without the hassle and expense of going to court at all? 

Stamp duty on commercial properties is imposed at 7.5% of the purchase price which is quite substantial frankly.

Ones accountant will advise on any tax issues before you buy. He might suggest you purchase in a company name especially if you were making several purchases and will hold the properties for a number of years. There may be Capital Allowances which you could benefit from if the property is new build or in a particular tax zone.

The architect will inspect the building for you and the planning documents. Has the tenant put up a mezzanine floor some years ago without obtaining permission? for example. If the property is quite old and let to several tenants, is the roof in need of major repairs which could be your liability? will all need assessment.

On a general note rental income is often taxed on top of your other income at a higher rate and also that USC is now charged on rental income.

Selling:

Try and use an agent experienced in selling commercial property. Sometimes it can take time to sell

Ask your accountantto figure out your likely tax liability. This will have to be paid shortly after the sale closes. You can set off your legal and other fees against any gains and you can also put the stamp duty and the initial purchase price as a possible set off against liability. The longer you owned the property, the lower your tax bill can be.

In some cases, your solicitor may suggest selling the property by way of a Share Purchase Agreement if the property is held by you through a company. Sometimes a purchaser will ask for this method of purchase as it reduces his own stamp duty.

Your solicitor will liaise with your own accountant as to whether you are liable or not for Capital Gains Tax, if you roll the sale proceeds into another commercial purchase soon after the sale is closed etc.

In general, the rewards from commercial property are much higher than residential. However, the input costs are higher too and so the whole endeavour the basics need to done right help the transaction get off to a good start.   

If a person requires legal assistance on a property sale/purchase matter from Commercial Property Solicitors, we can be contacted on  (052) 612 1999 or (01) 546 1121.