Making sure you are transparent about your commercial investment will mean that you are more likely to find a buyer (trust can be earned with honesty).
It also means that you won't have to deal with any legal ramifications further down the line. Here's what you need to know about seller confidentiality.
You are obliged to reveal certain factors to the buyer before they make their purchase.
For any property sale, the vendor must make use of The Law Society's information Form, also known as a TA6.
This form is completed by the seller and must provide detailed information about the property being sold.
It is in this form that sellers are required to lay out all of the issues that exist with the property.
To avoid any problems sellers must:
- Complete the form to the best of their knowledge
- Provide all supporting evidence in relation to the property in question
Sellers must not
- Exclude information that they know should be included
- Provide incorrect information
A TA6 is crucial to the sale of the business because the buyer will rely upon it when they decide whether to purchase your property or not.
When it comes to selling office space, for example, you need to tell them exactly what they own.
Are the communal spaces such as the stairway or kitchen areas? Who do they belong to? Are there other offices in the building who they will share facilities with? What are they responsible for maintaining?
Telling people about these factors before they buy will put them at ease when it comes to making their investment, but it will also mean you are legally prepared.
Remember, in situations like this, the Misrepresentation Act 1967 states that the burden of proof is on the seller so it's imperative that you are honest, open and up front.
What to reveal
There are certain things that you are obliged to tell sellers. And there are others that aren't compulsory, but you should consider revealing in order to impress them.
Legal obligations include insurance details, disputes that have cropped up, changes that have been made to the building, planning permissions and applications for development.
You can back these up with documentation. The seller should provide copies of all planning permissions, building regulation approvals and supporting documents - this will help to reduce the disputes down the line and often means a reduction in costly delays to the purchase process.
Other things that you might choose to reveal could include details of office maintenance, parking facilities and anything else that will help to wow the buyer and make them want to buy your commercial space.
Honesty is the best policy
When it comes to selling a property of any kind, the best thing to do is, be honest.
This not only will it help to create a level of trust between buyer and seller, making them more likely to do business with you, but it will also mean that you are not open to any legal ramifications.
It's best to tell them about any substantial problems early on in the negotiation stage. If there is any structural damage, for example, reveal this early on in the process.
It is likely that you will face further questioning from buyers who want to know as much as possible before they part with their hard-earned cash. Be honest and direct - vague answers will only serve to alienate people and leave them under the impression you have something to hide.
Demand for commercial properties is growing, this means that getting a good deal as a seller is more likely.
This rise in demand means is that there are more buyers, in the commercial market as well as the residential sector.
In bigger cities, this can lead to a trend called gazumping. If you have Grade A stock that is in high demand, you may have a number of people looking to buy it. This, of course, means you will have numerous offers.
Accepting the highest offer
Offers are not legally binding until the exchange of contract, there is nothing illegal about accepting one offer and then disregarding it in favour of a better one. But you should tell the buyer this.
Let them know that if someone else bests their offer then you will be looking to accept it, and tell them in writing when one comes in. Not only is this good practice, it's also a more honest way to work. And the chances are, if you have been open with someone, they'll be more likely to make you a better offer.