Legal Precautions To Take Before Selling Your Business Property
Businesses buy and sell property all the time and, whether it’s real estate or smaller items – such as vehicles, equipment, tools or stock – it’s important to take steps to protect your business, yourself and the purchasing party (or parties). If you decided on the property sale, you need to do it wisely, considering
Talk to Your Solicitor
You might think that consulting your solicitor goes without saying, but you’d be surprised how many self-assured business owners have gone a long way into negotiating a property sale before they even pick up the phone to their solicitor.
You’ll need to establish a “heads of terms” with the purchasing party (a non-binding document outlining the main details of the sale) and, while legal advice can be costly, employing a solicitor at this stage can prevent expensive issues down the line. When discussing all the nuances with your solicitor, it's better to have a list of questions you are interested in and being acquainted with some basic concepts about the commissions, bill of sale, etc.
It’s a cliché, but communication is key.
Be sure to communicate clearly and concisely with all concerned parties and, where possible, do so in writing.
If written communication is not always possible, then be sure to keep a record of meetings (by recording proper minutes) and the times and dates of phone conversations. In fact, there are many apps available for the recording of phone conversations – Just be sure to make the other party aware that you’re recording the conversation and to obtain their consent to do so.
Properly kept records of communication can help to resolve misunderstandings that may arise later in the process and can offer protection, in case of a disagreement.
This goes for communications with third parties (such as agents or legal firms) as well as with buyers!
Gather Information and Prepare
Much like selling a house, you need to prepare your business property for sale – Ensure that it is in a good state of repair and appealing to potential buyers.
More importantly, you will need to have information about your property available to prospective purchasers, such as (but not limited to):
- Details of local rates and taxes
- Information relating to health and safety issues (such as hazardous materials)
- Permitted use of the property in accordance with local laws and regulations
- Possible ways of reorganizing the space in order for it to meet the buyer’s needs.
It’s almost certain that an interested buyer will send through a list of specific questions relating to your property, so collecting all of the relevant information before this stage can help to keep the process moving and save money.
Guest post courtesy of Stewart Dunlop