Solicitors have long been the butt of jokes about sharks and charging for every minute of their day, but we have our place along with other professional advisers!
Set out below are some examples of where early discussion with advisors can prevent problems and avoid unnecessary expense and delay with proposed projects or transactions:
Many sites are shared between owner and third parties. The owner may be relaxed about this and say, “Don’t worry, I’ll set up a simple licence agreement and I can give them one month’s notice to leave”. Any written agreement can be irrelevant; if the occupant has exclusive possession of an area and pays a rent then they will be a tenant meaning they may have rights of security under the Landlord and Tenant Act 1954.
Before letting third parties use part of a site, talk to your solicitor. Setting up a proper tenancy agreement to avoid the rights of security under the 1954 Act can be simple, inexpensive, and very cost effective in the long run.
Business Restructures or sales
For any business restructure, consider tax implications, bank borrowing, property issues including possible Stamp Duty charges, and employees and their employment rights. Not an exhaustive list but all areas needing careful professional consideration to avoid pitfalls and delays.
Set up an early round table meeting with relevant professional advisors to establish what your aims are and therefore what issues need to be resolved, how, and by whom. Follow up with appropriate advance action.
Property Sales and Leases
You may be very confident that you have a clean title with no potentially problematic restrictive covenants or third-party rights affecting your property. It is always worth checking this with your solicitor before the property is marketed. Where leasing or selling part only of your property, consider at an early-stage issues such as access and services for the area being sold and the area being retained. Will the letting or sale prove potentially disruptive to the retained land and/or business.
Instruct your agents and solicitors to collaborate in reviewing titles and the practical arrangements on the ground and arrange a site meeting with your solicitor and agent to discuss these issues.
How often do we find, when instructed to act on a sale, that third parties unconnected to the seller have been allowed access and use of parts of the property. This may be for their own use, business or otherwise, and they may be paying a rent or be allowed to occupy free of charge. In a large farm sale where I was involved, the slightly eccentric seller referred to these as “kindnesses”. It is, of course, admirable to help others, but to do so informally can have very unintended consequences.
Before committing to any “kindnesses”, check with either your solicitor or a surveyor what the implications might be.
Beware a commercial contract which seems too good to be true – it probably is.
Unless you are certain that you understand all the implications do not sign contracts put in front of you without getting them reviewed by your solicitor. If someone is pressing you to sign up very quickly it is probably because the contract is deliberately disadvantageous for you.
- Take professional advice early
- Encourage site meetings
- Set up meetings of all relevant advisers
- If you are concerned about incurring professional fees, talk to your professional advisors about fee structure and charging methods, which they should be able to tailor to suit you, your business, and cash flow.