Conveyancing has been a word on a lot of people’s lips over the past year.
With the residential housing market reaching record-high demand, one of the common points where delays occurred was in conveyancing, a process where a series of checks were made to confirm that the seller legally can sell the home and there are no complications making it difficult for the buyer to sell it later.
For commercial property solicitors, the conveyancing process works slightly differently for commercial property compared to residential conveyancing, although the process is not quite as different as one might expect given how different commercial property is to residential.
Here are some of the main differences between commercial conveyancing and residential conveyancing.
Leasehold vs Freehold
One of the most substantial differences between commercial and residential conveyancing is the type of title that you are purchasing in both cases.
The majority of homes and almost all new builds are freeholds, which means that the titleholder owns the building and the land it is on forever.
This is different for a leasehold property, which is where a property is only owned for a specific time.
This provides business owners flexibility to adapt to changing demands of the business, either by expansion or moving to a smaller office.
Goodwill Payments
Residential conveyancing does not have any additional fees outside of the cost of conveyancing. However, completing a commercial property purchase sometimes requires a goodwill payment to be paid.
This is usually the case when purchasing businesses outright, and is typically used to facilitate a seamless transition to the new ownership.
Search Costs
As commercial property tends to be larger than residential costs, the cost for conveyancing searches, such as for flood plains or underground utilities information, tends to increase.