What Is Commercial Property Law?

Commercial property law is concerned with the purchase, sale, lease, and use of land for commercial purposes, whether for development or investment. This field of law is relevant to all sectors of business and industry, and intersects with other fields of law, including environmental, planning, construction, and tax law. For instance, people working in industries such as agriculture, hospitality, residential development may have need of a commercial property solicitor, in addition to people who own, buy, and sell commercial property.

Commercial property law includes a wide range of transaction types that develop over both the short term and long term. These include freehold property transactions, commercial leases, commercial property acquisition and development projects, option agreements, and matters relating to these transactions, such as property valuation, legal research, financing, and dispute resolution. Some examples of issues that are covered by commercial property law include:

  • Leasing of commercial property, and disputes between landlords and tenants of commercial properties;
  • Matters relating to purchase, management, and sale of investment property;
  • Development of both residential and commercial building projects;
  • Issues relating to financing of commercial property purchase or lease, and funding of building projects;
  • Resolution of commercial property disputes via litigation and alternative methods of resolution such as mediation and arbitration.

Processes Involved in Commercial Property Law

Conveyancing

Conveyancing is the process by which a property changes hands from the seller to the buyer. In commercial conveyancing, the seller or buyer may be an individual, or may be part of a business or other organisation. While commercial conveyancing often involves the sale and purchase of commercial properties, the sale and purchase of residential investment properties may also fall under commercial property law.

Both the seller and the buyer, and their solicitors, have some obligations and tasks to complete when a commercial property changes hands. For instance, on the seller’s side, the solicitor prepares a sale contract, while the seller completes a variety of forms relating to the property. The buyer and their solicitor will perform a title search and other property searches, and arrange financing for the purchase. Arranging financing, typically in the form of a mortgage, takes a significant amount of preparation, as mortgage lenders want to see evidence that the buyer or their business can afford the mortgage even if the business runs into financial trouble, and that the property is valued appropriately.

Note that the requirements for title searches and other legal searches such as rights of way, easements, boundaries, and commercial property standards enquiries (CPSEs), aren’t necessarily restricted to the conveyancing process. Many of these searches should also be performed by someone who is leasing commercial property, as they can affect how suitable a property is for an intended purpose.

After performing the searches the buyer can also raise with the seller any concerns or questions about the property. Once any issues are settled the contracts can be signed and exchanged, the buyer pays a deposit to the seller, and then pays the balance once a signed transfer deed has been approved by the seller and their solicitor.

Dispute resolution

As with most kinds of legal disputes, there are two main avenues for settling a commercial property dispute: litigation, and alternative dispute resolution methods. Typically, for any given dispute the parties involved will attempt to resolve it through an alternative method before attempting litigation. There are several ways that a dispute can be resolved outside of the court system, including negotiation, arbitration, and mediation.

Negotiation is a relatively informal way to resolve a dispute, in which two or more parties, or their solicitors, try to reach an agreement before attempting another method. Negotiation doesn’t necessarily resolve the issue but it’s a good way to make sure both parties understand the specifics of the dispute.

Mediation provides a neutral forum that allows two parties to try and reach an agreement, guided by a trained mediator. However, there’s no guarantee that mediation will resolve the dispute, as the mediator can’t make a legally binding decision.

Arbitration is somewhat similar to the court process, but is conducted in private. A professional arbitrator is assigned to hear the case, in the same way as a judge would hear the case in court. The arbitrator hears evidence from both parties and then makes a legally binding decision.

Litigation is typically a last resort, and the court is applied to only when alternative methods of resolution fail. Litigation proceedings are initiated by a claimant, who files documents with the court to request a hearing. During litigation, the claimant and defendant have a chance to make their case and provide supporting documentation and other forms of evidence. After hearing the evidence, a judge makes a legally binding decision. However, while the judgement is legally binding, the court does not enforce the decision, which means the legal judgement may not fully resolve the dispute.

How Can A Solicitor Help?

On a day-to-day basis, any individual or organisation that owns or leases commercial property may have need of a solicitor. Since commercial property law is applicable to a wide range of industries, and intersects with many other fields of law, the kinds of work a solicitor does within this field can vary. However, the core aspects of what a commercial property solicitor or law firm that specialises in this area of law can help with generally relates to buying, selling, and leasing of commercial property. For instance, they can:

  • Provide legal advice to buyers, sellers, landlords or tenants of commercial property in matters relating to property acquisition or leasing;
  • Provide legal advice to property developers involved in new construction projects;
  • Research property information such as CPSEs, boundaries, pending disputes, planning permissions, local authority disputes, easements, and other issues.
  • Draft, complete, and file paperwork and documentation relating to commercial property matters;
  • Help buyers, sellers, landlords, and tenants negotiate a sale or lease contract;
  • Help people resolve disputes relating to a commercial property they own or are buying, selling, or leasing;
  • Provide conveyancing services for commercial properties, meaning assistance with the legal processes involved in buying or selling property.