The New Commercial Property Standard Conditions

Hello. Welcome to this. Short 20 minute talk upon the subject off the new third edition off the commercial property standard conditions of sale. Now these have bean a waited a long time, Andi unfortunately, and I think they could have done better. It's a shame, really didn't take the opportunity to introduce a lot more changes. But hey, very God. What? God. Soe interested it. So one of the main changes? Well, first of all, V a t. I'm talking about First of all, general points of detail. The 82 position under the second conditions has changed. It is now assumed that the property will be sold at a price plus the 80 Secondly, capital ounces. This is something where there's been widespread negligence by lots of sisters who failed. Deal with this properly on the provisions that have been amended update conditions to refer to the changes in general for this area. Thirdly, purchases off investment property. You'll have to think a bit more carefully about what your contract provisions are if you're buying investment property, particularly where there is brand brand issues, rent, rent issues, directory of issues on also where you need to get consent off, um, a superior landlord or something of that nature. And also where there was a rent review pending or any holding over off release, which is forming part off the port fairly. A bunch of these or something about nature money laundering started tightening up there on an express provision saying that risk will pass What exchange contract? That's been implied upto man, but that is clear that that's the case. So first of all, V. A T on it is a big one. Some of you who will be using your own firms conditions of sale rather than the liaise paper document may well incorporate condition to sell by reference. It's very important that you don't just change one part of your contract, saying the third edition are referred to bother the second edition because there are much more far reaching changes. So the 80 options in the second vicious and have been reversed in the third edition. A special condition 81 contains the optional wording where the seller is warranty transaction does not constitute a basketball supply. This used to be the standard position off the agreement under the second edition, so said it's reversed under the under the normal amended terms, the buyer promises to pay the 80 in return for beauty key invoice. There is still the option for the transaction being regarded as a transaction off a going concern on as before, you'll have to select that option if it's going to apply. I have seen some minor changes made to the special conditions where it is a transfer of a going concern. The virus obligation to comply with the conditions were met by chance free under the special provisions older for it to be a T G C. Is no longer for raised as a duty to make every effort to comply. And it's a bit more generous on the reference to an election to waive. Exemption has your latest by more modern wording of option to tax. The main thing is review your standard contract, which will issue that the eighties payable on reverse. So they assume that it will be payable unless one of the special conditions are collected. Bean Certain interesting cases where neither party has properly addressed the issue in the past, the 80 have suddenly become chargeable or has been apparent, and they both squabble over who has to pay, so deal with it at the outset. Next thing is capital allowances now staggers me personally, but this is overlooked when there's so much money at stake. And there no end of capital out consultants out there who are willing to give you their advice on whether or not Catalans acclaim Herbal on this guy by six, usually given on a contingency basis so it doesn't cost your client any money at all. Generally have the Catalan situation examined to see whether or not they could claim capital allowances. How much money we talking about? But if you read any of the materials available, the Web about the extent of capital allowances Are you talking to a Catalans expert man staggering on the average save £2 million acquisition of something like a factory or a hotel or a care home or something of that nature you're looking at? Catalans is £200,000. That equates to it could be 20%. Could be more savings. Attacks were talking about significantly more than your feet on. Of course, if it turns out that you didn't give find advice on this, they'll be looking to playing off you into a no brainer. Consultants there is just facing up to the fact that this is different and you need to think about it, and it isn't something you should just struggle. Andi, leave replies like us. Rely on your own enquiries and DPS inquired. Point out just how much money is at stake here. It could affect how much you sell the probably four, because if the body's being sold with valuable capital allowances, then it might address a tractor higher figure. Even if you aren't selling with capital allowances, you may want to ensure provision in the contract. July You to continue to claim capital answers the property after you have solved it. Some accountants will say, Oh, we can deal with this from looking at the attempt, But you can't you deal with this, probably need someone to actually visit the site, walk around it on notice things that the counters would not notice from looking at a documentation. So in a specialist area on the risk is if you don't want clients about, they don't deal with it. They are going to lose out quite significantly, having a number of changes over capital anted in recent years and that's what most of the changes to these conditions are about. Provisions relating capital allowances have been updated to reflect changes in the capital answers at 2001 that came into force in April 2014 regarding claims for cattle lances for expenditure on plant machinery. It is a fixture. Create and create general duties to support the position of the buyer who wishes to bail itself of Catalans is where this has not claimed them or has not been entitled to claim them. So standard condition, additional collision be to require to endeavor to provide relevant information until either by to substantiate claims capital allowances. It may well be the if you gets oppression advice. They suggest that there's quite considerable tinkering with, in any case, to make it more practical than affecting what actually happens in day to day practice on Capitol. Alice is so getting what all the businesses it was, it would be useful. Is it something should apply. Really? Don't miss this. The next change s d lt are for a friend. The catch here is that in May cases people are failing to charge tax on items that are consideration now as the lt's papal land. Transactions on the arguments are whether contents on goodwill are part off the consideration for the land transaction or whether the contents are a separate transaction. So there was a particular case called Osman when the cellar had said that the price included something like six or £8000 for chattels. Now this benefited the buyer. Because the transaction was 250,000 plus 8000 chattels mean 1% tax would be payable under the old slamming system. However, HMRC took first year. Tribunal proved that some of these covers excluded two shells. The shelter screwed into walls and therefore these were part of the structure. They only had to prove one times worth off. That £8000 was an item which is attached structure to mean that they can't get £5000 more tax because it would be in excess of 250,000. I would try a 3% rate. Now, this sort of nightmares don't happen now. It seems we I have removed the slamming system to a more progressive system, but it doesn't mean your obligation is to do a tax return to do attacks properly. Getting an SD lt fine is not the end end is doing a tax return and only accurately, no fraudulently and not carelessly. So you need to ask the client if there are fixtures and fittings and chattels on the degree of accession to the property and if they all screwed into the ground then or into the property or interval than any consideration payable for those chattels, you'd be added as part of the land. Transaction on this could mean that more attacks is available. Next thing, purchase of the investment property there number different issues here to consider where contents needed from reversion of whether the Riverview preceding attend transaction on where there are areas of rent under any occupational leases before we go on, Don't forget to check out the new property protocol on alienation found on www properly protocols dot co dot UK On Also there is climatic, interesting protocol or alterations as well. So a number of minor amendments to the special conditions side stand conditions where consent toe let to let sign off sub Let is needed to complete the contract. The seller is now required to give the by without delay a copy of all correspondence with the reversion in relation to the consent on condition 11 33 a has been immense to make it clear that where consent of sub letting is required by must covenant directly with the reversion er to comply with TERRENCE governments on the covers in subsidies, rather burning service existing these must use all reasonable levers. Provide guarantees of compliance that those covenants conditions. So again, more work. Both parties more consideration in cases where a required consent is not being obtained by the original completion date. This is a surprise to people used to the residential conditions you know, developed a whiz around and serve completion nurses and claim breach of contract, etcetera. The provisional 11 36 says that if either party finds that consent is obtained, completeness postponed until five working days after the several advises buyers, consent has been obtained or a clot court has declared, consent is being unreasonably withheld or four months now, the new provisions said six months. So if you haven't got a landlord's consent by the time debt stated in the contract for completion off the assignment, then you have to keep going at it, for the next six months. You can't just walk away. Maybe that your kinds feel that this kind of uncertainty is unacceptable. And there might be a significant truncating of this period, you know, then you could be argued by this clinic six months. Next point on the notes, you'll see that I actually listed the Robin Clauses. If you have a looking for three read reviews, No what we have. Often it's a situation on the purchase of an investment property where the rent review was triggered before the proposed completion date. Have the both of you will mean that the seller gets more money on the buyer, will get some more money to rent goes up. So there is a mutual interest in but some of the buyer to ensure that the rent, if you continues on, is dealt with in a pragmatic, reasonable way. So the standard conditions say that parties have on obligation to consult, cooperate with each other in relation to the rent review because obviously they're going to benefit. I thought of a second edition. This obligation ceases on actual completion. If the reviewed rent for only few payable in respect of a period which will begin after completion, so sell it has no interest in reviewed rent. In addition, condition 63 on three now says that the obligation will see supply natural completion if the rent review date for more than two years before the contractual completion date. Recognizing that the Red Refuse like to become stale, you see the provision that, too so acting for a seller the circumstances were rent review date for more than two years before contractual completion date. Make them aware that there was no impotency natural red review unless amended. What about sail off properties that are occupied by business users who are continuing their right to occupy under a statuary continuation tenancy under the before act? There's a new provision in 6.2, which applies where the seller is the landlord. Under a tenancy of the property, which is continuing under part 2 50 forints. No agreement has been reached. The data contract on the interim rent on the termination of tenancy or the terms of a new tenancy. In cases of these kinds, responsibility for the conduct of negation Intel Corp see believes will rest with the seller until actual completion, and then with the buyer, but the seller and buyer will be obliged to consult. Cooperate with each other. But all of these matters during appeared to be in contact actual completion. But as from actual completion, the obligation applies only to negotiations or proceedings affecting the amount of any red payable from a date before actual completion. So something to be aware of when you're looking at the portfolio polices you're buying whether or not you may need to need to amend this, what it will do as it stands the next point Reg Urias, now the condition of self do not contain any suggested cause. Dealing with Rent agrees. There's a useful clause you might want to look at in the common auction additions, which I'm a great panel because I think they're much better than the standard commercial conditions for tradition. And you might go and use them and plundered lots and lots of useful causes that the powers that be at the most society decided not. But in this I think it's a travesty. This was an opportunity to bring this clause upstate, but there we go, but you can go to plunder. The clause is the 1st 1 is the Venturi's position. When you are buying a freehold property subject, commercial leases my cousin investment purchase. There might be some arrears of rent by some of the tenants, and you should be aware of this before you proceed to exchange contracts. Orbit for a property at auction. Some of the leases maybe one of those old leases prior to 96 where different rules applied. Now what is to be positioned in relation to RIAS? What new and old tendencies So under new tendencies, the right to pre completion rent remains for the seller. So is the seller who is in the absence turn the off, entitled to receive a LSU for them on the old Tennessee's pre 96. The right of pre completion red arises passes rather automatically to the buyer. So it is the buyer who is entitled to receive and super them on. If it's a mix off old on new leases, then is important that these are dealt with in the same way on you have two options. Really, under the buyer, by theory, isn't takes the risk of non recovery. All this talent makes an allowance for the buyer and takes the risk of non recovery the sellers preferred interest is that the buyer will pay all accrued arrears on will quiet itself until a state. Now it's socially heard about people bidding for things with awful auctions and then discovering to their horror that in addition to the purchase price never agreed. They gotta pay a whole six or years worth of rent to the sever who has failed to collect the rent, and they find that they can't borrow the money to buy it. Why start? Make sure you understand what you're getting into so it could be. But if you have a lot of rhetoric is leading by may say, What is not my fault? Barbarism is your fault. The seller should have collected them. You need to make allowance and playing with fire. Now give a CPC toe. Make any reference. This is up to the qualities to negotiate it on. I've copied on page nine, notes that deal with that and set out cases one on too, which deal with what would happen in those circumstances. On the a portion basis. Action on that discussed with the client what position is only reason had a suitable special condition to make it clear which one of the options supply all the new leases. Specific traffic is needed because there's nothing provided by the law society, Thank you very much. The property this is changed with now has no obligation to provide the exact value of the property or who owns about the future. So you've got to check this out before you exchange contracts, really, or you will not be able to get any information from Still has identified passed Prop. Two different titles so far as it could do so. But don't forget that by can reasonably ask the seller to provide a stacked deck as such matters on his often overlooked by lies, I'm so next thing risk on insurance or a vengeance doesn't change the general position in the risk parties on central contracts. But it does have a specific clause saying that the property is at the risk of the buyer from exchange of contracts except in circumstances where this isn't appropriate, such as where it's stored by man board or the new build. So again, not much changing practice, but really on emphasis or making clear the outset what is gonna happen regarding the insurance arrangements on risk. Where the hell is going to continue higher. In most cases, both parties will continue just in case you think falls off right Next new clause nine on 91 convinced us are under a contractual duty to cooperate in regard to arrangements for completing the contract. Obviously, they would do anyway, but now we have an express clause putting obligation on them. Next point notices to complete There has been some debate over when the most complete could be served. It is clear that the butter is not going to be a complete on the completion date on whether or not you have to wait till the next day. No, this course makes it clear as soon as the time to complete this past. You can serve your completed notice requiring the focal pot deposit to be paid. Andi obviously starting time off. The essence there is also caused a CPC 10 1 a one extend the SDPC 912 toe by claimed damages. If there's a material difference to the represented descriptions off contents on the actual description value also provisioned 10 52 going on to say that the seller could resell contents if it receives contract. Also special condition. No reliance on this representation unless in writing, which is being written after the document. More visibility. So there's less chance off the court setting its sight as being in breach off contract. Next small point, to be aware are, finally, is the point about facts. You do not want to have service my fax by default or by email. You to make it absolutely clear I'm not having factors or email addresses in the contract document. That will mean that service could be dealt with by hand, etcetera, all by hand delivery or by post another important point of your serving notices by fax. Used to say that e mails, um, what's I? Email. Fax is effective one hour after the fact has been sent. E mail used to be the next day. Now it's being changed to say e mails will be deemed to receive with world within one hour off dispatch. But this is subject to rebuttal on one of the important points there at 1 35 p. Is that an automated response saying, I'm out of the office? I will not attend this tomorrow is deemed to disprove effective service. Unless obviously you can show that someone else with department has accepted service of the notice. So there you go. I hope you find that useful troll. Do go buy your own copy of the conditions. I'll make the appropriate amendments. Thank you.