How to navigate commercial property transactions in Northern Ireland?
When it comes to selling commercial property in Northern Ireland, one of the first tasks is to make sure the title to the property is in order.
This will help keep your transaction on track, allowing you and the buyer to proceed with confidence. Ideally, a bit of vendor due diligence should be done before putting the property on the market to make sure potential issues are identified in advance and the sale process is swift.
Wilson Nesbitt Real Estate Solicitor Izabela Treacy answers clients’ frequently asked questions and offers her guidance on common issues affecting the transaction process;
What information is contained in the title to commercial property?
Title to a commercial property shows:
- who is the current registered owner of the land,
- whether there are any charges affecting the land,
- what class of title the land is registered with, and
- if it is subject to any leases, sub-leases and registered rights.
Where is all the title information held?
Titles to registered land are held at the Land Registry or Registry of Deeds in Northern Ireland and your Solicitor can check title information online and request relevant documents for you fairly quickly. They will also be able to review the available information and spot any title issues that might affect your transaction.
Do title deeds prove ownership?
Yes, title deeds are documents which prove the ownership of the land. However, if the land is registered at the Land Registry it is important that the title being reviewed has been updated and that there are no pending applications. If the land is registered at the Registry of Deeds (also often referred to as unregistered land) it is important to carry out a Registry of Deeds search to ensure that ownership has not changed since the last instrument was registered.
Do the title deeds confirm the exact property boundaries?
Not always and all too often a seller is not aware of the exact property boundaries. The purchaser should always inspect the property to make sure that the legal boundaries of the property reflect the position on the ground.
Can I sell a commercial property without title?
Selling a commercial property without title would be difficult, but not impossible.
The longer the seller has owned the property, the higher the chance of the sale completing successfully. If the original title has been lost, memorials of the missing documents and an updated search would have to be obtained from the Registry of Deeds.
The purchaser would also require a detailed statutory declaration and a title indemnity insurance policy to cover any risks associated with lack of title guarantee. A sale without title might not be acceptable to some Lenders, therefore a sale to a cash purchaser could be easier but the purchaser should be careful as this may affect onward sales
What other information do I need?
In addition to title information, if the property is let, you will need copies of all leases and to provide all management information. This will confirm to the buyer the revenue streams and both net and gross yields. On top of this, replies to CPSE will be required which detail the informal day to day management of the property and will include the fire risk assessment, asbestos survey and VAT status. Copies of the planning history together with searches will also be required.
Who will pay the cost of transferring the title?
Fees for transfer of title are usually payable by the person that is being registered as the new registered owner of the land/property.
How many months does it take to transfer and register title at the Land Registry?
It is difficult to estimate how long it can take, as each case is different.
A disposal of land on average can take from 8 to 12 weeks, but the timeframe could be shorter if the transaction is straightforward- or longer if any issues arise during the process.
The speed of registration of the new ownership, after the transaction has completed, varies depending on complexity of the registration application and Land Registry’s workload and capacity at the time.
What happens if the Land Registry is wrong?
If the Land Registry’s records are incorrect they can be amended, but how this is undertaken depends on the reason why they were recorded incorrectly in the first place.
If it was due to the Land Registry’s error, then a request should be made asking them to make any necessary amendments to the record. If the incorrect information was provided to the Land Registry during first or any subsequent registration applications, the lodging Solicitor should be able to lodge a rectification application at the Land Registry.
Sometimes additional documents might need to be signed by all involved parties, to have the existing documents varied in order to amend the records.
What happens if a property is not registered with the Land Registry?
Any land or property not registered with the Land Registry will be registered in the Registry of Deeds. This is an older form of NI register which was used before the Land Registry was established.
In Northern Ireland there are still a lot of properties which are registered in the Registry of Deeds, but this number is decreasing as time goes on.
This is due to the obligation to first register any land or property that was sold or transferred at a certain value at the Land Registry. There are some transactions which are exempt from this obligation.
Is there a register for commercial property leases in NI?
All leases (in either registered or unregistered land) that last for a duration of over 21 years must be registered with the Land Registry.
What documents provide details of Rights of Way benefiting my property?
Rights of Way affecting the property would be described in the document that created them. This can be for example a transfer, lease, conveyance, an assignment or a grant of easement.
Why should I undertake vendor due diligence?
The speed at which a transaction of commercial property in Northern Ireland can be completed is one of the most frustrating aspects for both buyers and sellers.
By having your solicitor review the title and all leases and request searches and ancillary information in preparation for sale the disposal process can be cut in half.
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Our Real Estate team acts for a broad portfolio of Developers, Investors and Construction companies across Northern Ireland. We offer joined up, holistic legal advice on strategic and practical issues affecting commercial projects full asset lifecycle.