Continuing on from our latest series of articles on legal support for both Landlords and Tenants, we spoke to our resident experts, Karen Piontek and Paul Magee about Acquisitions and Disposals of commercial property.
As Prosperity Law’s Head of Commercial Real Estate, Karen represents a variety of commercial clients across all aspects of property law, focusing on the proactive protection of her clients’ properties, portfolios, and rights.
Paul Magee is Prosperity Law’s Head of Dispute Resolution for Commercial Property and Contested Probate. Our in-house expert when it comes to litigation for property cases – Paul steps in for Prosperity’s property clients in the case of contentious disputes.
Between both Karen, Paul, and the wider Real Estate team we can represent property clients across the full suite of legal services, from proactive commercial focused provisions through to dispute resolution. Here’s what they had to say about the intricacies surrounding the purchase and sale of property.
Due diligence
When it comes to buying and selling property – your legal team has an array of responsibilities. And one of these is due diligence. A simple definition of due diligence is that it’s a comprehensive series of investigations and analyses conducted before entering into a transaction. But why is it so crucial? For both parties involved in a property sale, it’s about uncovering any hidden risks, liabilities, or defects that might impact the property’s value or intended use. For buyers, it’s a safeguard against unexpected surprises post-purchase. For sellers, it’s a proactive measure that mitigates potential liabilities and ensures compliance with legal obligations.
If you’re a commercial property owner or developer who is appointing a law firm to carry out due diligence on your behalf – you need to appreciate that not all law firms will provide an equal service. Actions might include scrutinising title deeds, survey reports, planning permissions, environmental assessments, lease agreements (where applicable) and any ongoing disputes or encumbrances that might affect the property.
To effectively protect yourself in the transaction, you need to be confident that the firm representing you knows what to look for; understands the intricacies surrounding property law; is aware of your risk profile and commercial needs and can be trusted to go into even the smallest details to ensure you’re covered. Where conveyancing focuses largely on the transaction, commercial property solicitors operate with commerciality in mind. So, in short, ensure you appoint an experienced, specialised professional.
Karen said:
“As a Partner in the Real Estate legal sector, we come across a number of legal professionals who represent the other side of deals. And sometimes it can quickly become apparent when that representative doesn’t have commercial property technical experience.. From using templated contracts to lack of understanding of the due process and procedure – the entire transaction can be drawn out, and more complicated. Whilst you might pay a higher fee for a specialist in commercial property, the efficiency and time saved might actually be more cost-effective across the whole course of the transaction.
The other thing to consider when appointing a firm for your commercial property transaction is to look at the wider team and the specialisms therein. For example, Paul’s experience as a litigator can bring a unique perspective to more contentious cases, and through his advice we can attempt to divert clients away from costly and stressful litigation wherever possible. The depth and breadth of a property team matters when it comes to providing an efficient and high-quality service.”
Karen Piontek, Partner and Head of Commercial Real Estate
Common missteps
The vast majority of missteps in property transactions can be prevented with comprehensive due diligence. But where something has been missed, the ramifications can often be sizeable and costly. Whether it’s missing something vital in the title deeds or failing to pick up on something unusual in the survey – it’s a minefield of potential pitfalls, some which might not rear their head until years later. Inadequate due diligence can lead to future litigation, disputes, and financial loss.
Improper documentation is a common misstep, whether it’s incomplete contracts, ambiguous clauses, or the absence of clear, legally binding agreements. Similarly, disregarding or being ignorant of regulatory requirements, or local planning regulations can also land you in trouble – especially if your transaction involves an expanse of land. And with the ever-increasing amount of environmental law coming into practice, there’s an added layer of compliance that’s required of many property owners.
All of the above missteps can be solved by being proactive. Ensuring you’re aware of the issues in the first instance and, with the support of your solicitor, deal with them accordingly and you can complete the transaction with confidence and peace of mind. Paul said:
“As a litigator, clients usually get in touch with me after a misstep has occurred. And let’s face it these things happen – hindsight, is a wonderful thing.
Where clients foresee a potential problem, my role is to try and divert them from that issue and provide a solution. And having a full understanding of every step of the litigation procedure, if caught in a dispute, is helpful in that instance.
Where I’m consulted after an issue arises, then my job is to mitigate any potential losses through a defense or bringing an action against someone – but in these instances there’s rarely an opportunity to solve the problem at hand, without some form of legal action.”
Paul Magee, Partner and Head of Dispute Resolution
Boundary disputes and easements
There’s nothing quite like an ambiguous boundary to set neighbours against one another. Boundary disputes arise when neighbouring property owners disagree over the precise location of their shared boundary line. Easements, intrinsically linked to the former, refer to the legal right of one party to use another party’s property for a specific purpose, such as accessing utilities or crossing a pathway.
When faced with a boundary dispute, property owners and developers have several avenues for resolution. Firstly, they can attempt to negotiate a mutually acceptable boundary line through mediation. Alternatively, seeking clarification from a licensed surveyor or solicitor can help resolve ambiguities and provide an objective assessment of the boundary’s location.
If both of those options fail, then court proceedings can be raised to resolve the issues at hand.
In cases involving easements, property owners should carefully review their title deeds and relevant legal documentation to determine the extent and scope of any existing easements. But seeking legal advice is the most effective way to clarify rights and obligations associated with easements and facilitate negotiations between parties.
Paul commented:
“When aiding clients with boundary disputes and particularly easements, the history of the property’s ownership can be just as important as the deeds. Quite often it’s not as simple as where the boundary is, as detailed by the deeds or a survey, but also how the disputed land and rights have been used, and for what length of time.
Unfortunately, these are the sorts of cases where relationships between neighbouring land and property owners can really break down, leading to unhelpful behaviour like harassment which then adds another layer of complexity to the case.
Court proceedings for boundary disputes can be lengthy and rack up costs quickly for all parties involved. Here, the aim should be to resolve issues with mediation, as quickly and as effectively as possible. And this is where it really helps to have an experienced litigator that specialises in property on your side.”
Paul Magee, Partner and Head of Dispute Resolution
The message of this series of articles is: proactivity. A thorough and proactive approach to any property acquisition or disposal, with the support from the right legal team, can save an abundance of effort, stress, and money, long-term.
For a free and confidential 30-minute discussion with our specialist teams please get in touch with Karren in commercial real estate on karen.piontek@prosperitylaw.com or in property litigation, Paul on paul.magee@prosperitylaw.com.
