Welcome to Series 4, Episode 6 of the Moorcrofts Means Business Podcast!

In this episode, Corporate Partner Will Pearce and Commercial Property Associate Sharan Uppal discuss the role of property due diligence in a business sale, exploring what buyers and sellers need to consider and how businesses can prepare their property affairs well in advance of a transaction.

Property can be a significant part of any corporate transaction, whether a business operates from a single leased premises, has multiple properties across the country or overseas or holds freehold investment properties. Effective property due diligence helps buyers understand the property interests and obligations connected with the business, identify potential liabilities and assess whether the existing property arrangements fit with their plans for the business following completion. This may include continuing to operate from existing premises, renegotiating or exiting leases, relocating the business, or deciding that particular properties are not required as part of the acquisition. For sellers, early preparation can help identify and resolve potential issues, reduce delays and protect the value of the transaction.

In this episode they discuss key questions including:

• Why property due diligence is an important part of a corporate transaction, and the different considerations for buyers and sellers when reviewing property interests.
• The key property documentation required during due diligence, including titles, leases, licences, guarantees, rent deposits, side letters and commercial property standard enquiries (CPSCs).
• Property compliance requirements, including fire risk assessments, electrical reports, gas safety records and asbestos surveys, and why keeping these documents organised and up to date is important.
• The key terms buyers and their lawyers focus on when reviewing leases, including lease length, break rights, rent reviews and alienation provisions.
• Common property issues that can arise during due diligence, including rent review liabilities, onerous break conditions, unauthorised alterations or subletting, and property condition issues.
• How property issues can be addressed before completion, including landlord consents, deeds of variation, retrospective consents and legal indemnity policies.
• How buyers and sellers can take a commercial approach to allocating risk where a property issue cannot be fully resolved before completion.
• How businesses can prepare for a future sale, including reviewing and organising their property affairs and documentation well in advance to help identify potential issues and avoid unnecessary delays during a transaction.

Tune in to gain practical insight into the property aspects of due diligence and how early preparation, good organisation and legal advice can help businesses identify potential issues, minimise delays and support a smoother and more successful sale process.