Shayne Foley reviews the new code of practice for streamlining commercial property transactions from the Investment Property Forum.
In today’s challenging commercial property market, it is more important than ever for sellers to prepare their properties for a smooth sale at the earliest possible stage of the transaction.
The Investment Property Forum (IPF) has recently updated its guidance (first issued in 1996) with the objective of re-establishing property as an attractive asset class.
The publication is called "Readiness for Sale – the Code of Practice for Streamlining Commercial Property Transactions" and its recommendations are aimed at speeding up commercial property transactions.
The IPF Code provides advice from all parties’ perspectives and contains:
- information designed to prepare a comprehensive set of documents for a smooth sale;
- a “readiness for sale” checklist; and
- a list of topics for inclusion in heads of terms discussions for asset and corporate transactions.
Commercial property transactions generally take longer in tough markets. However, with good planning these delays can be minimised by sellers and their advisors. For example, at the very outset issues such as title defects, missing deeds and adverse rights should be addressed.
The seller should also factor in any financing arrangements. For example, are there any early-repayment penalties that would influence a decision to sell?
Before marketing the property, the seller and their advisors should familiarise themselves with the property and its title. This will help to ensure that the property and legal pack are comprehensive and professionally presented to avoid price and other commercial renegotiations.
Granting bidders access to electronic data sites (or deal rooms) can be a useful time-saving tool adapted to suit all parties’ requirements. Access can be tracked to gauge the progress in the transaction at all stages. It can be particularly useful for multi-jurisdictional transactions.
Commercial property lawyer, Shayne Foley, recommends the new guidelines to anyone considering the sale of property assets as a practical guide to avoiding unwelcome delays and unnecessary expense.
This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.