Buying commercial property – A legal checklist for business owners

Buying commercial property is a major decision for any business owner, involving significant legal, financial and strategic considerations. Whether you’re expanding your premises, investing in real estate, or setting up a new business location, it’s essential to ensure that you have taken the correct advice to avoid costly mistakes. To ensure a smooth transaction, seek guidance from experienced Commercial Property Solicitors, like our team here at Fosters, who can support you every step of the way.

This legal checklist will help business owners understand the core aspects of buying commercial property in England and Wales and give you guidance as to the considerations you may wish to bear in mind.

Understanding commercial property types

Before committing to purchasing a commercial property, you should give consideration to the different commercial property types, and decide which would be best suited to your needs and future plans:

• Office buildings – single or multi-tenanted spaces for corporate use.
• Retail premises – shops, showrooms, and high-street units.
• Industrial units – warehouses, factories and manufacturing sites.
• Mixed-use properties – buildings combining residential and commercial purposes.

Each type carries different planning, tax and use considerations, all of which must be assessed before purchase.

Planning permission

Understanding the property’s permitted use is vital. You must check whether your intended business activity is allowed under current planning classifications, by:

• Reviewing existing planning permissions and use classes.
• Identifying whether a change of use application is required.
• Investigating if the property is subject to any development restrictions.

You can find further guidance on use classes at the UK Government planning portal. You may wish to seek pre-planning advice from the Local Authority to ensure that your intended use will be permitted.

Environmental and structural due diligence

As the buyer, it’s strongly recommended that you commission surveys, searches and inspections to assess the physical condition of the property and associated risks:

• Environmental searches – check for contamination, flooding risk, and compliance with environmental regulations.
• Building survey – evaluate the physical condition, structural integrity and any potential maintenance liabilities.
• Asbestos reports – identify any presence of asbestos, which imposes management obligations on the owner.

These findings can help you to renegotiate the purchase price or request remediation by the seller before completion.

Finance and tax implications

Understanding the financial structure of the deal is critical. Key tax and finance points include:

• Stamp Duty Land Tax (SDLT) – applies to most commercial property purchases over £150,000 in England. Calculate this cost early.
• VAT – check whether the seller has opted to tax the property. If so, VAT may apply on top of the purchase price.
• Capital allowances – identify any available allowances that may be claimed for plant and machinery fixtures.

Work with both your solicitor and accountant/financial advisor to ensure all tax implications are understood and planned for.

The legal process

Title and ownership checks

To ensure a smooth transaction, seek guidance from experienced Commercial Property Solicitors who can support you every step of the way once you have decided to proceed with your purchase. One of the most important steps when buying commercial property is verifying legal ownership and ensuring that you will obtain a good and marketable title to the property. Our Commercial Property team will assist by:

1. Reviewing the title register, plan and associated documents forming part of the title to the property.
2. In the first instance confirming to you whether the property is freehold or leasehold in order that you can decide how to proceed. Leasehold properties come with their own considerations, and this would something you would need to factor into your decision as to how to proceed, depending on your plans for the future and whether a leasehold property would be appropriate for those needs.
3.  Checking for any restrictions, charges, or covenants affecting the property and dealing with those appropriately.

A solicitor will carry out these due diligence checks, alert you to any legal issues and provide advice as to how to navigate those issues prior to you committing to the purchase.

Drafting and reviewing the sale contract

The sale agreement is central to the transaction and must accurately reflect all negotiated terms, including:

1. Purchase price and payment terms.
2. Title guarantees.
3. Completion date and conditions.

Your solicitor will draft or review this document, and may negotiate amendments based on due diligence findings.

Exchange, completion, and registration

The next legal steps in buying commercial property, once the due diligence has been concluded, are:

1. Exchange of contracts – both parties sign and agree to complete the deal.
2. Completion – the balance of the purchase price is paid and ownership transfers.
3. Registration – your solicitor will register the property in your name with HM Land Registry.

Case scenario

Imagine a company purchasing a property with specific plans in mind, for example a warehouse necessitating deliveries at all hours. Due diligence may reveal restrictive covenants limiting delivery hours, and prohibiting excess noise. Legal advisors can bear their client’s intended use in mind and note specific issues that may have a direct impact on the client’s proposed plans.

In this instance, it would therefore be best to negotiate a deed of variation with the seller to permit 24-hour operations. Without legal assistance, it may not be obvious to a layperson that this restriction may affect or prohibit their plans. Therefore, to avoid pitfalls or delays we strongly recommend that you instruct solicitors to handle the due diligence process and deal with any pertinent matters which arise in order to facilitate the acquisition.

Delays at any stage can incur costs, so having clear communication between all parties is key.

Expert Insights

Commercial property solicitors recommend:

• Start legal checks as early as possible to avoid last-minute delays.
• Always instruct a solicitor who specialises in commercial property law.
• Don’t rely on seller representations – verify everything independently.
• Check any third-party consents (e.g. landlord, planning authority) are in place before completion.

Our Commercial Property Solicitors provide comprehensive advice in relation to buying and selling business premises.

We act for organisations of all sizes, from a sole trader looking to move to larger premises, to large companies or partnerships wanting to dispose of their property portfolio.

Contact us for more information.

Benefits and challenges

• Benefits:
  • Control over your premises and operations.
  • Potential long-term capital growth.
  • Ability to sub-let or adapt the space.
• Challenges:
  • Complex legal and tax issues.
  • Responsibility for repairs, maintenance and compliance.
  • Upfront costs including SDLT, surveys and legal fees.

FAQs

What legal documents are often needed when buying commercial property?

• Title register and plan and any other documents forming part of the title to the property.
• Contract for sale.
• Transfer document to effect the transfer of the title to the property.
• Planning and building regulation certificates.
• Lease agreements.
• Searches.

What are the steps in buying commercial property?

1. Locate a property.
2. Secure financing (if applicable).
3. Engage a solicitor to conduct due diligence.
4. Commission a survey to ascertain the position regarding the structural condition of the property.
5. Sign the relevant documentation.
6. Complete the transaction and register ownership at HM Land Registry.

Do I pay VAT when buying commercial property?

VAT may be payable if the seller has opted to tax the property. Your solicitor can check and confirm the position before completion.

How long does the commercial property buying process take?

Depending on third party requirements e.g. financing, the seller, the seller’s solicitors and so on, complexity and any issues discovered during due diligence, it typically takes 8 to 12 weeks to achieve completion (starting from the date the buyer’s solicitors received the full draft contract pack from the seller’s solicitors).

This article was produced on the 9th September 2025 for information purposes only and should not be construed or relied upon as specific legal advice.