Commercial Property Investments
Investing in commercial property can have many advantages over other types of investment for both owner occupiers and investors who are landlords. The owner occupier will benefit from building up equity instead of paying rent to a landlord. The landlord who secures a good tenant will in the long term seek a rise in the value of his or her investment. Both may avail of tax advantages. However no investment is without risk. We have handled many commercial transactions over the past thirty years and can offer valuable advice on how to save time and money. Download our ‘Step by Step Guide’ to property purchase in Ireland for a better understanding of the process from the time you agree a price up to the closing date when title is transferred to you.
Some useful tips for the unwary:
- In Ireland the principle of ‘Caveat Emptor’ applys to all property transactions which means the buyer must be aware and takes the property in its condition as viewed when sold.
- Estate Agents usually preclude buyers from relying on statements made during negotiations and will even preclude reliance on descriptions of the property contained in their brochures. This means that careful searches and examination of title should be undertaken before signing of contracts.
- Surveys should be carried out by competent suitably qualified persons who should carry professional indemnity insurance so you are protected if anything important is overlooked. The seller is not obliged to disclose latent defects.
- Commercial property should be carefully measured before purchase to verify the measurements in the agent literature as it is frequently found to be incorrect. Remember the lettable floor area dictates the amount of rent that may be charged to a prospective tenant which in turn has a bearing on the value of the investment.
- A written loan offer should be available before signing contracts and should be reviewed with the acting solicitor to ensure that any preconditions stipulated by the lender can be satisfied. It may also be prudent to defer signing until all conditions of the loan offer are satisfied. This removes any risk to the purchaser about the availability of funds when required for closing the deal.
- It is essential to carry out a planning search in the Local Authority planning office to determine if the property is likely to be affected by any proposals such as road widening, mobile phone transmission mast, industrial development, local authority waste disposal site etc, all of which would diminish the resale value.
- The level of compliance of the property with Health Safety and Welfare at Work obligations must also be taken into account and the planning permissions relating to the building must be reviewed to see if there are restrictions imposed on an occupier.
Costs and other outlays.
The following fees and outlay will arise on a commercial property purchase:
- Surveyor – this can range between €500.00 up to €5,000.00 depending on the size of the building and value of the transaction and the complexity of the issues that arise.
- Solicitor - sometimes a percentage is quoted however most will agree a fixed fee.
- Property Registration Authority – up to €650.00 depending on purchase price.
- Search fees – usually around €250.00 to search against title, planning and vendor.
- Stamp Duty – currently (since December 2011) 2% of purchase price.
- Business Rates and Water Rates are payable annually.
- Service Charge if the property is part of a privately managed development.
- Insurance against fire, flooding, loss of rent and other standard risks.
- Mortgage protection policy to pay the outstanding balance on the loan in the event of death of the borrower.
So why not get a no obligation fixed fee quote now. You could save a lot of money. If you have questions, why not call or email us now without obligation and we will be happy to answer your queries without charge.
No solicitor/client relationship or duty of care or liability of any nature shall exist or be deemed to exist between O’Shea Legal and you until you have received confirmation in writing from us in which we confirm our appointment as your Solicitors.
*In contentious business a solicitor may not calculate fees or other charges as a percentage or proportion of any award or settlement.
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