You are ready to exchange contracts with the person selling the commercial property when:
Until contracts have been exchanged, the vendor can opt to sell to another interested party, unless a lockout agreement has been entered into.
This law is different in Scotland where a lockout agreement is not required. There isn’t a legal contract between two parties, meaning until the contract has been concluded, either party can walk away from the deal without any penalty.
If you are paying a deposit, this is required at this stage. The deposit is usually ten percent of the purchase price but can be varied, subject to prior agreement. This will be documented in the HOTS.
Completion typically follows a month later but can be varied prior to exchange of contracts and will be clearly set out in the HOTS. This is when you pay the remaining balance and the contract is complete.
Congratulations, you have completed the purchase and have now become the owner of the commercial property. But remember, prior to the exchange and completion, you should ensure you have adequate insurance in place. This will be a requirement of the lender, if you are raising finance towards the purchase price.
Following completion, you are required to:
Buying a Commercial Property – Undertaking Local Searches