Q: I own a local business and my pension fund owns the property in which it operates. Due to rising costs, fewer orders, and also my age, I have decided to downsize the business this year. I am wondering whether, with this in mind, it would be feasible to split the unit into two separate units. Then I could move my business into one unit and sell off the other. What would be the main considerations if I did this?
A: Selling off part of your premises could be a good way of releasing some of your asset whilst retaining part of the property for your business and still having the possibility of further disposal or rental in the future if you decide to retire. However, aside from the building regulation and planning permission approval implications of dividing the property, there are a lot of other things to consider too.
For example, each part of the property will need all the necessary utilities to operate autonomously. This may involve granting rights of drainage from the retained property to the new unit. The new unit may also require rights of way to be granted in order for the buyer to egress over your retained property.
If you intend to sell land with the new unit, will your buyer want to know if they can obtain planning consent to develop the land before they complete the purchase? In these circumstances a conditional contract may be requested from the buyer. Conditional contracts are relatively common, but they do require more complex drafting than a straightforward sale.
Time spent thinking everything through with your solicitor before you make any decisions will be beneficial, as there may be legal and other implications you have not thought of.
This question has been answered by Molly Drake, a Solicitor with GHP Legal. If you would like to speak to someone about this or any other legal matter, please visit our website www.ghplegal.com and use the contact us form, or call us on: Wrexham 01978 291456, Llangollen 01978 860313, Oswestry 01691 659194