Commercial Property – How different is it to Residential Property?

Commercial conveyancing requires expert knowledge in a wide range of areas and differs significantly from the legal work required in residential conveyancing matters. Let us briefly explain how.

Firstly, a different set of contract terms are used, known as the Standard Commercial Property Conditions (SCPC Third Edition). A few of the key contractual differences to note are that the insurance risk passes at the point of completion unlike the Standard Conditions of Sale used in residential transactions, where the risk passes on exchange of contracts, and matters such as capital allowances and VAT (which are not relevant to residential transactions), need to be considered at an early stage.

Secondly, unlike a residential sale or purchase, the structure of the transaction should be given careful consideration to ensure the matter is as tax efficient as possible. For example, it may be an option to acquire shares rather than the property itself, providing a significant Stamp Duty Land Tax saving. Also, commercial property may be opted to tax meaning that VAT is payable on the purchase price. In certain situations, the contract can be drafted to include wording which makes the transaction zero rated for VAT purposes, this is known as a transfer of a going concern.

Thirdly, the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 established the new Minimum Energy Efficiency Standards (MEES) in the residential and commercial private rented sector. There are a number of differences between the regulations when it comes to commercial and residential matters, meaning that commercial parties need to be extra careful when
negotiating contractual documents. A commercial property which falls below the MEES could be costly, and the regulations should be given consideration at early stages.

Finally, when acting for a commercial client, knowledge of the business is critical. For example, if acting for a Pension Fund understanding the requirements of the corporate trustee is key, as often specialist drafting is required. There are many subtleties to be considered and it is vital that the lawyer has an in-depth knowledge of the client, as well as the legal skills and expertise to deliver results.

At O’Donnell Solicitors our Commercial Property Team, comprises experts in this field. We are equipped to handle the most complex Commercial Property transaction. Acting on behalf of lenders, individuals and corporate clients alike, we offer Straight Talking Advice whilst at the same time having a keen eye for detail. Working with other leading professionals we are able to facilitate the quick progress of a deal to help deliver the goal of the parties involved.

Recognised as a leading firm in the North West and one to watch, O’Donnell Solicitors offer straight talking Legal Services from modern offices in Saddleworth, East Manchester.

To access our Commercial Property services please contact James O’Donnell or Katrina Fox at our head office at Appleby’s Business Centre, 1-3 Mossley ​Road, Saddleworth, Grasscroft on 01457 761 320 or email James O’Donnell at or