Working with lenders to purchase a commerical property

Purchasing commercial property is rarely a straightforward transaction. Whether it involves a substantial industrial site, a shop, mill, industrial units or any other commercial premises, the process is often intricate and requires careful planning.

Commercial property lenders

When lender funding is involved, early coordination becomes essential between the buyer, seller, valuers, managing agents, the lender and, where separate, the lender’s solicitors.

In many transactions, the buyer’s solicitor will act for both the borrower and the lender. This is permitted provided there is no conflict of interest and the lender’s panel requirements are satisfied.
With years of experience across our commercial property team, we are well-versed in navigating the complexities of these transactions and ensuring that progress is as smooth as possible.

Ayla Hewitt, who is building her career within our commercial property team, is often the first point of contact for clients. She works closely with our senior commercial property solicitors to help clients secure the best possible outcome.

“Lenders provide a framework of enquiries and requirements at the outset. By highlighting potential issues early on, we can be more efficient and protect the client’s interests,” said Legal Assitant, Ayla Hewitt.

“Although working with a lender can feel more detailed and time-consuming compared to a cash purchase, the added structure gives clients greater protection. It provides confidence that the property offers adequate security for the loan and that there are no issues that could affect the value or marketability of the property.”

Independent enquiries

Alongside the lender’s requirements, our commercial property team raises its own independent commerical property enquiries with the seller. These may cover matters outside the lender’s scope, which could impact the property’s long-term use or value.

“This dual layer of investigation ensures clients receive both financial protection and practical reassurance,” Ayla added.

As part of her role, Ayla undertakes full title investigation and due diligence, including:

• Confirming good and marketable title
• Reporting on issues affecting value or marketability
• Ensuring the lender’s charge is properly registered
• Certifying compliance with the lender’s specific instructions

If a conflict of interest arises at any stage, the commerical property solicitor may need to cease acting for one or both parties. Should this occur, clients will be informed immediately.

“It may seem a world of legal jargon, but my aim is to explain everything clearly,  from title structure to covenants and easements. Lenders expect confirmation that the title is good and marketable, subject only to acceptable matters,” said Ayla.

Commerical Property Standard Enquiries (CPSEs)

Lenders usually require a full suite of commercial property searches, and depending on the property type, additional searches such as environmental, mining or flood-risk reports.

Commercial Property Standard Enquiries (CPSEs) are raised with the seller’s solicitors, and all replies must be reviewed carefully, particularly where lender confirmation is required that no material adverse issues affect the property.

Certificate of Title

Before funds can be released, the solicitor must provide a Certificate of Title confirming:

• The title is good and marketable
• Searches are clear (or disclosed)
• All lender conditions have been met
• The lender’s security will rank appropriately

Lenders will not release funds without this certification.

“Completion day is always rewarding, but the work continues afterwards. We handle all post-completion formalities including SDLT submissions, registration at HM Land Registry and Companies House, and update the lender once everything is finalised.” added Ayla

How can we help?

While lender involvement adds an extra layer of complexity, with the right legal team supporting you, a commercial property purchase can still proceed smoothly and efficiently.

Speak with our specialist commerical property solicitors about your commerical property transaction, including:

• Property portfolio acquisitions and sales
• Purchasing development sites for commercial use
• Industrial or residential development land
• Retail premises
• Brownfield sites (including former petrol stations)

For legal advice on purchasing or selling a commercial property, contact our expert commerical property solicitors on 0161 785 3500 or email enquiries@pearsonlegal.co.uk.

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Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.