Selling your pharmacy | Overcoming property issues
30 October 2020
There are two property decisions to make when selling your pharmacy if you own the freehold of the property. Do you want to retain the property and benefit from the rental income and user this as part of your pension pot or do you want to sell on the freehold to the new owner. A conversation with your tax advisor or accountant may help you decide.
If you wish to retain the freehold this may favour some first time buyers as they have to find less money to complete the purchase. However, many people complete purchases and then make arrangements to sell on the freehold and take a lease for themselves, known a s a “sale and leaseback”. On the other hand, some purchasers would prefer to acquire the freehold and own the building as an asset within the business.
You will need to obtain an up to date freehold value of your property and have ready any certificates such as an Energy Performance Certificate (EPC) and an asbestos survey and also supply information on rates payable.
You will need to provide insurance for the whole building and generally you will be liable for all external repairs (other than glazing). The buyer will insure the contents and glazing.
If you are creating a new lease for the buyer your lawyer will be able to advise you. Key issues to include in the new lease are things such as sub-letting permissions, structural alterations, signage permissions and clauses that will ensure a return of a good standard of property back to you at the end of the lease term.
Normally a valuation takes place by the buyers lender so you will need to provide access for this.
If you are the leaseholder usually this can be assigned to the new owner. Sometimes this can be an issue if the buyer is seen as a non-secure tenant. In these cases, sometimes a personal guarantee may be requested by the Landlord.
A copy of the lease will need to be provided to the buyers lawyers.
If the lease has less than 5 years to run your buyers lender will usually request that an extension (or new lease) is obtained, as most lenders will require 10 years of the lease remaining to cover the term of the loan. In this scenario you will need to accept your Landlord will be made aware you are selling your business and it may get out into the public domain. It’s far easier if you approach the Landlord and secure an extension before the selling process starts.
You will still ned to make available any certificates such as an Energy Performance Certificate (EPC) and an asbestos survey along with information on rates payable.
As always, your lawyer will be well versed in all these issues and will be able to advise you and help you through the process.
Work with the pharmacy specialists
All of this may seem like a lot of work but Pharmacy Seekers can assist you with many of these tasks. You will want the best price for your pharmacy and preparation is the key to promoting and subsequently selling your pharmacy.