Tips on acquiring a business property
A purchaser may be involved in either a freehold acquisition or a lease of land or buildings and infrastructure. Using a solicitor to assist you with a purchase or lease agreement is essential and especially one who has experience of waste management properties. Chris Lockwood explains.
Chris Lockwood Director and national head minerals, waste management & energy, GVA
HERE ARE numerous things to consider with an acquisition. Firstly, is the site contaminated? Usually youwill have the benefit
of a stage 1 environmental appraisal or, if difficulties have existed, a stage II intrusive site investigation. If you rely on any of these reports you must
transfer warranties so that you can rely on them in future or assign them to a future purchaser. These reports will also comment upon historic mine-working/shafts and flooding.
What are the planning and Environment Agency (EA) implications? Planning permission for a waste management use will have conditions that may restrict vehicle movements, working hours, noise levels outside storage of waste, height of stockpiles and other issues together with lorry routing. There may also be a Section 106 Agreement
with legal or financial obligations on aspects outside or beyond the property. It is important to know whether the site is compliant with the planning conditions and discussions with the planning authority need to be undertaken. Similarly, an EA permit is needed to operate
together with conditions which are monitored. Each EA inspection incorporates a checklist
and it is important that the recent visits are inspected in order you can understand any problems or works/rectification and cost that may be required. If in doubt telephone the EA officer to discuss.
Are there specific access and maintenance obligations? Rights of access and maintenance clauses for repairs are also important if you have a shared access to the property. Boundaries and fencing are essential obligations to maintain and need to be considered together with any rights of light which may affect a boundary or an adjacent occupier. Waste management properties require high
quality surfacing and drainage to interceptors and it is important that these are inspected and are adequate for the site. Similarly buildings, push walls, office accommodation and car
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For leasehold properties negotiations need to refl ect open market rent, rent review clauses and rent free periods
parking are all important, especially the condition thereof. Warranties for construction should also be
assigned if possible.
Do they require capital expenditure or if it is a leasehold property are there dilapidations, you need to provide for in your accounts? Before a lease is signed a specification for the property needs to be agreed, especially if it is a full repairing and issuing lease. Any title investigations must take account
of restrictive covenants for the use of the land and potentially any overage clauses which may, if planning permission is amended, require additional payments to the benefactor of the restrictive covenant. Enquiries of the Land Registry for a small fee can, if the property is registered, enable you to look at the title and covenants affecting the property.
What should you check when entering a lease? For leasehold properties negotiations need to reflect open market rent, rent review clauses, rent free periods and break clauses. In today’smarket rent-free periods are the
norm as are break clauses should an operation not meet projected expectations. Premiums are also payable on some rents
and capital purchases to reflect the difficulty of obtaining planning permission for waste management and recycling uses. Specialist advice is therefore required from those familiar
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with the acquisition and disposal of these types of properties in order that you are paying market rent or market value for the asset. If you are using the freehold land and buildings as security for bank funding it is helpful if the bank has a specialist team for the waste sector.
What level of business rates will be charged? Business rates on waste management properties are applicable and it is important that you consider these in any business plan. You can explore the Valuation Office website
in order to look at whether historic appeals have been lodged and savings generated on the property. Business rates are a major cost and should the property become vacant then although six months relief can be secured if the property is totally vacant, business rates are payable in full beyond this period.
Bring in the experts
IT IS important therefore that the use of a chartered mineral or waste surveyor is used in any acquisition of waste management assets in order that proper and specialist advice is obtained. GVA have extensive experience on all aspects of site acquisitions, disposals of land and businesses and would be pleased to assist any waste management operator in this field. Contact Chris Lockwood on 0207 911 2884 or email him at email@example.com
Recycling & WA S T E W O R L D
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