The COVID-19 pandemic has led to a testing time for the property and lending industry and one of Strettons Registered Property Receivers, Paul Joseph has set out a few thoughts.
Acquiring commercial sites to convert to residential use is proving an increasingly popular strategy among property developers. Here Strettons look at how to avoid the common pitfalls.
We recently had an instance over the sale of a Grade I Listed fire damaged mansion in Cheshire where the borrower sought to obtain an injunction restraining us from selling. Agreements were reached to delay a sale but we are reminded of a similar attempted injunction against us in 2017 where a London judge said to the borrower:
There has been continuous media coverage surrounding the lack of available housing and the need to build more houses, which has significantly increased pressure on local councils to find new homes. They are increasingly needing to be more creative in accommodating residents at affordable levels.
Over the past 30 years, Strettons have advised numerous charities how best to dispose of a variety of properties including schools, churches, synagogues, halls, houses, and land and whether it would be best for them to sell by private treaty or auction.With the improved market, often with several parties chasing a property, it might seem logical for auction to be the best method of disposal. However, a charity and its trustees, who have a legal responsibility, need to be satisfied that they are making the right decision.
So, you own a great commercial investment, let on full repairing terms to a blue-chip covenant. Great. Sit back, collect the rent, relax as there's nothing to do? Well sometimes it works like that, but more often than not blue-chip companies fail to adhere to their repairing covenants.
There was strong demand for well-priced vacant residential lots with the first lot of the day, a house in Edmonton N9 guided at £250,000+, selling for £323,000 shortly followed by a pair of houses in Bromley, one let, one vacant, guided at £460,000+, selling for £572,000. Adding to this, a house and bungalow in Barnet sold for £690,000 and £461,000, respectively and a house in NW9 for £660,000 off a £500,000+ guide.
It is common for parties to vary the terms of an existing lease, particularly in times of economic uncertainty. This can include varying the extent of the demise or varying the rent. It can often allow either party to have greater flexibility but it is a process, not without its pitfalls.
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