Sale and Leaseback agreements are excellent options for quick finance and have the potential to deliver good returns, both for the seller and the buyer.
What is a Sale and Leaseback?
A Sale and Leaseback is a real estate transaction that involves a seller sells the property they currently own, and then on the completion of this transaction, the buyer leases some or all of the premises back to the seller (the original owners).
Selling a commercial property is a straightforward and regularly used means of releasing capital that was previously tied up in property equity; a Sale and Leaseback agreement allows business owners to sell their propery without having to interfere with its current business proceedings and relocate. Our Leeds sale and leaseback solicitors can help you with any sale or leaseback activity you may be looking to complete.
What are the advantages of a Sale and Leaseback agreement?
As companies fight against the effects of Brexit and Covid-19, sale and leaseback deals are becoming an increasingly popular way for business owners to quickly secure finance without affecting their business operations. There are a number of advantages to agreeing to a Sale and Leaseback agreement, not just for the seller, but also for the buyer.
Releasing a large sum of money quickly.
The property remains a companies business location and doesn’t need to change.
The seller no longer has to worry about market changes that could affect the value of the property.
The tenant will look after the property meaning the new owner will not need to have much involvement in the property’s running.
The new landlord will already have a tenant and can start recouping the financial outlay through rent.
The landlord can be reassured they have a tenant who most likely loves the property and will look after it.
What are the VAT implications of a sale and leaseback agreement?
Property is unusual in that there is a general exemption from VAT unless the owner of the building elects the property to be subject to VAT. If VAT is elected, then any rent charged will be subject to VAT. If this occurs, then, even if the sale and leaseback transaction has been undertaken at the same amount of rent as the previous notional rent, the revenue cost to the CCG will now be 20% higher due to VAT.
How our sales and leaseback solicitors can help
Our Leeds sales and leaseback solicitors are on hand to help you complete on sale and leaseback agreements on commercial properties.
If you are seeking legal advice in relation to buying a commercial property or selling a commercial property then we are the place to be. With experts in selling and buying business property, our sales and leaseback lawyers can help you complete your transaction. With our Leeds sale and leaseback solicitors offering expert legal advice, we are just a phone call away.
Contact us on 0113 2007480 or email us on firstname.lastname@example.org to arrange your free initial, no-obligation consultation with a specialist.