How to sell an industrial estate

Strategic decisions and deal structure

An attorney can help analyze whether an asset or share deal is more advantageous in a particular situation. They will take into account legal, tax and commercial aspects - and can sometimes recommend alternatives (e.g. selling part of the plant as a compromise). The important thing is to make the right decision before the offer to investors is launched and to adjust the next steps accordingly.

Legal due diligence

A law firm will provide a thorough legal due diligence of the property or company being sold. In the case of an asset deal, it will check in particular the legal status of the property - ownership, pledges, easements, construction documentation, environmental burdens, lease agreements, etc. In the case of a share deal, it will add a review of the entire company - corporate documents, contracts, disputes, employment contracts, accounting legal compliance, etc. The aim is to detect potential problems in advance. The attorney will then recommend how to deal with the findings (e.g. correct errors in the land registry, pay debts, clean up the company from non-core activities).

Quality contractual documentation

Based on the findings of the review, the attorney will prepare or revise contracts to protect the client as much as possible. For an asset deal, he or she will draw up a contract of sale for the property with a clear definition of the area to be transferred, the price, payment terms, the resolution of the period until registration in the Land Registry and guarantees for the condition of the property. For a share deal, it prepares a share/share transfer agreement that includes detailed representations and warranties of the seller on the condition of the company, provisions for indemnification (indemnification) of the buyer in case of latent defects, a mechanism for possible adjustment of the purchase price (e.g. according to the financial statements as of the date of transfer) and other necessary provisions. The lawyer will ensure that the contracts are in accordance with the law and the agreement of the parties and do not contain loopholes that could cause a dispute later on.

Management of the whole process and negotiations

A transaction for the sale of a premises can have many steps - from the initial agreement to the Letter of Intent, due diligence, arranging financing (if the buyer is taking out a loan), to signing contracts and settlement. A law firm can act as a project manager for the transaction - setting up a timeline, monitoring terms and conditions, coordinating with notaries, appraisers, banks or tax advisors. During negotiations with the counterparty, the attorney defends your interests - he or she knows where to push and where to back off to make the deal balanced. An experienced lawyer will also recognize potential "red flags" in the negotiations (e.g., the buyer's unwillingness to provide a deposit or suspicious delays) and advise on how to respond.

Safe settlement and transfer

Attorneys will ensure that the transfer of money and property or interest occurs safely - typically suggesting the use of a lawyer's escrow or notary's escrow for the purchase price. This ensures that the seller gets paid only after it is certain that the buyer will get what he has (registration in the Land Registry or Commercial Register). At the same time, the buyer does not risk sending money before acquiring the property. The lawyer will prepare all the proposals for entry in the Land Registry or documents for the Commercial Register and take care of their submission. After the deal is closed, he can help with other steps such as handing over the documentation, changes to contracts (e.g. amendments to lease contracts notifying the change of ownership of the property), etc. This ensures that the whole process runs smoothly and formally.

Stories from practice: when things are done right and when they are not

Story 1 - Selling without lawyers and a bitter awakening: the owner of a manufacturing site decided to sell the company that owned the site, relying only on the services of a real estate agent. The real estate agent found a foreign investor and negotiated the sale in the form of a share deal. However, without thorough due diligence and a good contract, the owner discovered after a while that the investor was withholding part of the purchase price. Why? After the takeover of the company, hidden debts came to light - the former company owed for the removal of past environmental burdens. However, there were no guarantees in the contract and no mechanism to resolve such matters. Therefore, the investor did not pay part of the price, citing the seller's breach of duty. The whole matter ended in a long dispute in which the owner lost a substantial sum. Lesson: If the seller had had a lawyer from the beginning, he would have insisted on proper due diligence and contractual treatment of environmental risks - either the price would have been reduced or the liability would have been resolved differently. Nothing would have prevented the deal, or it would have been better not to go through with it.

Story 2 - Smooth progress with legal support: Another client of ours, a company that owned a logistics facility, was considering selling. Together we analysed the situation and concluded that a sale by way of an asset deal would be more appropriate - the buyer was an investment fund that did not want to take over the operating company, just the property. The legal team prepared the transaction: we had an estimate of the price prepared, discovered a minor problem with the land area in the land registry (which we corrected before the sale), and negotiated an escrow account with the buyer for a secure settlement. The purchase agreement dealt in detail with the handover of the site and the allocation of costs pending the transfer. As a result, the transfer went smoothly - the buyer received a clean property with no legal defects and our client was paid the full purchase price on time. Both parties were satisfied and the deal went quickly, without any nerves or subsequent surprises.

Conclusion.

The sale of an industrial property, whether in the form of an asset deal or a share deal, is a complex process where the world of real estate and the world of commercial law meet. The decision on which path to take should be made taking into account all the legal, tax and commercial implications. As our examples show, underestimating the legal details can be costly. Conversely, with expert guidance, the optimal deal setup can be achieved - minimizing taxes and risks, while making the entire sale faster and simpler.

A law firm specializing in real estate transactions and acquisitions will provide invaluable support from the initial consultation to the final signings. Our experienced lawyers will help you choose the right structure for the sale, guide you through the jungle of legal obligations and negotiate terms that protect your interests. That way, you avoid unnecessary risks and the deal goes smoothly.

If you want to sell (or buy) your industrial site with the confidence that you won't forget anything important, contact us. We'll be happy to answer your questions, guide you through the process and ensure that your transaction is a success - with all the benefits that the right legal solution offers. Let the professionals help you and turn your deal into a worry-free success story!