Commercial Property Mortgaging and Refinancing

Portfolio Management

If you are the owner of multiple businesses, ensuring your business portfolios are well managed is key to your companies' success. Portfolio management involves actively analysing business plans and company cashflow and making complex investment decisions, such as whether or not to refinance your business's residence. Over the last few years, sustained improvements to the UK's financial market have led to a significant rise in the number of mortgage applications being approved by lenders. As such, business owners now have the opportunity to seek a remortgage for their business property, giving them the potential to tap into cash that was previously tied up in property equity.

What does refinancing involve?

Refinancing your commercial property involves paying off the current mortgage debt that is attached to the property and replacing it with a new one. The process of remortgaging a property is relatively straightforward, but there are a number of legal technicalities, such as potential title issues, that are likely to require the help of a qualified legal professional.

What are the advantages of refinancing a commercial property?

More and more business owners in the UK are choosing to refinance their commercial properties. Remortgaging a property allows commercial property owners to tap into cash that they previously did not have access to. It is a quick and straightforward means of generating a large sum of cash that can be used to benefit the owner’s business. As well as releasing money that was formerly held as equity in the property, the new mortgage loan is likely to have a lower APR rates and lower monthly repayments, allowing the property owner to retain money that was previously being spent on payments.

What issues do I have the potential to face?

Most remortgaging applications are accepted without a hitch, providing that the business owner has a good credit rating. When issues do arise, they are usually predictable and easy to solve, such as problems completing paperwork or delays obtaining evidence that the lender has asked to view. Other issues, however, are more serious, such as those potentially uncovered during your lender's title search.

What is a title search?

When you submit a remortgage application to a lender, the lender will respond to the application by enlisting the help of a title company. The company will conduct searches on your property to determine its title and identify whether any title issues have occurred in the time since your first mortgage was approved. The purpose of the search is to assure that lender that you are the legal owner of the property, and that there are no issues clouding your property's title.

What are title issues?

Title issues are issues that are uncovered during the property search; they usually relate to the existence of liens on your property's title. There are two types of liens that commercial property owners are likely to incur. They are:

Judgement liens

Judgement liens can be registered against your property without your consent. The presence of a judgement lien on your property title means a debt has been secured against your property. Judgement liens can be issued against any individual who has been taken to court by a creditor and issued with a County Court Judgement (CCJ) for unpaid debts. The lien makes your property collateral for the debt.

Construction Lien

A construction lien is a legal claim to payment; it can be made by builders, contractors and other construction workers who have not received payment for works they have completed. Construction liens are lodged against the offending individual's property and identify the property as collateral for the debt. If a lien is served, the contractor who filed the claim will be given the right to retain the property until the debt is paid.

Why do title issues require the help of a solicitor?

In the event that a lien is registered against your home, you should seek the help of a solicitor. Liens are legally complicated matters that should be handled by a solicitor. Failing to seek expert advice about a lien could put you at risk of serious loss. If you feel a lien has been issued unfairly, you have the right to challenge the lien in court; a solicitor will be able to help with this.

How can Pabla & Pabla Solicitors help me with my portfolio management?

Here at Pabla & Pabla Solicitors, our team of commercial property solicitors are experts in the field of commercial law and are able to help with all aspects of property management. We can guide you through the legalities of the remortgaging process, help you to complete any legal documents that the lenders require, and help overcome any title issues that are revealed. Get in touch with our team today to help with your portfolio management.

Get a free consultation
Our expert team of Solicitors are always on hand to meet your needs. Send us your details and we will call you back to discuss your enquiry