Commercial Property Structuring Solicitors
Strategic legal advice on how commercial property is owned, held, financed and reorganised. We advise investors, developers and businesses on property ownership structures, SPVs, joint ownership, group reorganisations and property transfers, working alongside tax and corporate advisers where required.
Commercial Property Structuring Solicitors
How commercial property is owned can be almost as important as the property itself.
A commercial property might be held personally, through a dedicated company, within a corporate group, through an SPV, by several investors or as part of a joint venture.
The appropriate structure depends upon the client's commercial objectives.
A structure suitable for a single investment may become inefficient when the portfolio expands. A developer may require a separate vehicle for a new site. Several investors may need clearly documented ownership arrangements. A corporate reorganisation may require property to move between group companies.
At Knights & Shah Solicitors, we advise commercial property owners, investors, developers and businesses on the property aspects of:
- Property ownership structures
- Special purpose vehicles
- Corporate property structures
- Joint ownership
- Joint ventures
- Property transfers
- Group reorganisations
- Portfolio restructuring
- Refinancing-related restructuring
- Development structures
- Investment structures
- Land Registry requirements
Property structuring can have significant tax, corporate, accounting and financing consequences. Where specialist advice is required, we work alongside the client's accountants, tax advisers and corporate lawyers rather than presenting property structuring as a conveyancing exercise alone.
What Is Commercial Property Structuring?
Property structuring concerns the legal framework through which commercial property is owned and managed.
This can involve questions such as:
Who should own the property?
Should a separate company hold it?
Should each property sit in a separate SPV?
How should multiple investors hold an asset?
Should a development be undertaken through a joint venture?
How should properties be reorganised within a group?
How will lenders take security?
How will the structure work when the property is eventually sold?
The answers depend upon the transaction and the client's objectives.
Our role is to ensure that the property documentation properly implements the selected structure.
Why Property Structure Matters
Ownership structure can affect several stages of a property's lifecycle.
These include:
Acquisition
The correct purchasing entity should normally be identified before contracts are exchanged.
Finance
A lender needs to understand who owns the property and which entity is borrowing.
Leasing
The legal owner will ordinarily be the landlord granting occupational leases.
Development
Development obligations, finance and third-party rights need to fit the ownership structure.
Restructuring
Moving property between entities can require transfers, lender consent and Land Registry applications.
Disposal
The eventual exit may involve selling the property itself or, in some structures, a corporate transaction.
A structure should therefore be considered with the property's longer-term commercial purpose in mind.
Holding Property Through a Company
Commercial property is frequently held through a limited company.
The company becomes the registered owner and may:
- Acquire the property
- Borrow against it
- Grant leases
- Receive rent
- Undertake development
- Sell the asset
A company structure can provide a clear separation between the property and the individual's personal ownership.
However, incorporating a company does not automatically make a particular structure commercially or tax efficient.
The client should consider appropriate tax and accounting advice before deciding how the property will be held.
Special Purpose Vehicles
A special purpose vehicle, commonly called an SPV, is frequently used to hold a particular property or project.
For example, an investor acquiring three properties might choose separate SPVs for individual assets rather than holding all three through one company.
A development may similarly be placed into a dedicated project company.
An SPV can make it easier to identify:
- Ownership
- Borrowing
- Income
- Liabilities
- Project-specific transactions
But the suitability of an SPV depends upon the wider circumstances.
Consideration may also need to be given to:
- Finance
- Tax
- Administration
- Corporate governance
- Guarantees
- Future exit
We advise on the property implementation of the structure and coordinate with other professional advisers where necessary.
Multiple Properties and Group Structures
Investors with larger portfolios may hold assets through several companies.
A structure could involve:
- Parent company
- Individual property SPVs
- Development companies
- Operating companies
- Other group entities
As a portfolio grows, the legal structure can become more complicated.
A proposed transaction should establish:
- Which company owns each property
- Which entity receives rental income
- Which company is borrowing
- What security has been granted
- Whether properties are being transferred
- Whether lender consent is required
Clear property records can become particularly important when the group later refinances or disposes of assets.
Joint Ownership of Commercial Property
Commercial property can be acquired by two or more parties.
The parties should understand both the registered ownership and the underlying commercial arrangement.
Issues can include:
- Purchase contributions
- Ownership proportions
- Financing
- Rental income
Property expenditure
Decision-making
Development costs
Sale
Exit
Where several investors are involved, relying on informal understandings can create future uncertainty.
The ownership and commercial arrangements should be documented appropriately for the transaction.
Joint Ventures
Some commercial property projects require a more extensive joint venture structure.
For example:
One party may own the land.
Another may provide development expertise.
Investors may provide capital.
External lenders may provide finance.
The structure needs to address how those interests work together.
Relevant matters can include:
- Land contribution
- Funding
- Ownership
- Governance
Development obligations
Profit sharing
Default
Exit
Our dedicated development joint venture service is:
Property Structuring for Investors
Investors should ideally consider structure before acquiring an asset.
Questions may include:
Will this be a long-term investment?
Will the property be developed?
Will external investors participate?
Will finance be required?
Is the property likely to form part of a larger portfolio?
What is the anticipated exit?
The selected ownership structure should be considered alongside professional tax and accounting advice.
Our property lawyers can then ensure the acquisition and title documentation reflect the structure that has been selected.
Property Structuring for Developers
Development projects can require different structures from passive investments.
A development structure may involve:
- Landowner
- Developer
- SPV
- Joint venture entity
- Funder
- Investors
- Future purchaser
- The property documents may need to coordinate with:
- Development agreement
- Option
- Conditional contract
- Overage
- Easements
- Development finance
- Pre-let
- Forward sale
- Our Property Development practice is:
- Restructuring Existing Property Ownership
Property structures are not always permanent.
A client may later consider moving a property:
- From personal ownership to a company
- Between group companies
- Into an SPV
- Into a joint venture
- Between investment vehicles
- As part of a wider corporate reorganisation
A restructuring should be planned carefully.
Changing the ownership entity can involve a genuine legal transfer of the property rather than simply an internal accounting change.
That can trigger issues concerning:
- SDLT
- VAT
- Existing mortgages
- Lender consent
- Commercial leases
- Restrictions
- Land Registry
- Corporate approvals
These issues should be considered before the transfer takes place.
Transferring Property to a Company
A common enquiry is whether an individually owned property can simply be moved into a limited company.
Legally, the company is a separate person from its shareholders and directors.
A transfer may therefore require:
- Transfer documentation
- Review of title
- Existing lender consent or refinancing
- Consideration of occupational leases
- SDLT analysis
- VAT consideration
- HM Land Registry application
Importantly, transferring land to a connected company can have specific SDLT consequences. HMRC states that where property is transferred to a connected company, SDLT may be calculated by reference to market value rather than simply the amount actually paid.
Clients should therefore obtain tax advice before assuming that transferring a property into their own company will be tax-neutral.
Transfers Between Group Companies
Corporate groups sometimes reorganise ownership by moving property between group entities.
This might occur because of:
- Group restructuring
- Financing
- Investment separation
- Development plans
- Business sale preparation
- Internal reorganisation
Even where both companies are under common ownership, the property transfer still needs to be considered properly.
Relevant issues can include:
- Title
- Existing finance
- Land Registry restrictions
- Occupational leases
- Tax
- VAT
Corporate approvals
Potential tax reliefs may exist in some circumstances, but eligibility should be confirmed by appropriate tax advisers rather than assumed.
Property Structuring and SDLT
Stamp Duty Land Tax can be a significant consideration when commercial property ownership changes.
Potential SDLT issues can arise from:
- Property transfers
- Transfers to companies
- Partnership arrangements
- Group reorganisations
- Changes involving debt
- Lease transactions
- Connected-party transactions
The rules can be particularly technical for transactions involving companies and partnerships. HMRC's current guidance confirms, for example, that special market-value and partnership rules can apply to transfers involving connected companies and partnerships.
Our dedicated property tax page is:
Where detailed tax planning is required, specialist tax advice should be obtained before implementing the property transfer.
Property Structuring and VAT
Commercial property can also raise VAT issues.
Depending upon the property and circumstances, consideration may need to be given to:
- Option to tax
- VAT on acquisition
- VAT on rent
- Property transfers
- Development expenditure
- Business transfers
A restructuring should not proceed on the assumption that moving property between connected entities has no VAT consequences.
The transaction documents should reflect the correct VAT treatment once that position has been established.
Existing Mortgages and Security
A property subject to finance cannot necessarily be transferred freely.
The registered title may contain:
- Legal charge
- Lender restriction
- Other security
The finance documents may also restrict transfers without lender consent.
A restructuring may therefore require:
- Existing lender consent
- Redemption
- Refinancing
- New legal charge
- Replacement security
- Additional guarantees
HM Land Registry maintains specific requirements for registration and variation of legal charges.
Our dedicated refinancing service is:
Structuring Property Around Finance
The ownership structure and borrowing structure need to work together.
A lender may require security from:
- Property-owning company
- Parent company
- Other group entity
- Directors or shareholders in some circumstances
- The security package can potentially include:
- Legal charge
- Debenture
Corporate guarantee
Other security
Where several SPVs own properties within a portfolio, the finance structure may become more complex.
The intended lending arrangements should therefore be considered when establishing or changing the property structure.
Commercial Leases and Restructuring
A property may already be occupied by commercial tenants.
Changing ownership can affect the landlord's legal position and require consideration of:
- Existing leases
- Rent deposits
- Guarantees
- Side letters
- Licences
- Tenant notices
- Management arrangements
The occupational documentation should therefore form part of the restructuring review.
Our Commercial Leases practice is:
Property Structuring and Corporate Transactions
Property can be an important element of a wider corporate transaction.
Examples include:
- Business sale
- Business acquisition
- Group reorganisation
- Share sale
- Asset sale
- Demerger
- Internal restructuring
- The property may need to be:
- Retained
- Transferred
- Leased
- Assigned
- Recharged
- Refinanced
The property work should therefore be coordinated with the wider corporate transaction.
Our dedicated service is:
Separating Trading and Property Ownership
Some businesses operate from property held by a different entity within the wider ownership structure.
For example, one company may own the property while another operates the business.
This can require documentation governing occupation between the entities.
Depending upon the circumstances, issues may include:
- Lease
- Licence
- Rent
- Repair
- Insurance
- Services
- Finance
- Tax
The arrangement should reflect the commercial reality rather than relying on an undocumented internal understanding.
Property Structuring and Portfolio Management
As portfolios expand, ownership arrangements can become increasingly important.
An investor may need to understand:
- Which entity owns each asset
- Which properties are charged
- Which entity is landlord
- Which assets may be sold
- Which properties have development potential
- How future acquisitions should be held
- Our dedicated portfolio service is:
Good portfolio records can make later financing and disposals considerably easier.
Property Structuring Before an Acquisition
The best time to consider structure is generally before the acquisition becomes unconditional.
Changing the purchasing entity later can introduce additional legal and tax considerations.
Before exchange, the client can consider:
Proposed ownership.
Investment objectives.
Finance.
Development intentions.
Other investors.
Tax advice.
Exit strategy.
The acquisition documents can then be prepared consistently with the selected structure.
Property Structuring Before Development
Development projects often require decisions concerning structure before substantial costs are committed.
Relevant questions include:
Who acquires the land?
Who obtains planning permission?
Who borrows?
Who enters development contracts?
Who grants future leases?
Who receives sale proceeds?
How are investors involved?
The property ownership should align with the development and finance arrangements.
Changing structure halfway through a project can be considerably more complicated.
Land Registry Requirements
Property restructuring frequently requires HM Land Registry applications.
HM Land Registry confirms that where registered ownership changes, an application is required to change the registered proprietor, with the relevant transfer and registration documentation.
Depending upon the restructuring, applications may involve:
- Transfer of whole
- Transfer of part
- New legal charge
- Discharge of charge
- Restrictions
- Notices
- Other register entries
Restrictions are particularly important because they can require specified conditions to be satisfied before a disposition can be registered.
These requirements should be reviewed before completion.
Property Structuring and Exit Strategy
The eventual exit should be considered when a structure is established.
A client may ultimately want to:
- Sell the property
- Sell several assets
- Sell the property-owning company
- Bring in another investor
- Refinance
- Develop and dispose
- Retain the asset for income
Different structures may create different legal and commercial considerations.
No structure guarantees a particular future outcome, but considering exit early can reduce the risk of creating unnecessary obstacles later.
Common Property Structuring Problems
Problems can arise where:
- Structure is considered after exchange
- Property is transferred without checking lender requirements
- Tax consequences are considered too late
- Ownership arrangements between investors are unclear
- Leases do not reflect the actual landlord
- Group transfers are assumed to be tax-neutral
- Land Registry restrictions are overlooked
- Existing charges are not addressed
- Internal occupation arrangements are undocumented
These problems can become particularly visible during refinancing or sale.
Early coordination between the client's legal, tax, accounting and finance advisers can help reduce that risk.
Our Property Structuring Process
1. Understand the Commercial Objective
We establish what the client wants the property structure to achieve.
2. Identify the Property
We consider the relevant titles, leases, finance and existing ownership.
3. Review the Proposed Structure
We identify the property steps required to implement it.
4. Coordinate Specialist Advice
Where appropriate, tax, corporate, accounting or finance advice should be obtained before implementation.
5. Review Lender Requirements
Existing or proposed security is considered.
6. Prepare Property Documentation
This may include transfers, leases, deeds or other relevant documents.
7. Complete the Restructuring
The agreed property transactions are implemented.
8. Deal With Registration
Relevant HM Land Registry and other registration requirements are addressed.
How Knights & Shah Solicitors Can Help
We can advise on the property aspects of:
- Commercial property ownership structures
- SPVs
- Portfolio structures
- Joint ownership
- Property joint ventures
- Transfers to companies
- Intra-group property transfers
- Group reorganisations
- Property restructuring
- Development structures
- Investment structures
- Refinancing-related restructuring
- Commercial leases following restructuring
- Property transfers
- Land Registry applications
Where the proposed structure requires specialist tax, corporate, accounting or financial advice, we work alongside the client's appropriate professional advisers.
Why Choose Knights & Shah Solicitors?
Commercial Property Focus
We approach structuring from the perspective of the underlying property, title and future transactions.
Investment and Development Perspective
We advise on structures involving commercial investment property, development assets and portfolios.
Joined-Up Property Advice
Structuring can be coordinated with acquisitions, refinancing, leases, development and disposals.
Practical Approach
We focus on implementing structures that reflect the client's actual commercial arrangements.
Appropriate Specialist Coordination
Where tax or corporate advice is required, we recognise the distinction and work alongside the appropriate advisers rather than overextending property advice.
Based in Woking, Serving England
Knights & Shah Solicitors is based in Woking, Surrey and advises commercial property investors, developers and businesses across England.
Speak to Our Commercial Property Structuring Solicitors
Whether you are establishing an SPV, reorganising a commercial property portfolio, bringing investors into a project, transferring property between entities or considering a new ownership structure, the legal and tax implications should be considered before changes are implemented.
Knights & Shah Solicitors provides commercial property advice on structuring and restructuring from initial title review through documentation, completion and Land Registry registration.
Contact our Commercial Property team to discuss your proposed property structure or reorganisation.
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