Published in Retail Newsagent Magazine, 06 May 2016
In the current market, many retailers are taking the opportunity to expand their businesses by buying additional stores. In addition, the Post Office’s Network Transformation programme has created an opportunity to combine post office services with existing convenience stores.
These projects will normally involve store development and all of the associated administration that comes with it in terms of finance, dealing with landlords, planning permission and suchlike. In most cases, this goes very smoothly and most problems that occur can be solved by applying a bit of common sense.
However, I was recently asked to help a retailer who thought he had done all the necessary preparation and just needed the solicitors involved to sort the legal matters out. He discovered a serious problem at the eleventh hour that not only delayed his store refit, but also cost him quite a bit of money.
The client in question was due to take over a post office in the Greater London area at the end of last month. He was then going to have the store refitted under Network Transformation and join the WH Smith Local franchise.
The work should have taken two weeks from start to finish and the client had been delighted with the preparation work done by all those involved to ensure the smooth passage of the business from the outgoing subpostmaster to the new one.
Dates for the closure of the post office were agreed and a schedule for the work was prepared. Everything was in place and everybody was waiting for the agreed date to arrive and the work to commence.
Work was due to start on a Monday, but on the Thursday before, I received an urgent call. The new subpostmaster was very worried that all the legal paperwork wasn’t agreed and signed and there were only a couple of working days to go.
His solicitor told me the speed of the vendor’s solicitor was the cause of the problem and there was very little chance of completing matters in time for the work to start as planned on the Monday.
In the end, it was decided the best option was to postpone for four weeks to allow for the paperwork to be completed and new dates to be agreed. My client incurred penalty payments adding up to several hundred pounds because the job was cancelled at such short notice.
So what went wrong and what can other retailers learn from this? My client simply underestimated the length of time the conveyancing would take. This was his first experience of commercial property and he had no idea what was involved. By the time he realised what was going on it was simply too late to do anything other than postpone, and this was an expensive lesson to learn.
It is very normal in commercial property transaction for draft documents to be sent backwards and forwards in what seems like a never-ending game of legal table tennis before the final version is agreed.
When three solicitors are involved, as in this case, it can be even more torturous and when questioned, each solicitor will probably blame the other two for being slow. In reality, there is likely to be a combination of factors that contribute to the lengthiness of the process, the main one being that different solicitors work at different speeds due to workload or the size of their practice. This can be very frustrating, so here are a few things to think about relating to conveyancing when you are planning any store development of business purchase.
- Always use an experienced commercial conveyancing solicit
- Ask how long it is likely to take and add two to three weeks for delays
- Tell your solicitor about relevant time constraints or deadlines at the start and keep reminding him/her of them as they get closer
- Keep in touch with your solicitor on a daily basis and monitor progress
- Keep in touch with the other parties and compare notes as to where things are at
- Don’t be afraid to show your frustration to your solicitor