Option to purchase

chris horne

Member
Staff member
#1
We were looking to purchase a Licensed Hotel but unfortunately the numbers did not stack up.
We are now considering putting forward a lease with option to purchase but are unsure how to do it. Ideally I would like to talk to a specialised solicitor or finance agent in this regard but cant seem to find anyone who could help me.

My questions are:
What do we offer to lease the property for based on current turnover/profits?
What time frame can we structure the offer to purchase for? 2 years? 5 years?1 year?
Does the rental/lease contribute to the final purchase Option?
How do we legally structure and complete on the above?

Any help or pointing in right direction would be appreciated
 

Jeffrey Shaw

Member
Staff member
#2
I cannot advise re the financial aspects. However, as regards conveyancing aspects:
1. You can offer whatever structure you feel make sense, but be guided by your financial adviser/ accountant.
2. There might be a Letting Agreement or Lease initially. If its term exceeds 7yrs., it will need to be registered at HMLR.
3. It will need to state in whose name (owner's or yours) the Local Authority/Licensing Justices are to license the premises.
4. If there are existing employees whose jobs will continue, also consider the TUPE (Transfer of Undertaking) employment protection rules.
5. The Option can be either a clause of that Deed or in a separate Agreement.
6. As to the eventual purchase price, there has to be either a fixed figure stated OR a method/formula for settling it in due course.