When talking to your solicitor about the sale of your one of the most important things to review is the current lease of the business.
In most cases we don’t tend to look at this document after we’ve bought the business but during the sale process it’s important to go through this again in detail at it can have a huge impact on the valuation and the ability to sell, I always suggest that my clients make the solicitors meeting one of the first in the process.
If you do find it there is an issue with the lease then this can take some time to sort out so its always better to get this checked out early on.
Key questions to ask.
A few of the key points to review with your solicitor during this meeting are
• How much time is left on the current lease and do you feel that buyer’s will feel it is long enough in relation to the price that you’re asking for the business?
• If you’re not already sure check how often the rent is due to increase and how this is calculated. This is a commonly asked in the early stages it’s good to answer it in the initial marketing.
• What does the lease say about assignment?
This is the transfer of the lease from yourself to the person buying the business.
Most leases will state that all costs relating to the assignments to be paid by the lessee (you) and it’s a good ideas at this stage to make sure your solicitor pushes for you to only pay 50%.
By giving your solicitor the heads up about this early on you can make sure that this agreement to pay 50/50 is drawn into the contract of sale and its an easy way to save yourself a good chunk of money on legal fees.
I’ve always advised my clients to do this and it’s very rarely gets questioned by the purchaser’s solicitor but, it is important that you instruct your solicitor to do this it can be missed.
• How much are they going to charge you?
I’ve noticed that solicitors fees of my clients seem to vary greatly for very similar transaction.
It’s a good idea at this stage to get an indication of what the solicitor is going to charge you in relation to dealing with preparation of the contract of sale and helping deal with the assignment of the lease
Understanding what your legal fees are likely to be is important when you work out the sale proceeds you will be left with after all of your costs.
If you feel that their costs are too high don’t be afraid to question them or seek other quotes, a lawyer working for you on this does not necessarily have to have any history with you.
I work with a couple of lawyers in Sydney who specialise purely in business sale transactions so if you need a second opinion feel free to let me know and I’ll happily pass on their details.
Also, just so you know I don’t take any kickbacks or referral fees from anybody that I work with and I only recommend people who I know can genuinely help the people that I work with.
I hope this helps, feel free to get in touch if you have any questions about selling your café.
What to ask your solicitor when selling a cafe