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Thomas
Thomas, Lawyer
Category: UK Property Law
Satisfied Customers: 7473
Experience:  BA (Hons), PgDip, Practising Solicitor
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Hi I have 2 commercial properties both tennented and both on

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Hi I have 2 commercial properties both tennented and both on one mortgage.
Ive just had 2 valuations on one of the properties both @ £130,000.

I want to sell it to a family member who will need to get a mortgage for it is there a commercial mortgage available on the market ? If not could i gift the deposit from the sale of it, Ie could they get say a £100,000 mortgage using the £30,000 difference as the deposit ( gifted from me )

Regards

Andrew Wilkinson
Hi Andrew,

Thanks for your question.

Most of the high-street lenders offer commercial mortgages, it’s an important arm of their business so there will be a number of options for your family member. They just need to shop around.

In terms of gifting the deposit to him, it would be easier and more to the satisfaction of the lender for you to simply reduce your purchase price for the property you are selling to him by £30, 000.00. So he would be getting a £130, 000.00 value property for a £100, 000.00 purchase price. The solicitor your family member instructs to act on the purchase would deal with legal requirement of the lender in this regard (they would also be acting for them).

It would essentially involving getting a statutory declaration of solvency from you stating that you do not anticipate becoming bankrupt and then your family member taking out an indemnity policy so that they and the lender are covered in the event that your are subsequently made bankrupt and the creditors attempt to set aside the transfer to your family member because it is for less than the market value.

You will also have to speak to your lender to ensure that they are will to discharge their first legal charge over the property to be transferred to your family member. They may require you to repay some of the mortgage from the purchase price or to remortgage.

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I will answer your follow up questions you may have.

Kind regards,


Tom
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