Getting the basics right: why having the right documentation is essential for a smooth asset sale

In any real estate transaction, clear, complete andup-to-date documentation is one of the simplest, but most powerful tools that avendor has. The transparency and confidence born from the vendor having theright documentation readily available reduces friction and often speeds up thewhole due diligence process. This ultimately supports a timely and commerciallysuccessful sale. Too often though, we are seeing vendors underestimate theimportance of having their house in order prior to going to market and evenwhere vendor Technical Due Diligence reports are available, often there aresignificant gaps which effectively render them useless to scrutiny. Incomplete,inconsistent, or difficult-to-access documentation can slow deals. If thepurchaser cannot get comfortable with the documentation available, they willfactor that risk into their commercial offer, or simply walk away.

The need for clear documentation is even more acute inresidential assets – BTR, PBSA and so – subject to evolving safety legislationand under greater regulatory and reputational scrutiny than ever before.

Fire safety is critical

Nowhere is the documentation gap more costly than in firesafety compliance. Since the Grenfell tragedy, fire safety is rightly a centralissue for investors, lenders and legal teams. The absence of robust fire safetydocumentation is a red flag, and increasingly a deal breaker.

Buyers and funders are simply unwilling to take on the riskof incomplete compliance documentation in high to mid-rise assets wherecladding, compartmentation and life safety systems must be evidenced in detail.Vendors may have the information but spread across disparate systems; this hasto be consolidated. The Building Safety Act 2022 brought changes to howbuilding safety need to be managed – owners of higher-risk residentialbuildings must demonstrate a golden thread of building safety compliance. It isno longer optional.

Get ready beforegoing to market

The message is clear – documentation must be consolidated,reviewed, and updated before going to market. For residential assets, alongsidethe usual technical information, the following should be considered:

-      Building Safety Certificate (where appropriate)

-      Updated Fire Risk Assessments

-      Fire Strategy reports

-      EWS1 forms (where applicable) aligned to PAS9980

-      Evidence of remedial works

-      Compliance certificates for alarms, fire doors,sprinklers and so on

Ultimately, investing time and resources into making surethese items are in place in the correct manner is a simple yet powerful toolfor the vendor to ensure asset value is protected in the transaction. Not onlycan it make the transaction process smoother, but it could also save lives.