y Sarah Easton, senior associate in the Commercial Property team. Article first published in a leading daily broadsheet newspaper 11 May 2013.
Q) My partner and I are redeveloping a country estate into a luxury spa hotel in Kent for a Russian client of ours. The job is almost done and we’ll be selling the property shortly to him. Should we envisage any problems with the sale of this kind of building to a foreign entity?
A) For the most part, you will follow the same procedure as you would for the sale of any land or building in England and Wales with some additional checks on the buyer.
The Land Registry has specific requirements for the signature of the transfer of property where a foreign entity is involved. For example, the wording in the transfer must show that the person signing or authorised to sign it on behalf of the buyer if the buyer is a company understands English or has been read the Transfer in Russian.
You may require certain promises (an indemnity) from the buyer in connection with the future use of the land. For example if you had to agree any positive obligations with the local authority when you obtained planning permission. It is therefore important for you to know that the buyer is capable of giving those indemnities and that you will be able to enforce them.
It is not possible to carry out a company search or solvency checks in respect of an overseas entity. Therefore your solicitor will require an opinion letter from a Russian solicitor confirming that the buyer is solvent and has the authority to buy the property and that the transfer has been properly signed in accordance with the legal requirements in Russia and is enforceable.