AFTER a rollercoaster ride over the past 18 months or so, the commercial property market appears to have stabilised but we are still some way from the levels of activity seen at the peak of the market.

Good quality developments are continuing to sell and improved yields on property investments have brought increased numbers of investors back, but not yet at the levels seen previously.

With more restrictive lending criteria and uncertainty regarding economic conditions continuing, it seems there are fewer people with the means or appetite to invest than in recent years. Of those buyers, many are also less likely to take some of the commercial risks they were prepared to take in the past. In this environment, sellers should do all they can to minimise scope for disagreement and delays during the legal process which could ultimately cause the deal to fail.

The importance of agreeing the fundamental terms of a commercial property transaction (often called the "heads of terms") from the outset, in a form which is acceptable and workable to both parties and their funders, should not be underestimated. Although heads of terms are not usually intended to be legally binding they are meant to represent the intentions of the parties. Seeking to renegotiate these fundamental terms later is often looked upon unfavourably.

When negotiating heads of terms, a good commercial agent is key. They can guide you through the negotiation process and prepare the heads of terms on your behalf.

But where a transaction involves any unusual or non-standard terms (such as a sale and purchase conditional on the grant of planning permission or a transaction involving additional payments dependent upon agreed criteria) you should also speak to a specialist commercial property lawyer, ideally before the final heads of terms are agreed.

Terms which look innocuous and straightforward on the surface sometimes have significant and occasionally deal-breaking legal implications.

In a strong market, buyers and their funders may be inclined to take a commercial view. In a less buoyant market, identifying and addressing contentious legal and commercial issues from the outset can not only save you time and money later, but may mean the difference between securing a sale/letting or not.

If you need any assistance regarding a commercial property transaction, contact Mark Moore on 01823-232373 or m.moore@ashfords.co.uk