What are the Steps in Buying A Commercial Property in Scotland? 

Buying a commercial property in Scotland follows a distinct legal path. Understanding it saves time, cost and risk. Scottish conveyancing has three key stages: contract (missives), conveyancing (disposition), and registration. These stages differ in some respects from England & Wales. For example, in Scotland the deal becomes legally binding once the missives are concluded. In England & Wales, binding contracts only arise when contracts are exchanged. 

At Scullion LAW, we guide you from first offer through to post‐completion, making sure every legal, tax and regulatory requirement is met. We advise business owners, developers and first‐time commercial property buyers, recognising how much depends on getting it right early. 

1. Contract Stage: Missives 

Missives are the written correspondence (formal letters) exchanged between the buyer’s and seller’s solicitors. They set out the offer, acceptance, price, conditions (for example planning permission, building warrants, or licences), date of entry, fixtures included, and any other terms specific to the transaction. Once the missives are concluded, the contract is binding. Backing out at that point can  facing legal action. 

In a commercial deal, missives often include complex conditions such as tenant leases, environmental surveys, licences and planning consents. By contrast, residential missives tend to be more standard, with fewer conditional terms. 

2. Due Diligence 

Before missives are concluded, you need thorough due diligence. Tasks include: 

• Checking title deeds, current ownership, any burdens or servitudes (rights of way, restrictions on development). 

• Verifying that the property has planning permission for its intended use, that building warrants or change-of‐use permissions are valid or obtainable. 

• Ordering surveys (structural, environmental) to detect contamination, subsidence or other defects.  

• Checking existing leases and tenancy agreements (if the property is tenanted). Who is liable for repair, maintenance, insurance? What are break clauses or assignation rights? 

3. Tax & Financing 

A major difference in Scotland is Land and Buildings Transaction Tax (LBTT), which replaced Stamp Duty Land Tax (SDLT) from 1 April 2015.  

Key points on LBTT as applied to commercial transactions: 

• LBTT must be paid and a land transaction return submitted to Revenue Scotland within 30 days of the effective date of the transaction. 

• The “effective date” is when completion happens.  

• For lease transactions, LBTT may apply depending on certain circumstances.  

Financing in commercial deals is also more complex. You may deal with institutional lenders, commercial mortgages, cross‐collateralisation or floating charges. The security documents tend to be more detailed. Residential purchases mainly involve a standard mortgage, with simpler security. 

4. Conveyancing Stage: Disposition & Settlement 

Once missives are concluded and all conditions met, the next step is the conveyancing or transfer stage. In Scotland this is done by a deed called the disposition. It is signed by the seller and must comply with legal formalities.  

On settlement (completion), the buyer pays the balance of the price; ownership passes under the disposition; and the buyer obtains physical possession. If leases are in place, landlord and tenant responsibilities move as per the leases. 

5. Registration 

The final step involves registering your title in the Land Register of Scotland.  

Simultaneously, you must submit the LBTT return and pay any tax due. When the return is not submitted, or LBTT not paid, you cannot register the disposition andd you may be subject to additional interest and a fine from Revenue Scotland.  

6 Dispute Risk & Resolution 

Commercial transactions carry more risk: title defects, planning breaches, environmental liabilities, lease disputes. It is essential to anticipate these during due diligence and contract negotiation. If disputes arise later – over lease terms, over who is responsible for upkeep or over boundary lines; practical resolution (negotiation or mediation) is often preferable. But in serious cases, litigation or arbitration may be required. 

Contrasts with Residential Conveyancing 

• Time & Complexity: Residential purchases generally proceed faster once an offer is accepted, with fewer conditional clauses. Commercial deals often drag out due to conditional missives, funding, planning and regulatory approvals. 

• Due Diligence Scope: More extensive in commercial. Environmental, structural, licence and planning issues are more likely to matter. 

• Documents: Commercial leases, facility agreements, securities demand bespoke drafting; residential work usually involves standard contract forms and simpler mortgage documents. 

• Tax and costs: Commercial includes LBTT on premiums, NPV of rents, sometimes more complex VAT issues and specific rates or reliefs. Residential is simpler in many cases.