Celebrating 300 years

John Pagella on how best to sell a masonic hall

Tuesday, 08 March 2016

Just like moving home?

Can personal experience of selling a house equip people to deal with what selling a masonic centre involves? Grand Superintendent of Works John Pagella notes the similarities and differences

Moving house is said to be one of the most stressful experiences in life. From the large sums of money involved through to unfamiliar legal issues, the process can be highly traumatic. The same could be said of the challenges that masonic halls and centres face should an existing building no longer serve the needs of Freemasonry today. 

Successfully relocating is a subject all of its own, but the starting point is realising the full value of the existing building. Masonic halls and centres are commercial buildings and their use is regulated by planning laws. You might think the laws and regulations are no different from those affecting residential property, but while the underlying principles are the same this is not the case once you look at the detail. 

In relation to commercial buildings, planning use rights frequently embrace a range of business types within the same planning use category – planning is not directed towards preserving individual businesses or protecting their value. 

A shop can fail in the hands of one business, but succeed in the hands of another with a different business model. As a result, the market value of a commercial building can be quite different from its value to the owner or occupier. Understanding this is particularly important where a business has run into financial difficulty, and managing a masonic centre is running a business. It therefore may not always be the building that explains the problem.

The next consideration is whether the building or its site has a higher value to a purchaser contemplating a change of use with or without refurbishment, adaptation or redevelopment. 

Spotting this takes both knowledge and experience, and missing it can lead to underselling. The numbers can be substantial.

‘You might think the laws and regulations are no different from those affecting residential property, but this is not the case once you look at the detail.’

Recognising that a building or site has development potential is of fundamental importance. However, it is only the first step in a complex process that can all too easily lead to frustration and regret if experienced developers and their advisers are allowed to dictate the agenda. Is an option sensible, or should a conditional contract be considered? If a conditional contract is the right approach, should the vendor have an element of control over the timescale and planning agenda? If the answer to that question is yes, how can this be best achieved? 

Proceed with caution

In some cases the answer could be for the vendor to explore the planning potential and obtain an outline or detailed permission before selling. Obvious though that might seem, it may not always be appropriate if, for example, there are a number of development options. I pose questions rather than offer answers for the reason that each case will be different, and what works for one may be quite wrong for another. 

As to the question of whether experience of house sales can equip someone to manage commercial property transactions, I would suggest that proceeding without any guidance would be most unwise. Informed, experienced and independent advice from qualified advisers is essential. It will cost money, but provided you have the right adviser it will be money well spent.

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