Introduced in October 2002, the Commercial Property Standard Enquiries (CPSE) is essentially a Form which raises enquiries on matters that a prospective buyer or tenant may wish to know about the property.
They are used in all commercial property transactions (i.e. sale or lease of a commercial property). CPSEs aim to expedite a commercial property transaction by providing the prospective buyer/tenant with essential information about the leased property. There are 7 CPSE forms, ranging from CPSE1 to CPSE 7.
CPSE 1 covers all commercial property transactions, such as freehold or leasehold transactions and vacant properties or properties with existing tenants. CPSE 1 contains questions which relate to environmental issues regarding the property, the property’s physical condition and any notices or disputes in relation to the property etc. CPSE 1 is extensive and (together with any additional enquiries relevant to the particular transaction) would provide the buyer/ tenant with in depth information relevant to the property.
CPSE 2 to 7 are known as supplemental enquiries forms and are generally used alongside CPSE 1. This is because the questions in the Forms are tailored towards particular property transactions.
CPSE 2 is used when a property is being sold subject to commercial use by the tenant.
CPSE 2 can also be used when the property is sold with existing tenants. In that case CPSE 1, 2 and 6 will be used.
CPSE 3 is used on the grant of a lease.
CPSE 4 is used when the property being sold is leasehold or on an assignment of the lease.
CPSE 5 is used when the leased property is to be surrendered.
CPSE 6 is used for enquiries relating to residential tenancies.
CPSE 7 is a shorter form and the alternative to CPSE.1. CPSE.1 covers all commercial property transactions when CPSE 7 is not considered appropriate.
CPSE 1 has questions that are not present in CPSE 7 (such as questions in relation to employees and commonhold) and simplifies many others such as SDLT queries.
CPSE 7 is preferred to a CPSE 1 in situations such as a share purchase transaction, the assignment of a lease, a grant of a new lease or when a commercial property being leased is unoccupied at the time etc.
A Landlord may feel inconvenienced by having to complete multiple CPSE forms. Therefore, it may be welcome news that a landlord is not legally obliged to complete a CPSE and does not have to provide the prospective tenant with CPSEs if they request them. However, providing CPSEs upon request can help establish a beneficial relationship between the landlord and the tenant at the beginning of the tenancy.
That said, Landlords must be aware that if they complete CPSEs, the answers which they have provided will be viewed as statements of fact or law. If those statements are incorrect, inaccurate, or intentionally or unintentionally misleading, the landlord can be sued by the tenant for damages for misrepresentation and the tenant can rescind the contract.
Where a landlord’s initial statement is revealed to be inaccurate, the Landlord must update the statement in their CPSE Form to reflect the change.
How can Pure Business Law help?
We are specialist Commercial Property Solicitors based in Bedford and operating nationally. As Commercial Property specialists we will protect your commercial property rights and resolve any disputes which may arise.
If you would like to discuss any issue raised in this article or any lease transaction or commercial lease dispute please contact us and speak with one of our solicitors. Pure Business Law is regulated by the Solicitors Regulation Authority and is a licensed member of the Law Society of England & Wales