- Always invest in a full structural survey. This may be costly and is sometimes hinted at being un-necessary, but it could save a lot of money, time and heartache in the long term. Spending a few hundred pounds here can save thousands of pounds later on
- Take photographs of all the rooms. Do not rely on memories of sizes and decorations of rooms. Make a full ‘Inventory List’ including all items in public areas, dining room, bedrooms, bathrooms, kitchen (including all appliances – all to be in good working order and with relevant certification) is completed. Estate Agents should provide the comprehensive Inventory List that should be passed to your solicitor.
- Check where all the meters, stop taps, and important switches are located
- When purchasing an accommodation business, it has to be appreciated that it is an on-going business, and therefore deposits paid on future bookings will have been accepted. Ensure that these are identified carefully, and dealt with separately from the purchase price
- If the business has accepted bookings in advance, you do not have to honour these bookings as they may relate to a market segment you do not wish to cater for as a new owner. If this is the case, you or the vendor should write to all the relevant people making the booking and explain that the property has been sold and return their deposit. Make sure you have copies of these letters. If you do accept the bookings, then the deposits should be passed to you, by the vendor, and you must honour the booking at the agreed rate. It would also be a courtesy to inform the party that the property has changed hands, and that their booking at the agreed rate is confirmed. If in doubt, speak to your solicitor
- Past registration cards are the property of the business and should be included in the sale transaction, as the owners are legally bound to keep them for 12 months. These also form part of the ‘Goodwill’. There should also be documentation in addition, listing names and addresses of all previous visitors, as these will form part of your new business database for future use in marketing
- Before purchasing, ensure that you see evidence of revenue/turnover figures authenticated by a certified accountant for up to three years if possible. Your lender will also need to see these.
- Your solicitor should be able to help you with ‘grey’ areas such as ‘Goodwill’ and ‘Fixtures and Fittings’. It is always advisable to use local estate agents; local solicitors; local financial institutions and local accountants as they understand the vagaries of the local tourism industry, and are far more likely to see and investigate suspect declarations, than a novice to the industry.