Having undertaken numerous Technical Due Diligence surveys for both vendors and purchasers on commercial properties, we have been thinking about oversights typically seen during the building due diligence process which may not be deal breakers, but can be easily avoided. This is by no means an exhaustive list and each building presents its own unique issues, however, an owner who is looking to sell should be mindful of the following aspects from the perspective of a surveyor.
Clean the Plant Room
The plant room is typically the first area to be visited during an inspection. Plant rooms are important places and the mechanical and electrical team will be in there for a long time which also means the rest of the due diligence team will be looking around in depth. If the plant room is clean, tidy and well organised, it can send out the notion that the building is being well maintained and well managed by the current owner. Of course, an experienced technical team will unearth any problems which may hide beneath, but the power of first impressions should not be underestimated. Think; if you were selling your house, you would always clean and tidy it before a viewing. Why should it be any different for selling a commercial property?
Up-To-Date Statutory Testing/Documentation
It is both frustrating and alarming for the due diligence team to be supplied with statutory testing and documentation which is out of date or not what you have asked for or require from the vendor. Again, this indicates to the team and the potential purchaser that the building is not well maintained or managed. Before putting the property on the market, ensure that all statutory testing is up to date and easily accessible. This will ensure that the deal is not held up whilst waiting for statutory testing to be completed. Having this information in place and easily accessible will also avoid any embarrassment for the building manager!
Clarification of Structural Issues
Structural issues in buildings tend to spark fear in potential purchasers, leading to serious concerns of excessive costs and failure of the building. Whilst this is often not the case and a building consultant or structural engineer will (usually) be able to diagnose the problem and propose a suitable repair to the vendor; it is something that should be addressed by the building owner before presenting for sale. If there are any structural issues, particularly those which are immediately visible in the building, we would recommend these are identified and understood with a structural report and subsequent monitoring or suitable repairs undertaken before putting the building on the market. This approach will avoid protracted negotiations and discussions during the due diligence period which may end up reducing the value of the building and could have been easily avoided by addressing the problem early.