commercial building surveys
Is the commercial premises you are buying or renting value for money?
We offer a full building survey for commercial premises from our Chartered Surveyors and this is imperative if you are taking an FRI lease. You must know what costs and repairs you might face. It would also be important evidence later if your landlord tries to pursue dilapidations or other repairs.
Buying or renting, you need to know the condition and the repair or maintenance costs before you enter into a binding agreement.
An FRI lease will normally require you to maintain the property in good repair and put it in good repair if it is not at the beginning.
Perhaps the lease may say you do not have to return the premises to the landlord at the end of the lease in better condition than they were at the beginning. In all cases, you need clear evidence of the condition of the building when you took it on. A survey provides this. A schedule of condition attached to the lease if this can be negotiated with the lessor is a safeguard for later.
What does a building survey cover?
A building survey carried out by a Chartered Building Surveyor will determine the condition of a building, analyse the full extent of any defects and can additionally, if requested, provide budget costs to rectify the defects. The findings of the survey will not only be a material factor in the decision whether or not to buy or take on the lease, but may also provide useful ammunition in negotiations.
Service installations will normally form a separate part of the report. This will deal with the statutory services to the property, the condition of equipment and its likely future life.
You need to tell your Chartered Surveyor the reason for the survey and its scope.
A Chartered Surveyor would not report in detail on the heating, electrics or the underground drains, for example. Generally services are expensive to install and to maintain. Their condition can form a substantial part of the investigation into the overall suitability of the property for a purchaser.
If you want these items covered tell your Chartered Surveyor, who can arrange to bring in the appropriate experts
Other items normally excluded, but where sampling and testing may be included if needed, would be the presence of damaging (technically, deleterious) materials such as high-alumina cement. Specialist surveys are available to cover asbestos and the terms of the Disability Discrimination Act.
How is the survey done?
It starts with a visual inspection of the building. The usual pattern is to take it top to bottom externally, then top to bottom internally. The Chartered Surveyor will inspect floors, walls and ceilings and will be looking for signs of settlement, damp or timber decay. They note the state of roof coverings, gutters and downpipes and the condition of doors or windows that may be approaching the end of their useful life.
Your Chartered Surveyor is noting not only the present condition and any immediate repairs but also what needs attention in the foreseeable future, often with an indication of the probable cost.
What if I lease only part of a larger building?
The survey should not only cover the part you are planning to lease, but also take account of the condition of the building as a whole. The cost of repairs to common parts may be spread among the different tenants.
If the occupier is to take a lease, the surveyor will need to see a copy of the existing or proposed lease so that he may report on the repairing covenants to determine the liability for any repairs recommended in the report.
There are two basic types of lease:
In a full repairing and insuring lease, the lessee is responsible for all repairs to the property. This type of lease is usual when the tenant occupies all of the building.
An internal repairing and insuring lease provides for the tenant to be responsible for all the repairs to the internal fabric - and the landlord for the external repairs, plant and machinery (for example boilers and lifts). Leases of this kind are usual in multi-tenanted buildings.
The cost of a landlord's work in connection with repairs to the building is normally charged to the tenants in the form of a service charge. The tenant is normally liable for a share of these costs, which are calculated pro rata on the floor area of the building that he occupies.
Even if a capped service charge exists, it is sensible to instruct a surveyor to inspect and survey the property to establish if the service charge is set at a realistic level.
Repairing covenants by their nature impose obligations on a lessee, which, on the termination of the lease, can be financially onerous. A surveyor will be able to advise in respect of future liabilities under schedules of condition and dilapidations, which may be imposed or served by the landlord.
In the case of a provision in the lease that a tenant need not keep or leave the property in better condition than at the beginning of the lease, a schedule of condition should be agreed between the parties. Facts should be recorded in a logical, clear and concise fashion. Plans and photographs may be used to supplement the schedule.
What will the survey report tell me?
Your Chartered Surveyor's report will describe each element of the property: roofs, walls, floors etc. It will also note the items that have not been covered, such as deleterious materials (unless you have requested this). They will, however, note anything they spotted that gave cause for concern and will suggest that further investigation is needed. Your Chartered Surveyor will also note anything they were unable to survey.
May I use the survey report for any purposes?
No. The report is confidential to you, as the client, and to your professional advisers. It will exclude any liability to third parties who make use of the report without the Chartered Surveyor's express permission.
How can a Chartered Surveyor help with planning maintenance?
Your lease probably needs you to keep the premises in repair and may impose a timetable for internal and external decoration.
Your Chartered Surveyor will be able to help you in preparing a maintenance schedule both of day-to-day items and of other items that need attention at longer intervals. Your Chartered Surveyor will add a brief inspection every couple of years.
Sticking to this schedule may save you extra expense later and help you to budget more efficiently over the lease.
A schedule of dilapidations sets out the state of disrepair in a property where there is a legal liability on the tenant for the condition of disrepair. The tenants liability to maintain and repair certain parts of the property will be defined in the lease.
The Building Survey Report will establish the property's repairing liabilities actual and potential. It will also determine whether there are any major defects which would indicate that the potential occupier should decide against taking the property on at all.