Executive Summary
- A Building Survey by Signal Surveyors will provide the client with the key information to conclude their property negotiations to their commercial advantage.
- The Survey will identify the building defects, the costs of repair and other costs associated with the lease and statutory compliance.
- The Building Survey will repay the modest initial outlay many times and put the client in the best possible position to make tactical and strategic business decisions.
- Signal Surveyors also can analyse building defects, identify the most cost effective repairs and supervise the repair works.
The unfortunate truth is that the vast majority of key decision makers who are about to take out a commercial lease, or purchase a commercial property, do not commission a Building Survey setting out the major defects and the associated costs. Similarly the party leasing or selling the property probably haven’t done so either.
Not many people would buy a house without carrying out some sort of Building Survey and it is the norm. Clearly it is very prudent, when making such a huge personal investment, to find out from an expert whether the property in question is in good condition and worth what you are paying for it. Strangely there is no such tradition in commercial property, but perversely the sums involved in commercial property are far greater than those normally associated with residential property.
Signal Surveyors believe that a Building Survey carried out by a Chartered Building should be an essential part of any commercial property transaction because it can save considerable amount of time and money.
By way of an example let us proceed from the point of view of a prospective purchaser or tenant. Let us presume you have identified your ideal property and the Landlord’s agent has indicated the property is available and the level of rent. However time is short as your existing lease is to end shortly. Consequently you have commissioned a full Building Survey from Signal Surveyors and you are now in a position to enter negotiations with the landlord/vendor to finalise the deal. With the information from that survey you can now:
- Be clear on the state of repair of the building and how much it will cost to put in repair. This should be reflected in the Rent free offered by the Landlord.
- What will need to be done to adapt the building for your business and how much this will cost. This can be partly reflected in the rent free period but also influence the terms of the lease to your benefit.
- Understand the long-term cost of ownership from an ongoing maintenance point of view.
- If you propose to take out a long lease, you will understand the costs associated with your lease obligations.
At the Signal Surveyors we are continually surprised at the number of prospective tenants and purchasers entering negotiations without the basic cost information which can have an absolutely fundamental bearing on the cost to your business.
But why have a Building Survey if you are the Landlord or Vendor? From our experience the landlord and tenant have often reached an outline agreement and the Landlord’s Agent, having gone away assuming the deal has been done, is then surprised and disappointed with the tenant comes back with their own Building Survey asking a reduction in price/rent. The landlord would have been much better advised to carry out his own Building Survey and give that to the tenant prior to the negotiations. Under these circumstances it is much more difficult for the tenant to come back and “chip the price”.
So with this example in mind Signal Surveyors would suggest the following simple process to maximise the information available to make the correct business decision:
- Arrange for a “Summary Building Survey” to be carried out by Signal Surveyors on a portfolio of potential properties. This would set out the pros and cons of each individual location with special emphasis on any business critical parameters such, serious defects, floor loading or eaves height. Also fit out cost, potential dilapidations liability, on-going maintenance costs can also be estimated at this stage.
- This information can then be used to identify the most likely building to be leased or purchased which can then be subject of a more exhaustive Full Building Survey to give peace of mind. This survey would address a more extensive range of parameters and might include for instance a drain survey and the hire of a cherry picker a closer examination of the roof covering.
- The final stage is to use the detailed “Full Building Survey” to leverage the best possible deal for the incoming tenant or potential purchaser who can negotiate with the full knowledge of the costs.
Clearly is not always possible to have a portfolio of buildings to choose from, and sometimes, due to circumstances beyond anybody’s control, there is only one choice of building. However using the methodology we have set out above, it is possible to use a Building Survey to add valuable information to the management decision process.
The Building Survey also has other uses than just negotiating a reduction in the rental or purchase price, and can be used as a basis for planned maintenance and setting budgets for repairs to the building in the coming years. Indeed the survey can be used to ensure that the maintenance is carried out in such a way as to save money by carrying out works only when needed and grouping the works in such a way as to achieve economies of scale.
Signal Surveys have also specialised in identifying and repairing what appear to be insoluble building defects. We have the experience and equipment to identify the defects, specify the repairs and supervise the contractors carrying out the repairs. This can be very relevant for lease holders with onerous repairing liabilities or when the choice of building is limited.
In summary, Signal Surveyors can provide you with an impartial Building Survey of any commercial property, carried out by an expert chartered Building Surveyor, setting out the essential parameters that will influence the terms of the lease or purchase price. We can also analyse building defects and identify the most cost effective repairs. We would be delighted to hear from you.
