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BLOG: Commercial Property Purchase Checklist
There are many reasons why buying commercial property is a good bet. If your business is to be based in the building, buying it means you are free to make alterations without the consent of a landlord, it gives you security for the long-term and it can make very good financial sense if you buy the property and lease it back to your business.
With all these positive reasons, if the opportunity to buy a commercial property comes up, it can be tempting to plough ahead. But buying commercial property can also carry significant risk – especially if you don’t take the time to thoroughly investigate its condition and do your due diligence before proceeding.
So what steps should you take to ensure you don’t get caught out?
Assess the property’s condition
Because of their nature as places of work, commercial properties aren’t always maintained as well as homes. In addition, many commercial buildings have features – such as shallow pitched roofs that aren’t visible from ground level – that can easily fall into disrepair. Having a Pre-Acquisition Building Survey Report undertaken on a commercial property can identify issues with the condition of the property that will either need addressing urgently or in the near future. If any significant repairs are identified, you might be able to negotiate for these to be repaired by the current owner or else secure a discount on the purchase price.
Let’s go outside…
A commercial property will usually have some grounds that come along with it and if it’s a large building, might encompass a car park or forecourt. Check that the external grounds are clearly defined, the boundaries are secure and surfaces are in a good condition.
Business owners have a duty to their employees, customers and contractors. There are a number of other compliance issues that may be important to business owners that aren’t always considered until it’s too late. A survey is not just about condition and can help to highlight these issues to a potential purchaser. Before buying a property you should ask yourself: Does asbestos exist? Is the building DDA compliant? Have you reviewed the energy efficiency? Is there safety glass?
Have you arranged checks on electrical safety? Do the heaters work? Are the gas safety / air conditioning checks up to date? Is there a lift or automatic doors? Are there water tanks and Legionella risks? Is the lighting compatible with computer screens? What about lightning protection? The list goes on and on. You will be surprised how many things a survey might pick up.
As Chartered Surveyors, it is surprising how often we come across incorrect sizes stated in the agent’s particulars for a property. You don’t want to be paying for square footage that doesn’t exist so always double check the property’s measurements.
Getting a Chartered Building Surveyor to carry out a good assessment of the building before you buy it is well worth the investment. The building needs to be right for many years to come and it’s much better to be aware of any existing or potential issues than have these come to light at a later date.BACK TO NEWS