With commercial real estate properties

IDA Uzair Article
Created by IDA Uzair Article Feb 29, 2020

When you inspect a commercial, retail or industrial property, it is the physical aspects of the property that should be well explored and documented. These matters below are some of the key issues for you to review before you complete the property listing or promotion.

  1. Tenant compliance to physical building use: The tenants to a building may be obliged to undertake compliance to the way in which they use the building. Such matters will be detailed in the lease. You should read the leases in this regard to identify these things.
  2. Antennas and aerials: Some buildings feature communication antennas and aerials. In the first instance these should have been approved by the landlord and in some circumstances Costa Del Sol Property For Sale the local planning authority. The antenna or aerial installation will have been made on the approved structures with supporting plans and documentation together also with access restrictions and risk signage to prevent people in the area being exposed to radio frequency radiation. You need to know that these things have been correctly handled.
  3. Asbestos: It is common knowledge that asbestos is a hazardous building material that still exists in buildings constructed prior to 1990. From that time onwards, it was largely avoided and prohibited as a construction material in most buildings. Originally it was used as an insulation material in areas including electrical switchboards and also on the beams and columns of the building structure as a fire resistant material. It is therefore quite possible that you will sell or lease a building in which asbestos is still located. In your town or city there will be legislation rules and regulations that apply to the existence of asbestos. It is necessary that you get information from the building owner regards compliance to Legislation in this regard.
  4. Asset replacement value: With commercial real estate properties, it is common for regular valuations to be undertaken by the building owner for insurance purposes regards asset replacement. This type of valuation would be applicable in the event of a fire or building disaster. You can also get building replacement values from information sheets provided by local quantity surveyors. You can usually obtain these from the internet. Importantly the construction costs and replacement value need to be applicable to your location given the costs of sourcing the construction materials and the labour.
  5. Building Code Compliance: When buildings are first constructed they are done so to the current building code. As time progresses the building code changes and it is sometimes necessary for existing buildings to be upgraded to current code. A good example of this is the need for disabled access to buildings and internal disabled facilities. When you inspect and list a building you should identify if any such notices under the building code currently exist. A note of caution here; when a building is put through a major refurbishment, the planning authority may regard the refurbishment activity as a trigger for a code compliance upgrade. This can be a large cost. A quantity surveyor is the best person to consult on costs of this nature.
  6. Floor and site surveys: When working with investment properties it is the internal lettable space that is of prime importance to the generation of rental and occupancy. All the leases for the tenants will be linked to the survey plans and the net lettable area therein. For this reason you should ask to see the survey plans for the building and the lettable space. You need to know that they are accurate and up to date at the time of sale or lease. Part of this process is to inspect the property with the plans so that you can identify any discrepancies. In all cases of error or concern with the plans you should get a building surveyor to give assistance and guidance.
  7. As Built Drawings: Every building has a set of plans that were approved for the building to be constructed. They are a great source of information and cover, structural, hydraulic, electrical, mechanical, and lighting layouts. They are an excellent source of information on which you can base your leasing strategies.
  8. Building approvals and permits: Does the building still comply with the original building permit issued by the building authority? Most particularly does the use of the property still comply with the approval as granted? It pays to get a copy of the current building approval when possible because a wise purchaser or tenant will want to see it.
  9. BMU: This stands for the 'building maintenance unit' and is likely to exist in multi level buildings. The BMU is the device that hangs over the side of the building to clean the exterior and the windows at different times of the year. Importantly the BMU has to be safety compliant and also approved for use. When you know that the building has a BMU, it is wise to ask about its use and approvals.
  10. Certificates of Occupancy: When a building is first constructed it is inspected and certified for occupancy. The certificate of occupancy is granted by the local building approval authority. From that point onward the occupancy of the building must comply with the approval guidelines. It is possible that the certificate of occupancy can be withdrawn at any time if the building is deemed unsafe or has been damaged. It is therefore something that you would question if doubts about the building exist. In such circumstances get a copy of the certificate of occupancy.
  11. Development Approval: When property development is a consideration on the property, seek copy of any existing development approvals. They will stipulate the type of development that has been approved, the elements needed to comply with the approval, and the time line. Properties with existing development approvals may be attractive to purchasers that want to undertake new construction and property developments. You will also need to know if the development approval is transferable with the property to a new owner.
  12. Disability and Discrimination Notices: Whilst the commercial property is simply a building constructed at a certain point in time, it is possible that it does not now comply with the current disability access codes and access provisions for buildings of that type. You need to know if any orders have been applied to the building by the building authority for compliance to new disability codes. If any orders exist, it is likely that they will have to be discharged prior to any building sale or lease.
  13. Electrical Services: All electrical services in the commercial property must comply with current standards of electrical installation and maintenance. In such circumstances a contractor will normally be undertaking inspections and maintaining a log book for this purpose. If in doubt (and particularly with older buildings), call in an engineer to advise. Thermal scanning of switchboards in older buildings is a good practical processs to identify if matters of breakdown and heat could exist.
  14. Electromagnetic Radiation (EMR): In some properties EMR can be generated from plant and machinery (such as the power feed for lifts or mobile antennas on the roof of the building). This then becomes a safety issue for people on site and also will be notable in the poor or erratic performance of sensitive electrical devices such as computers. When this problem is noted it is necessary to involve engineers to advise you. It is also common for barriers to be installed in the area that is involved in EMR.
  15. Environmental Risks: In most locations there will be a register of contaminated sites and properties that do not comply with the environmental guidelines. Ask about this when looking at new properties. The most common issues in this regard are tanks in the basement that were used to store heating oil or diesel. They may be now redundant but they are regarded as an environmental risk and will need to be remediated.
  16. Essential Services Certification and Compliance: All buildings need to be compliant with fire safety regulations. This can include, sprinklers, smoke detectors, smoke dampers, exit routes and signage, evacuation plans, fire hoses and hydrants, and the list goes on. Importantly all of these essential services systems in a building are regularly checked for compliance by qualified tradespeople. The results of the regular tests are maintained in log books on site. It is wise to question the compliance and checking process. It is something that can hold up sale and settlement.