Commercial Building Surveys

The acquisition of a commercial property, whether on a freehold or leasehold basis, should be accompanied by an in-depth understanding of the condition of the building or development. A building survey may therefore be required by any of the following stakeholders:

• Owners and/or occupiers of commercial premises, office suites, retail units, industrial and warehousing space etc.
• Leasehold owners/tenants of commercial premises who have a responsibility to maintain the property
• Investors and/or owners of property portfolios including residential blocks of flats and commercial developments

WHAT DOES A COMMERCIAL BUILDING SURVEY INCLUDE?

The purpose of a commercial property survey is to assess the state of repair of your property asset and identify any building defects. The results inform the client’s brief and future investment and spending plans, enabling short-term and long-term maintenance schedules to be planned effectively. Areas covered include:

• Assessment of the building’s condition prior to purchase or lease, identifying building defects and suggesting necessary repairs.
• Providing specialist advice on managing and supervising building maintenance.
• Giving up-to-date advice on building regulations and property legislation.
• Project management to ensure works are completed to schedule and on budget.
• Providing guidance on sustainable construction, energy efficiency and the environmental impacts of a project.
• Advising on health & safety, disability and disability-related matters.
• Preparing Schedules of Condition and Schedules of Dilapidations.

WHICH COMMERCIAL PROPERTY SURVEYS ARE AVAILABLE?

An understanding of the different types of commercial building surveys will help you choose the most appropriate solution for your property asset. Depending on the property, the lease and any plans you may have for the building, we can customise our commercial survey to suit your specific requirements.

BUILDING SURVEY

A Building Survey is a detailed report on the building’s physical and structural condition. It highlights any defects and advises on remedial works and future maintenance. The document will specify the building’s construction – brick, steel, reinforced concrete etc – and the presence of any hazardous materials such as asbestos. For commercial leaseholders, it is important to understand their future repairing liabilities and how this can affect lease negotiations, while freehold purchasers may use the survey results to renegotiate the sale price.

DEFECTS ANALYSIS REPORT

The Defects Analysis Report focuses on a specific building defect issue to provide further insights, outlining the cause and recommending actions to reverse any damage to the property. Structural movement and subsidence, damp issues and timber decay are the most common areas of investigation. Sometimes, previous misguided non-specialist advice will have led to the situation being made worse, requiring remediation.

SCHEDULE OF CONDITION

For commercial landlords and tenants alike, a Schedule of Condition is a useful, detailed benchmark report of the physical state of the property at a particular point in time. The report will contain photographs to document the original condition that the property will have to be returned to at the end of the lease term. Having a Schedule of Condition in place can avoid contentious litigation and can potentially save thousands in repairs.

SCHEDULE OF DILAPIDATION

A Schedule of Dilapidation is normally carried out by the property owner at the end of a lease to be able to establish the repairing obligations of the tenant and to resolve a potentially contentious situation without resorting to legal action. Where dilapidations are found to be considerable, our building surveyors can act as intermediaries in negotiations, either on behalf of the landlord or tenant.

Rent review on your commercial property lease

Rent reviews are a common occurrence in commercial property leases. Whether you’re a landlord or tenant, you’ll have to deal with them at some point during your contract. Every commercial property lease will be subject to a rent review at regular agreed intervals, usually every three to five years. The reason for a rent review is to allow the landlord to value the premises and review how much they charge for it, usually with a view to increasing the rent.

Why do rent reviews exist?

Basically, rent reviews are carried out so the figure the tenant is charged can be adjusted in line with current market conditions and the state of the property. Most commercial property leases contain an ‘upwards only’ rent review clause, meaning the rent can only increase or stay the same – even if market prices are falling.

When will I have a rent review?

In most cases, a commercial lease will contain a clause outlining when a rent review will take place. This has to be agreed upon by both parties involved. Due to leases becoming shorter, the intervals between rent reviews are now more frequent. Typically, a rent review is conducted every three to five years, which is the most common amount of time. In our experience, the best way to conduct a successful rent review is for the landlord and tenant to appoint their
own Chartered Surveyors to act on their behalf.

We at JRE Chartered Surveyors will act to negotiate on your behalf to achieve a favourable outcome minimising potential increases in cost.