Commercial building surveys are thorough, in-depth property inspections, carried out by professional building surveyors to assess the condition of a property. They are used to identify defects, maintenance problems and future repair obligations, so that potential buyers, occupiers and investors can identify what might need to be fixed and how much it could cost.
Purchasing or leasing a commercial property is a significant undertaking, so getting a building survey can offer reassurance and can help to reduce financial risks and legal obligations. There are many different types of building surveys to serve different purposes, so we have outlined some of the most common types of surveys.
Building condition surveys
A building condition survey is an inspection of the physical condition of a commercial property. A surveyor will look at the building fabric, structural elements and building services, such as heating and electrical systems. It gives an overall picture of the current condition of a property, outlining defects, deterioration and maintenance issues, as well as the repairs that will be needed to restore the building to a satisfactory condition and keep it legally compliant.
A building condition assessment does highlight the current defects in a property, but is mostly used as a way to assess how the defects will affect the building in the future. The surveyor will write a detailed report after the inspection, which will include a list of fixes in order of priority, from immediate fixes to long-term repairs. These surveys identify liabilities before they become major problems - as proactive repairs are typically less expensive than reactive ones - and allows owners and occupiers to budget accordingly.
When is a building condition survey needed?
Building condition surveys should always be carried out before purchasing or leasing a commercial property.
For owners: An assessment will help you to avoid unexpected maintenance costs, and supports effective asset management.
For occupiers: Condition surveys can protect against dilapidations claims, as landlords may try to claim for pre-existing defects at the end of your lease.
For investors: Condition surveys will give you a better picture of your investment, as the survey will provide a solid, factual basis for acquisition decisions, and will help you understand future risks.
Schedules of condition
A schedule of condition is a detailed record of a property’s condition at a specific point in time. In most cases, it is used at the beginning of a commercial lease to record the condition of a property before tenants move in, to prevent them from being held liable for repairs that aren’t their responsibility.
The report will usually comprise written descriptions of the state of the property, alongside photographs, to make a record of any defects, damage, or general wear and tear. Schedules of condition cover both the interior and exterior of a property, including structural elements and fixtures. The report will also include an inventory detailing any equipment or items currently in the property, and the condition they are in.
The primary aim of a schedule of condition is to protect tenants from being made responsible for damage and defects that existed before they moved in. For commercial properties, this is especially important, as many leases are granted on a Full Repairing and Insuring (FRI) basis. This means that tenants may be responsible for the maintenance and repairs of the property for the duration of their lease. Some leases require tenants to return the property in a better condition than they found it in, whilst others ask that it is returned to its original state.
Either way, without a schedule of condition, tenants might be faced with hefty charges to repair the property, even if it’s pre-existing damage. A schedule of condition can be attached to the lease to limit your liability as an occupier.
When is a schedule of condition needed?
A schedule of condition is needed before signing a commercial lease or during lease negotiations, particularly if it’s a FRI lease. For older properties with existing defects, a schedule of condition is particularly important, as there is likely to be more damage.
Dilapidations advice
Dilapidations advice concerns the obligations in a commercial lease around repair, maintenance, decoration and reinstatement of a property. After a lease has ended, landlords assess whether or not they believe the tenants have followed these obligations. If they think that they have been breached, a landlord can issue a Schedule of Dilapidations, which will explain the alleged breaches and how much it will cost to fix them.
The job of a building surveyor in this process is to offer advice to either the landlord or the tenant. For landlords, a surveyor might prepare the claim and estimate the cost of repairs, whilst for tenants, they can review the claim to assess if the works are needed, and negotiate on their behalf.
When is dilapidations advice needed?
If a tenant is nearing the end of their commercial tenancy, they might seek dilapidations advice, as it can help to reduce liabilities and unexpected costs. For landlords, a surveyor can help to recover repair costs when there is a legitimate claim. Both tenants and landlords might seek advice to understand their financial position before the lease expires, because dilapidations claims can easily run into thousands of pounds.
Pre-acquisition surveys
A pre-acquisition survey is an inspection that is carried out before buying a commercial property. Also referred to as a Technical Due Diligence Pre-Acquisition Survey, it is an in-depth inspection of a property before purchase. It assesses the building's condition, potential risks, compliance with regulations, and future maintenance costs, to help buyers make informed decisions and avoid unexpected liabilities post-acquisition.
A TDD survey gives a full picture of the physical condition of a building, so that potential buyers know exactly what they are buying and if there are any hidden risks associated with it.
When is a pre-acquisition survey needed?
Before completing the purchase of a commercial property - whether it’s an investment, a development opportunity or for owner occupation - a pre-acquisition survey should be carried out. The findings from the survey can be used to help a potential buyer decide if they’d like to go ahead with purchasing the property, or as a basis for negotiating the asking price or requesting repairs.
Measured surveys
A measured building survey is conducted to record the dimensions, layout and structure of a building. It uses 3D models or detailed drawings to capture the physical elements, including internal floor plans, external elevations, cross sections, roof plans and ceiling plans. Surveyors use advanced tools like laser scanners and digital imaging equipment, which is then processed using a specialist software to create accurate plans and models. These can then be used for design proposals, planning applications, construction works and building management.
Measured surveys use professional instruments and modern methods to ensure high levels of precision, which is crucial for projects that require a high level of accuracy and detail. These can then be passed to architects, engineers and designers to allow them to plan works accurately.
When is a measured survey needed?
Measured surveys are usually needed ahead of fit-outs, redevelopment projects, refurbishment projects or building extensions. Many buildings - particularly older commercial buildings - have outdated plans, but architects and developers need them before they can carry out their roles. Any project that needs accurate measurements and information about a building’s dimensions and layout will need a measured survey.
Drone surveys
Drone surveys are becoming increasingly popular for the evaluation and inspection of buildings. Also known as unmanned aerial vehicles (UAVs), drones can capture high-quality images of areas of a commercial property that are otherwise difficult or dangerous to access, such as roofs, gutters or cladding systems.
Previously, scaffolding, cherry pickers or ropes would be used to give surveyors access to restricted parts of a building, but this can be risky. Using a drone allows detailed photos and videos to be captured in a far more safe and efficient way. Drones can also be used for thermal imaging, detecting heat loss and water damage that can point to wider structural issues. Plus, drones are far less disruptive than setting up scaffolding, and are preferable from a safety standpoint.
When is a drone survey needed?
If a commercial property has restricted areas or would need specialist equipment to access it, a drone survey is a far more convenient option. They are particularly useful for warehouses, factories, office buildings and distribution centres that would be harder to gain access to. A drone survey can also be used as part of a building condition survey, as it can help to identify structural issues.
Building reinstatement cost assessments
A building reinstatement cost assessment (BRCA) estimates the cost of rebuilding a property from the ground up if it was destroyed by an insured event, like fire or a flood. It includes the current cost of construction materials, labour, professional fees and compliance with modern building regulations. This figure is then used to calculate the appropriate level of building insurance, disregarding the market value or land cost. This makes sure that the figure used for insurance purposes is accurate and reflective of real risk.
When is a BRCA needed?
Reinstatement costs are usually commissioned when property insurance is being renewed or arranged. It is also recommended after refurbishments, extensions or improvements, as this will push up the rebuilding costs. Property owners should update it regularly - we suggest yearly - to allow for inflation and the uncertainty of construction costs, as it keeps the value up to date. A building that is insured for less than its true cost might leave the owner liable to pay for part of the rebuilding themselves, which can be incredibly expensive.
Make better commercial property decisions with Anderton Gables
Not sure which type of building survey you will need for your commercial property? As an RICS-regulated firm, Anderton Gables’ building surveyors are here to offer no-nonsense advice and support, so before you make your next property decision, talk to our team.
