Technical Due Diligence
When you buy a property, you want to be sure your investment is sound. When you sell, you want to know that nothing will adversely affect the sale.
Buyer or seller, it pays to know as much about a property as possible. And that’s where due diligence comes in…
Buying? What a Due Diligence Survey can tell you
A due diligence survey is a more in-depth inspection than a full building survey. The building is scrutinized to make sure that it’s fit for the use you want to put it to, and that it can accommodate your short and long term plans. It warns you of any future cost commitments, and of any operational issues. A due diligence survey puts you in a position to negotiate on price if something is identified that materially affects the value of the property.
Here are just a few things that can be assessed as part of a due diligence survey:
- How energy efficient is your building? What can you do to reduce energy costs? What about the carbon footprint? Can you improve its green credentials?
- What statutory undertakings will the property involve you in? What are the implications of these?
- What is the life expectancy of the mechanical and electrical installations? Will the boiler last 5 years? 10? How efficient is it now?
- Will you be able to adapt the property in a way that works for you? Could you make it open plan? Will existing features prevent you making changes?
- Is the building suitable for any future extensions? Can the structure stand another floor? Are planning issues likely to arise?
- What are the financial implications of any tenancy agreements or leases? Who is liable for repairs and alterations?
Selling? How a Due Diligence Report can help
A due diligence report gives you an independent analysis of the property. That way you can be sure that the purchaser isn’t going to come across a problem that affects the sale, delays completion, reduces the selling price or even Breaks the deal
Just some of the questions a due diligence report can answer:
- Are there any existing or potential defects that could reduce the value of your property? What action can you take?
- Is all statutory certification in place?
- Are all the planning conditions satisfied? Have any restrictions been contravened?
- Have any breaches to legal conditions or covenants occurred?
- Have any changes in legislation affected the property?
- Is the building in order from a health and safety perspective?
The question is not whether you can afford to have a due diligence survey, but whether you can afford not to?
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