Different types of commercial building surveys explained

If you are thinking of buying or leasing a commercial building, you may feel a little overwhelmed at the process and your responsibilities. You may have heard terms such as ‘schedule of condition’ and ‘measured building surveys’, but it can be tricky deciding if you need a survey and if so, which one.

Different surveys are designed for different situations and points of a purchase/lease, and we are here to help you navigate this process. Let us take a look at the different types of commercial building surveys and when they are needed…

What is a commercial building?

A commercial building is a property owned/rented with the intention of making a profit, such as shops, restaurants, hotels, offices, apartment buildings, industrial units, or warehouses.

When do I need a commercial building survey?

It is essential to conduct thorough, relevant surveys before entering any contracts or carrying out major works. Failure to do so could result in unforeseen issues and unexpected expenses further down the line.

The benefits of getting a survey:

  • Informed decision-making
  • Negotiating leverage
  • Planning for maintenance
  • Avoiding unexpected costs
  • Protection of the purchaser’s / tenant’s interests

Types of commercial building surveys

There are a few different types of commercial building surveys which are required in different situations and target specific outcomes. They are all the result of comprehensive property inspections that focus upon condition of the property asset, but they each have a slightly different focus. It is worth understanding the differences between the options so you can choose the right survey for your situation.

Type of building survey What it covers When it is needed
Schedule of condition A detailed ‘snapshot’: records the property’s condition at a specific point in time.

 

Most commonly prepared at the start of a lease, as a marker of the property’s condition. It is used to compare the property’s condition at lease end when determining if the tenant must pay for/fix anything according to the terms of the lease.

 

Schedule of Dilapidations Similar to a schedule of condition, it provides a highly detailed ‘snapshot’, focusing on the current condition of the property. It covers physical structure, fixtures and fittings and building services in terms of their state of repair, decoration, statutory compliance matters.

 

This survey is most commonly conducted at the end of a lease (‘terminal schedule’)although, in certain circumstances may be carried out during the course of the term (‘interim schedule).  It may, where relevant, be compared with a schedule of condition.  A dilapidations schedule supports a breach of contract claim made by the Landlord against a Tenant for damages arising from failure to observe the Tenant’s obligations stated within the lease.

 

Measured building survey An accurate survey during which many measurements are taken for the purpose of recording the arrangement of the property on scaled drawings such as floor plans, elevations or sections.

 

Measured building surveys serve a variety of purposes, establishing the true / accurate size of a property (for example, to establish rental value or in connection with a dispute between parties to a lease), or in connection with statutory consents (planning, Building Regulations) normally associated with proposed work to a property.
Technical due diligence survey A thorough investigation into the risks a buyer/tenant may face with a property. It focuses on the physical condition of the building, its services, fixtures and fittings as well as external areas, outbuildings, grounds and boundaries.

 

This survey should be carried out before entering into a legal commitment to buy/rent a commercial property.  The survey will identify current and anticipated future repair / maintenance issues to enable the purchaser / tenant to make a reasoned and informed decision to proceed.  In the case of a proposed lease, the survey will consider the obligations of the tenant under the terms of the lease.  The report can be tailored to include forecast repair / maintenance costs to assist the purchaser / Tenant in negotiations over the purchase price or may be used to agree an incentive / concession to the Tenant so that the cost of remedial work is accounted for.
Planned preventative maintenance survey (PPM) An analysis of a property’s condition to ascertain any repairs needed, how urgent they are and how much they are likely to cost.

 

A planned preventative maintenance survey is useful asset management tool at any point during lease/ownership of a commercial property. It helps the building occupier / manager to create a maintenance plan for the short and long term, allowing effective longer-term budgets to be established at an early stage to reduce the concern of future ‘unforeseen’ costs.

At Trinity Rose, we have years of experience carrying out the full range of commercial building surveys detailed able, helping our clients to negotiate transactions effectively; avoid unexpected costs and in turn, ensuring they enter contracts from an informed position.

Hopefully, this blog helps promote a better understanding of your options when it comes to surveys of commercial property.  We understand it can be tricky deciding if you need a survey and which is the most appropriate.  We are here to help you at every step.

Get in touch

If you have any questions or are ready to arrange a survey with a trusted Chartered Surveyor, please get in touch. Our friendly and highly experienced team will be happy to help.