Pre-acquisition surveys: Failure to prepare, prepare to fail

A property survey or pre-acquisition survey provides a prospective occupier or buyer of commercial premises with an in-depth analysis of the building that they are proposing to lease or purchase.

Undertaking a pre-acquisition survey is vital, no matter how seemingly straightforward the lease terms for your premises might be, or how new the building you are acquiring is.

However, it continues to surprise us how many people either do not undertake a survey of the premises they want to lease or buy or leave it until the very last minute.

So why are pre-acquisition surveys so important? What do property surveys provide you with? And how can a property survey protect you in the future?

Nicki Rought, a Senior Surveyor in our Building Consultancy team, explores.

What is a pre-acquisition survey?

A pre-acquisition survey is part of the due diligence process when you either lease a commercial building such as office or industrial premises, or you are buying commercial real estate.

The report provides you with an assessment of the condition of the building and identifies risks and costs that could be incurred.

Why is a property survey important?

“Getting a RICS-qualified commercial property surveyor to undertake a survey of the building will enable you to make an informed decision about the level of risk you might be taking on If it is leasehold, it will identify your potential liabilities at lease commencement.

It is also particularly important to understand the building’s services and energy efficiency so that you know how the building performs from a sustainability perspective.

For example, if the unit you want to lease is unlikely to meet the requirement for an EPC Rating of at least a B by 2030, what potential impact could this have on you from a service charge perspective if your landlord undertakes works to improve this during your lease term?

Avoid unwanted surprises

Even if you lease a floor within a building and you have an internal repairing only lease, there will likely be a service charge percentage in your lease for any works carried out to the building’s common parts.

This can include the roof, common areas, heating and ventilation.

That is why it is important to get a property survey which covers the condition of the whole building – or at least some commentary on it.

This will help you to understand how well maintained it is or if there are any potentially major issues that might affect you throughout your lease term, such as a requirement for a new roof, for example, as this could affect how much you will pay to the landlord under the service charge.

Failure to prepare, prepare to fail

More often than not, we are approached for property surveys quite late on in the leasing or acquisition process.

However, it is important to think about commissioning a survey early on in the process, once your legal team has confirmed the repairing obligations of the proposed lease.

From survey to planned maintenance programmes and the project management of potential works, our RICS-qualified surveyors can help.

We will undertake the pre-acquisition survey on your behalf and provide you with a detailed report to inform your transaction – whether leasehold or freehold.

As part of this, we will carry out an in-depth analysis of the building condition, including its M&E and are able to work with trusted consultants for more complex M&E systems as required.

For help and support with your commercial property survey needs, get in touch with our team of building surveyors.