JOB REFERENCE: XXXXXXXXXXXXXXXX PROPERTY REPORT … · 2014-10-22 · Remember with dilapidations everything can be negotiated. Our golden rule is ... To help you understand our Report

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JOB REFERENCE: XXXXXXXXXXXXXXXX

PROPERTY REPORT

XXXX

XXXXXXX

XXXXXXX

XXXXXXXXX

London. NW10 XXX

FOR

XXXXXXXX

c/o XXXXXXXXXXXXXXXXX

Prepared by:

XXXXXXXXXXXXXXXXXXXXX

INDEPENDENT CHARTERED SURVEYORS

——— Marketing by: ———


All rights reserved. Reproduction in any form without express written consent of 1stAssociated.co.uk is prohibited

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CONTENTS

Introduction page 3

Synopsis page 4

Report Format page 6

Summary of Construction page 7

Executive Summary page 10

Summary Upon Reflection page 24

Report Information page 25

Facilities page 28

Limitations page 30




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INTRODUCTION

We have been instructed to inspect and prepare a Property Report and

Schedule of Condition for XXXXXXXXXXXXXXXXXXXXXXXXX. We

inspected the property on XXXXXXXXXX.

The Property Report gives you advice on what we consider are the key

property issues. The Schedule of Condition relates to the lease you are

considering and helps protect you against future liabilities from dilapidations

claims if legally appended to the lease. Dilapidations defined:

Dilapidations is a legal claim against you regard to the covenants

within your lease which you have not kept to the standard required

by the lease. The covenants typically divide into Repair,

Redecoration, Reinstatement and Statutory Regulations. Your Legal

Advisor should fully inform you about Dilapidations claims.

Full Repairing and Insuring Lease

We assume the property is being let on a standard Full Repairing and Insuring

Lease (known as a FRI lease) and that any unusual or onerous clauses will be

brought to our attention by your solicitor before legal commitment to purchase

the lease.

Always Negotiate

Remember with dilapidations everything can be negotiated. Our golden rule is

always to negotiate slowly and carefully as what is agreed at the start of the

lease is generally what any future negotiations are based upon so it is so

important to get it right at the start.

Existing Dilapidations Liability

We assume the existing dilapidations liability will be met/carried out by the

existing leaseholder. The Schedule of Condition that we’ve forwarded to you

is often part of a negotiations process and it may be queried/challenged by the

leaseholder and/or the freeholder/landlord and their agents and representatives.

We are more than happy to work with you during this negotiation process.




4

This work has been carried out as per our standard Terms and Conditions of

Contract, which have been emailed to you as part of the confirmation of our

instructions. If you would like further clarification please do not hesitate to

contact us.

SYNOPSIS

SITUATION AND DESCRIPTION

This building is set within an industrial estate area located opposite the railway

station. The commercial property is at the end of industrial unit comprising of

offices and warehouse/assembly area within a block of three industrial units on

a sloping site.

There is some parking outside as well as, we are advised, some allocated

parking elsewhere. There is access to the loading areas to the front of the

property and a separate access to the office areas with a fire exit to the rear.

This type of commercial property with metal frame and cladding construction

is typical of the type built from the 1970s onwards the more recent type (not

this type) being more energy efficient and green with the addition of insulation

and consideration being given to how the properties are heated efficiently.

The sales details that have been provided (xxxxxxxxxxxxxxxx) state that there

is an internal height of 6m, gross internal area is 3,876 sq ft (360 sq m) and the

energy performance assessment rating is 68 which is a C grading. We advise

we have not carried out any checking of measurements.




5

Location Plans




6

REPORT FORMAT

To help you understand our Report we utilise various techniques and different styles

and types of text, these are as follows:

GENERAL/HISTORICAL INFORMATION

This has been given in the survey where it is considered it will aid understanding of the

issues, or be of interest. This is shown in “italics” for clarity.

TECHNICAL TERMS DEFINED

Throughout the Report, we have endeavoured to define any technical terms

used. This is shown in “Courier New” typeface for clarity.

A PICTURE IS WORTH A THOUSAND WORDS

ORIENTATION

Any reference to left or right is taken from the front of the property, including

observations to the rear, which you may not be able to physically see from the front

of the property.

ACTION REQUIRED AND RECOMMENDATIONS

We have used the term ACTION REQUIRED where we believe that there are items

that you should carry out action upon or negotiate upon prior to purchasing the lease.

Where a problem is identified, we will do our best to offer a solution. However, with

most building issues, there are usually many ways to resolve them dependent upon

cost, time available and the length of time you wish the repair/replacement to last.

We utilise photographs and sketches to

illustrate issues or features. In some

photographs a pencil, pen, circle or arrow has

been used to highlight a specific area. The

sketches are not 100% technically accurate; we

certainly would not expect you to carry out

work based upon the sketches alone.




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SUMMARY OF CONSTRUCTION

External

Main Roof:

Roof Structure:

Pressed metal roof with a pre-finish

Rolled top front and rear detail into a metal box

gutter.

The roof was to too high to access from a

standard ladder we are happy to return with a

cherry picker to inspect the roof if you so wish

to instruct us – we believe the roof will be an

important part negotiations and future

dilapidations claims.

Roof supported by metal portal frame

Gutters and Downpipes:

Metal box gutter into plastic downpipe

Soil and Vent Pipe:

Structural frame:

Walls:

Higher Level:

Lower Levels:

Internal

Structural metal frame

Single Cladding Panels

Blockwork

External Detailing: Aluminium windows double glazed, pre-

finished

Roller shutter doors

Person door

Rear fire exit




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Internal

Internal Roof/Ceiling:

Undercladding to the perimeter of warehouse

area and suspended ceiling system to office

areas (assumed)

Internal Walls:

Perimeter Walls:

Some solid, predominately studwork (assumed)

Blockwork and exposed external cladding.

Floors: Ground Floor:

First Floor:

Floated Finish Concrete (assumed)

Timber and metal and joists (assumed)

The property sits on a sloping site.

Surrounding Areas:

Concrete loading and access area.

Services

We believe that the property has a mains water supply, drainage, electricity

and gas. The electrics are located in the Ladies toilets. There is a Gas boiler

located in the Kitchenette area.

We have used the term ‘assumed’ as we have not opened up the structure.

ACTION REQUIRED: Your Legal Advisor should check all the

above and advise us of any further information they require before legal

commitment to purchase the lease.




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EXTERNAL PHOTOGRAPHS

Front view Rear view

Parking Road view

Right view




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EXECUTIVE SUMMARY

Summaries are not ideal as they try to précis often quite complex subjects

into a few paragraphs. This is particularly so in a summary about someone’s

future business when we are trying to second-guess what your priorities are, so

it is important the Report is read in full.

It is inevitable with a report on a building of this nature that some of the issues

we have focussed in on you may dismiss as irrelevant and some of the areas

that we have decided are part of the ‘character’ of this property you may think

are very important. We have taken in the region of 500 photographs (a CD

copy of all photographs is enclosed) during the course of this survey and many

pages of notes, so if an issue has not been discussed that you are interested in

or concerned about, please phone and talk to us before you purchase the lease

(or indeed commit to purchasing the lease), as we will more than likely have

noted it and be able to comment upon it. If we have not we will happily go

back. Having said all of that, here are our comments:

When taking on a lease we believe there are three key areas that you need to

consider, these are:

The Business

At the end of the day only you can decide upon the true potential of this

property for your business and its value to you. We spoke briefly about rents

and the affordability of rents.

You do really need to take independent advice on the rental market value to

identify what the typical user would pay. Also, as we explained, we would

recommend that you look in detail at your projected cashflows and

profitability to ensure that you can afford the rental demanded.

The Lease

The quality of the lease needs to be discussed with your Legal Advisor and

understood. You need to understand your rights, responsibilities and liabilities

when you sign for a lease of this nature.




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We ask that your Legal Advisor brings any onerous or unusual clauses to your

and our attention before legal commitment to purchase. For the purpose of this

report we have assumed this is a standard full repairing and insuring Lease.

The Property

There are many aspects to look at property-wise, both from its condition at the

moment, to its condition in relation to the lease and its future condition.

You are currently reading the Property Report, which is intended to advise you

on the property element of the purchase. We will also provide you with a

Schedule of Condition, which will enable you to agree with the Landlord the

condition of the property when you start to lease it and should be signed and

appended to the lease.

We would remind you that you only have one chance to negotiate the rent

price correctly at the start of the lease. The rent agreed at the start of the lease

will affect all future rent reviews so ensure you are paying the market rent/the

lowest rent possible and be aware that rent free periods, stepped rents, etc do

not lower the rent value. You also need to ensure that the Schedule of

Condition is appended to the Lease to minimise future repair liability.

The Summary

The Summary is divided into the good, bad and the ugly or as we have titled

the sections here plus points, medium priority and high priority. This is to

enable you to get a better understanding of the potential and issues with the

property.

Plus Points

Survey reports often are full of only the faults and general ‘doom and gloom’, so we thought

we would start with some positive comments on the property!

To summarise these into plus points:

1.0 ) The property has vacant possession.




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2.0 ) From your comments you urgently require the space.

3.0 ) The space internally is open plan, which means that you can

have almost any design you wish. You do need to remember if

you do decide to divide the building up you should advise and

gain approval/concent from the landlord.

We are sure you can think of other things to add to this list.

Medium Priority

Problems / issues raised in the ‘medium priority’ section are usually solvable, but often

need negotiation upon. However, a large number of them may sometimes put us off the

property.

1.0) General condition not to FRI Lease standards

We would advise that the property is not to typical Full Repairing and

Insuring lease standards as inspected at the time of our survey which

means there is work to be carried out by the existing leaseholder and/or

the landlord.

We would add that typically a Full Repairing and Insuring lease requires

full repair and redecoration when the lease comes to an end one month

before know as yielding up or giving the property back. Repairs and

redecoration have clearly not taken place recently and we believe that

these have not taken place regularly during the course of the Lease and

are typical clauses in a Full Repairing and Insuring Lease.

We have detailed items within the Schedule of Condition which we do

not believe are to the standard set within the covenants (terms and

conditions of the lease) as the property stands. We also add that we do

not believe that cyclical redecoration has been carried out externally or

internally during the course of the present Lease.

ACTION REQUIRED: We would not take on this Lease without a

Schedule of Condition being legally appended to the Lease and the

condition of the property being agreed and understood with the

Landlord and their Legal Advisors.




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In this case we would be looking for a reduction in the Lease value

and Lease rent and as mentioned we would not consider taking on

the Lease without a Schedule of Condition legally appended to the

Lease.

Covenant Defined:

The laws and rules within a Lease that are actionable

via the legal system.

ACTION REQUIRED: We recommend a Schedule of Condition

must be legally appended to the Lease.

In this case we would recommend exclusions from the Lease in the

following areas:

2.0) Roof windows in poor condition

The roof windows are in poor

condition, which is clearly visible that

they are weathered and dated. The only

roof window we were able to inspect

closely was within the office above the

suspended ceiling and this appears to

have twisted and warped which from

the minor water stains in the ceiling tile

below indicates does allow rainwater

into the property.

Without a roof inspection we can only

assume that other roof windows will

allow rainwater in during periods of

heavy rainfall or wind driven rain.

ACTION REQUIRED: Ideally the

roof and the roof windows need to

be inspected jointly with the

landlord.

Roof window showing twist

Dip in roof light




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We also discussed briefly excluding the roof windows and the roof

from the Lease but the problem you have is that the roof windows

and roof may leak and affect your business. Whether it is or is not

the landlords responsibility it certainly will not be as important to the

landlord as it is to you when you are running your business and you

may end up carrying out the work anyhow or equally having

negotiations, discussions/arguments with the Landlord with regard to

the speed of carrying out the work and/or the quality of the repair.

We would recommend that you negotiate based around you carrying

out repairs for an additional rent free period, however we would not

be surprised if the roof windows need complete replacement.

ANTICIPATED COST: We would negotiate additional rent free

period based upon the work required and carry out the work

yourselves; please obtain quotations.

3.0) Box gutter

We believe the box gutters are leaking

from what we could see at the time of

our inspection they have been painted

over.

We could see what we believe to be

leaks to the joints and minor rust spots.

ACTION REQUIRED: We

recommend you allow for

clearing out these gutters and

checking the inside and taking a

photographic record.

Rusting box gutter painted over




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4.0) Fire cladding around the metal portal frame

The main structure of the property is

what is known as a portal frame. The

portal frame is metal and is fire-proofed

with cladding which has been damaged

and has deteriorated over the years.

ACTION REQUIRED: Replace.

Again we would negotiate a rent

free period based on this.

ANTICIPATED COST: £5,000 to

£10,000; please obtain quotations.

Metal portal frame

Left side damage where there

should be fire protection over

the seals

Fire cladding damaged waiting to

fall off

Fire cladding partially

missing/damaged

Damaged fire cladding




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5.0) External cladding - above average impact damage

The external cladding has an above

average areas of impact damage, old

fixture and fitting points and holes

where fixtures have been removed.

For example: the signage.

There are general marks and

weathering to the external cladding.

ACTION REQUIRED: The risk is

that at the end of your Lease that the

Landlord looks to have parts of the

cladding replaced. We would

expect then that the Landlord would

expect complete redecoration of the

property and therefore you need to

allow for this.

ANTICIPATED COST: We would

expect external redecoration,

including the roof, to be in the region of £10,000 to £20,000

dependent upon panels that would require replacement; please obtain

quotations.

Examples of some of the damage to cladding:-

Front Left side

Impact damage to right side of

door

Impact damage around roller

shutter door

Different shades of black




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Front Right Side

Rear

Impact damage left side Left side impact damage at base Close up of impact damage left

side

Impact damage at rear Hole at rear

Damage to base below external

cladding Damage to right side




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6.0) External cladding – effects of sun and aging

To reiterate the problems with the

cladding, this will be a large cost and

claim liability on any future

dilapidations. The front cladding

panels and windows in particular have

suffered from the sun and also general

use and abuse with regard to the roller

shutter doors and main door.

The effect of the sun can be seen by the

various shades of red that you have to

the cladding and also the various

shades of black!

With regard to the windows we can see

pattern staining to them and weathering

as well as some of the rubber seals are

starting to perish.

Various shades of black

General wear to the door

Weathering to the window Tape on windows to the front and

general fading to roller shutter

door and window area




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The rubber seals are starting to perish

and one of the windows has misted

adjacent to the toilets indicating the

seal is broken.

ACTION REQUIRED: This type

of faded pre-finished aluminium is

very difficult to finish to its original

condition. You will need a

Schedule of Condition legally

appended to the Lease to ensure that

you only have to give the property

back in the condition it is in.

7.0) Internal welfare

There is little privacy due to the

minimal construction of the dividing

panels. You may wish to improve this.

ACTION REQUIRED: We

recommend that you improve this

along with the general damage to the

service ductwork within the toilets.

We would also recommend

replacement of the sanitary ware.

In the Gents Toilets you may wish

to fit a urinal and again we

recommend all the sanitary ware is

replacement together with larger

wash hand basins.

Gents toilets

Ladies toilets

Misted window




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The toilets could be larger by

blocking part of the corridor but this

requires some thought.

ANTICIPATED COST: This can

really be as little as you wish but we

suggest at least £1,000 upwards is

spent; please obtain quotations.

8.0) Fixtures and Fittings

We discussed the air conditioning units

which have been left and also the

shelving etcetera; we have identified

these in the Schedule of Condition as

“previous tenants fixtures and fittings”

and this should limit any future costs

associated with them (dependent upon

the exact terms of the Lease).

ACTION REQUIRED: Specifically advise the Landlord that

there are old fixtures and fittings in

the property which you do not wish

to take responsibility and are

assuming that they are the previous

tenants fixtures and fittings

otherwise they could become yours.

9.0) Office Area

There is general minor damage within

the office area but nothing over and above what we would typically

expect to see.

ACTION REQUIRED: We recommend general redecoration;

you may wish to improve the lighting dependent upon the use that

you have for the various areas.

WC in Gents

Air conditioning units at front

Air conditioning units

restricting access right side




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10.0) What terms are in your Lease?

If you recall we spoke about what terms are in your Lease – is it a Full

Repairing and Insuring Lease known as an FRI with a “Put and Keep”

Clause or with a different Clause. You need to ensure that your Legal

Advisor explains to you until you understand the Lease. We often find

that clients only understand their Lease when they are trying to leave the

property and find it financially painful and best to carry out the work

prior to leaving.

11.0) Layout

You need to ensure that the existing layout is agreed and how you are

going to give the building back. We spoke about this briefly where you

indicated that there was no plan with regard to how the building is at

present, ideally a basic plan should be drawn up and legally appended to

the Lease.

12.0) Services

We have not tested any of the Services.

ACTION REQUIRED: Test certificates to be obtained from the

previous tenants and/or the Landlord.

Please see further comments at the end of this section.




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High Priority

We normally put here things that we feel will be difficult to resolve and will need serious

consideration.

There is nothing, which we feels falls within this category with the

exception of the roofs.




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Other Items

Services

This survey does not include any specialist reports on the electricity supply and circuits,

heating or drainage, as they were not requested. The comments that follow are based upon

a visual inspection carried out as part of the overall Survey.

Services and specialist installations have been visually inspected. It is impossible to

examine every detail of these installations without partially dismantling the structure. Tests

have not been applied. Conclusive tests can only be undertaken by suitably qualified

contractors. The vendor/seller should be requested to provide copies of any service records,

test certificates and, ideally, the names and addresses of the installing contractors.

Certificates required to be obtained from landlord/outgoing lessee

Test certificates to be provided on:-

1. Electrics – An Institute of Electrical Engineers standards (IEE)

test and report to be carried out by an NICEIC registered and

approved electrical contractor or equivalent.

2. Space heating inspection and test report (you need to see these in

working order)

3. Up to date asbestos report with samples.

4. Drainage – closed circuit TV camera report.

5. Fire Safety

We recommend you have a Fire Specialist to review the building

prior to legally committing to purchase.

6. Any proposed planned maintenance that the landlord will be

carrying out before the Full Repairing and Insuring lease takes

place on the basis of the property condition and Schedule of

Condition.

Tests and reports are standard requirements of a Full Repairing and Insuring

lease as is redecoration before the end of the lease.




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The Summary Upon Reflection is a second summary so to speak, which is

carried out when we are doing the second or third draft a few days after the

initial survey when we have had time to reflect upon our thoughts on the

property. We would add the following in this instance:

We would draw your attention back to the roofs, roof windows and the

gutters. It would be good to carry out a joint inspection of this area with the

Landlord although generally we find Landlords are not interested in carrying

this out. We would cynically argue that this joint inspection may come at a

later date and the Landlord may make claims regarding this area.

We would also draw your attention to the general condition of the wall

cladding which has a higher than average impact damage/old fixing points and

the sun effecting the colour of the cladding.

We would ask that you read this Property Report and the Schedule of

Condition and contact us on any issues that you require further clarification on.

SUMMARY UPON REFLECTION




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REPORT INFORMATION

EVERY BUSINESS TRANSACTION HAS A RISK

Every business transaction has a risk, only you can assess whether that risk is

acceptable to you and your circumstances.

SOLICITOR/LEGAL ADVISOR

To carry out your legal work you can use a solicitor or a legal advisor. We

have used both terms within the report.

TERMS OF ENGAGEMENT/LIMITATIONS

This report is being carried out under our terms of engagement, as agreed to

and signed by you. If you have not seen and signed a copy of our terms of

engagement please phone immediately.

OUR AIM IS ONE HUNDRED PERCENT SATISFACTION

Our aim is for you to be completely happy with the service we provide, and we

will try and help you in whatever way possible - just phone us.




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If you would like any further advice on any of the issues discussed (or indeed

any that have not been discussed!) then please do not hesitate to contact us on

0800 298 5424.

For and on Behalf of

XXXXXXXXXXXXXXXXXXXX

Independent Chartered Surveyors

XXXXXXXXXXXX

XXXXXXXXXXXX

XXXXXXXX

XXXXXXXXXXX

XXXXXXXXX

This Report is dated: XXXXXXXXX




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APPENDICES




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FACILITIES (All directions given as you face the property)

We have included a list of the facilities that we have viewed. The following

gives a general overview of the property.

Ground Floor

1.0) Warehouse/Assembly area

2.0) Entrance Area

3.0) Kitchenette

4.0) Gents/Disabled Toilets

5.0) Ladies Toilets

6.0) Internal Office

First Floor

7.0) Open Plan Office

8.0) Staircase and associated lobby area

Boundaries

1.0) Front: car parking area, there is

some damage to the kerb and the

plants are overgrown.

2.0) Left: Adjoining property

3.0) Right: Neighbouring property,

which has air cooling units etc

which are partly blocking the Fire

Escape.

Drainage point from adjacent

building




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4.0) Rear: Shingle Fire Escape area, drainage point from adjacent

building; as you explained to us there may be a risk of flooding from

this during heavy downpours of rain (our weather climate we believe

does appear to be moving towards generally better conditions with

more intense extremes).

For the Record here is our list of recent records that have been broken.

Our weather seems to be moving towards the extremities from relatively mid

range. A few interesting facts in Britain over the years have been:

2000 Wettest year on record at the time

2003 Driest year on record at the time

2004 Wettest August on record at the time

2004 Boscastle was the worst flash flood on record at the time

2005 Third driest year on record at the time

2006 Warmest year recorded on record at the time

July 2006 Hottest July on record at the time

2006 Hottest autumn on record at the time

2007 Warmest spring on record at the time

2007 Wettest June on record at the time

April ‘06-April ‘07

2008

2009

2010

Dec ‘13 – Feb ‘14

References

Hottest 12 months on record at the time

Third wettest August since 1956

Heaviest snowfall in march since 1991

Britain faces one of the coldest winters for 100 years

Wettest winter on record

BBC News www.bbc.co.uk

Note, we have not seen a copy of the Deeds and assume the boundary is to be

as visually set out above.

Your Legal Advisor to check and confirm boundaries and your legal rights

with regard to access, parking and permitted hours of work.




30

LIMITATIONS

CONDITIONS OF ENGAGEMENT

The report has been prepared in accordance with our Conditions of

Engagement dated xxxxxxxx and should be regarded as a comment on the

overall condition of the property and the quality of its structure and not as an

inventory of every single defect. It relates to those parts of the property that

were reasonably and safely accessible at the time of the inspection, but you

should be aware that defects can subsequently develop particularly if you do

not follow the recommendations.

ENGLISH LAW We would remind you that this report should not be published or reproduced in

any way without the surveyor’s expressed permission and is governed by

English Law and any dispute arising there from shall be adjudicated upon only

by the English Courts.

SOLE USE

This report is for the sole use of the named Client and is confidential to the

Client and his professional advisors. Any other persons rely on the Report at

their own risk.

ONLY HUMAN!

Although we are pointing out the obvious, our Surveyors obviously can’t see

through walls, floors, heavy furniture, fixed kitchen units etc. they have

therefore made their best assumptions in these areas.

As this is a one off inspection, we cannot guarantee that there are no other

defects than those mentioned in the report and also that defects can

subsequently develop.




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WEATHER

It was a dry sunny summer’s day at the time of the inspection. The weather

did not hamper the survey.

NOT LOCAL

It should be noted that we are not local surveyors to this area and are carrying

out the work without the benefits of local knowledge on such things as soil

conditions, aeroplane flight paths, and common defects in materials used in the

area etc.

EMPTY PROPERTY

The property was empty at the time of our survey, we were therefore not able

to carry out our usual question and answer session or have our questionnaire

filled out.

INSPECTION LIMITED

Unfortunately in this instance our inspection has been very limited due to:-

1) We have had a limited view of the roof, roof windows and gutters.

2) We have not had the benefit of meeting the landlord or the previous tenant. 3) The property was unoccupied. 4) We have not turned any services on. 5) We have not been able to identify where the drainage point to the rear of

the property comes from and the likelihood or indication of the amount of

water that could pass through this.

BUILDING INSURANCE

We do not advise with regard to building insurance. You need to make your

own enquiries. Some areas may have a premium, some buildings may have a

premium and some insurers may be unwilling to insure at all in certain areas.

You need to make your own enquires prior to committing to purchase the

property. Please be aware the fact a building is currently insured does not mean

it can be re insured.




32

We would comment that non-insurability of a building we feel will affect lease

value.

ACTION REQUIRED: You need to ensure that the leaseholders have

adequate insurance.

TERMS AND CONDITIONS

Our computer system sends two copies of our Terms and Conditions to the

email address given to us when booking the survey; one has the terms attached

and the other has links to the Terms and Conditions on our website (for a

limited time). If you have not received these please phone your contact

immediately.

Documents

JOB REFERENCE: XXXXXXXXXXXXXXXX PROPERTY REPORT … · 2014-10-22 · Remember with dilapidations everything can be negotiated. Our golden rule is ... To help you understand our Report