Getting the Real Truth in Commercial Property Inspections
When looking at a new commercial or retail investment property for the first time, it is wise to have some form of checklist and system that assists you in the process. We have created this checklist to help get you on the right track.
Inspecting the property is almost like having your due diligence process underway. Do not believe everything you see, and certainly investigate anything in question. Anything of importance that someone tells you about the property should be analyzed.
Having a keen eye for property detail and a diligent record-keeping process as you walk around is the only way to inspect investment property. It is remarkable how these records have to be revisited later for reassessment.
So, let’s consider the following as primary issues to review in your property inspection process.
Before starting, a copy of the land title records is fundamental to your inspection. As part of this process, seek a copy of the survey records and any existing leases or licenses. Also, seek out any unregistered interests that may not appear on the title to the property. If in doubt, seek a good property solicitor to help. Take care to understand the location of the property boundaries and look for the survey pegs relevant to the survey plan. If in doubt, seek a good surveyor. Several easements, encumbrances, and other registered interests within the property land title need thorough investigation. These interests can impact the price that the property achieves at the time of sale and can also affect the lease occupancy method. If any registered interests exist on the 0property title, a copy of the relevant documentation is the first stage of the investigation, which questions should follow. Local council records may also have an impact on the property. Are there any orders or notices that have been issued or are outstanding on the property, and can these things concern the potential investor?
The zoning for the property and the zoning activity or changes in the precinct can impact a property. As part of this process, it is wise to include and inspect neighboring properties to ensure they have little or no effect or impact on your subject property. Copies of the local town plan will help you understand current planning issues. Discussing with the local planning office or planning officer can put you on the right track and explain any problems or matters that may arise. In this process, keeping records of the discussions and the findings is wise.
If a copy of lease documentation is available for neighboring properties, seek it out and review it. Knowing what the neighboring tenants are doing and how long they will be there is always good. The local topography and plans across the immediate area will help you understand the fall of the land and the impact of any slopes and natural drainage. Look at the location of any watercourses and flood plains. Seek out the history of any flooding in the area. The supply of electricity into and across the site should be understood. Energy supply will be strategically important to any industrial tenant if your property is industrial. If any easements or encumbrances exist across the property for electricity, then seek to understand the rights and obligations these documents create for the property owner.
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