Businesses need a building survey, too

Mr Dominic Thompson, chairman of the North-West board of RICS, said: “With the recent extremes in the weather and bank balances generally depleted it is essential businesses make sure they are adequately protected.

“Before signing for commercial property a building survey will provide a report on the condition of a building, both internally and externally, identifying any urgent repair requirements or future concerns.”

With business in the region starting to pick up, firms are looking to grow again and new businesses are looking to start up. RICS is highlighting the importance of both a building survey and the correct insurance when taking up new commercial premises to manage budgets efficiently and keep future costs down.

Leases usually require tenants to keep premises in good order. By law this means that if the premises are in disrepair, substantially or hardly at all, the tenant must put them into repair which can impose a large liability and burden on a new tenant.

Mr Thompson added: “In my opinion it is very important anyone taking on a building to expand their business consults a surveyor to advise on the condition, the likely cost of any repairs and the repairing clauses in the proposed lease, if necessary drawing up a Schedule of Condition.

“While a survey might act as evidence further down the line should a landlord try to make a firm pay for work they don’t think is justified, a chartered surveyor will assist in preparing a formal record or schedule of the building’s condition to protect the tenant.

“When commissioning a building survey, RICS says North-West businesses are well advised to use an RICS member well experienced in such matters and must tell their surveyor the purposes of the survey and its scope. He or she will not report in detail on the likes of the premises’ heating and electrical equipment or the underground drains unless asked to do so. Therefore, if these items need to be covered, the surveyor must be clearly instructed and will arrange to bring in the appropriate experts.”

Mr Thompson said businessmen should review thoroughly their insurance when taking on new premises. This should include the building replacement value, taking care to ensure the sum insured suffices to avoid under-insurance and the application of the average clause. It should also include business loses since buildings insurance does not usually cover disruption to a company’s contents or stock, so this often needs to be insured separately. If firms occupy only part of a building, it is normal practice for the landlord to arrange insurance for the building as a whole and then charge tenants a proportion of the cost.