Our expertise in the operational side of property has led us to develop a fully comprehensive pro-forma for a due diligence exercise, either for a potential purchaser of a property or for a current owner to assess the cost effectiveness of his investment.
Our due diligence covers the following aspects:
- Lease Agreement Analysis -we assess the workability of the leases from an operational perspective. This includes identifying areas which a potential purchaser may have problems, or should at least be made aware of, regarding his obligations to the tenant, as well as the tenants obligations in terms of the lease;
- Insurance Policy Analysis - we analyse the insurance policies held over the building to ensure that adequate cover is in place, highlighting any exclusions and other areas that the purchaser needs to be made aware of;
- Financial Report - our financial report looks at the previous years' income and expenditure, comparing it to market norms, and identifying areas of expenditure that are above what could be expected. This enables us to identify whether there is equipment within the building that may need replacement or major overhaul in the short term. We also put together a provisional budget for the coming 12 months so that the purchaser has some indication of what costs to expect;
- Occupational Health and Safety Compliance Report - we conduct an audit of the health and safety aspects of the building, looking mainly at the physical integrity of the building, evacuation procedures, signage, hygiene facilities, plant and equipment and housekeeping. If the leases include a clause requiring the tenants to adhere to all national, provincial and local legislation, we can audit the health and safety systems of each tenant, should it be required;
- Consolidation Report - should the building/s cover more than 1 erf, and there are provisional plans for redevelopment, a land surveyor will be sub-contracted to report on whether there is anything in the title deeds to prevent the purchaser from consolidating the erven into one;
- Heritage Report - should the age of the building dictate that one is required. This is not a full Heritage Impact Assessment, but does make one aware of any restrictions that may be imposed should the purchaser be thinking of redeveloping the property;
- Zoning, Land Use and Council Approvals Report - assessment of the local government restrictions that may be in place over the building, and ensuring that the buildings are fit for occupation in terms of the issuing of an occupancy certificate;
- Entomologist Report - usually the responsibility of the seller, but we can arrange for certification should it be required;
- Fire Engineers Report - assessment of the compliance of the building with the National Building Regulations in relation to the provision of fire fighting equipment, escape routes and related items;
- Structural Engineers Report - should it be required. Assessment of the structural integrity of the building;
- Electrical Engineers Report - assessment of the electrical reticulation within the building, including the provision of emergency power. We also can arrange for the issuing of Electrical Certificates of Compliance, which unless specified otherwise in the offer to purchase is usually the purchasers responsibility;
- Air Conditioning Report - assessment of the current state of the air conditioning plant and equipment;
- Lift Report - assessment of the current state of the lifts and escalators in the building;
- Asbestos Survey - to assess whether there are any areas of concern.
|
