Investors, owners, and banks know that a Property Condition Assessment (PCA) is a must on every new commercial property purchase. Increasingly, these individuals are likewise recognizing the limits of the PCA to fully cover their potential liability. Along with reserve tables and code compliance reviews, many have begun to add the hazardous buildin2g materials assessment to their due diligence.
Property safety is an important consideration when purchasing somewhere to live and work as ultimately poor quality materials can have an impact on people’s health. The assessment is similar to a home survey when buying a new home which is a review of the property’s condition but in a much stricter format.When purchasing a property for development, it is essential that every step of the process is considered in detail. For instance, when transforming a large scale building into a commercial development, 3d architectural rendering can be used to better visualise the end product. These images are not only beneficial for you as the developer but also give any potential investors a better idea of what to expect from the finished development.
Consequently, a PCA assessment can inform any necessary structural changes that need to be made to the site and can also be reflected in these images. Needless to say, before any developments take place, an assessment of the building’s condition is vital.
Here are five reasons in favor of the assessment.
1. The Presence of Hazardous Building Materials Increases the Cost of Renovations
Whether you plan to renovate immediately, change the property’s use, or simply want to understand the cost of maintenance and renovations down the road, a hazardous building materials assessment gives you critical information. Asbestos, lead paint, silica, PCBs, and mercury are among the most common hazardous materials that impact the cost of renovations, and even new buildings are likely to contain one or more of these materials. It pays to know which ones and how much of it is present, as well as what the likely remediation costs will be. It’s always better to know if there are any hazardous materials present as purchasing a property to develop is a costly project, so no one wants these added expenses. Once you know how much it will cost to remove these materials, property developers can then plan how they’re going to spend their budget and work out where they can remodel. When flipping a home to sell, there are some rooms and features in a home that are more important than others. For example, a lot of homeowners desire a renovated bathroom. This often includes a bathtub and an electric shower, as hygiene is so important to people. When adding an electric shower, be sure to find the best electric shower 2020 to ensure the bathroom will be energy-efficient for homeowners. Those sorts of features are what homebuyers do look out for, so there is an increased chance of selling the property if those features are present. However, bathroom remodels can be expensive, so be sure to consider the cost of the whole remodel before going ahead. Also, it’s a good idea to include the cost of checking for hazardous materials, as that is always worth doing.
2. Some Materials May Make the Property Unsuitable for Certain Purposes
Lead paint is usually only a problem when you disturb it, due to renovations. However, its presence can make the property unsuitable for use, particularly by child-occupied facilities such as hospitals, child care, and residential developments. The groundworks materials may have been damaged slightly before being used due to the weather, for example, this is why construction companies should use safer storage systems to keep their building materials as efficient as possible. If you plan to use the property for any of these purposes, it’s good to know in advance whether you’ll have an immediate problem to deal with.
3. Other Materials May Make the Property Unusable for Any Purpose At All
Mold can grow for a year undetected until the building changes hands and becomes occupied by that one sensitive individual. Suddenly, remediation becomes the problem of the new owner, even if the mold has been there for years. It’s also possible for hazardous materials that were previously contained to deteriorate and become a problem more or less on their own. For example, we did extensive remediation on the Ringling mansion, Ca d’Zan, after it was discovered that rats had disturbed asbestos-containing materials. The dust had been disbursed through the HVAC system and coated every surface in the building. Remediation cost the property owner millions of unbudgeted dollars, and was required before any use of the facility could proceed.
4. Improperly Disposed Materials Can Become Your Problem at Purchase
The presence of barrels, cans, bottles, or other containers of hazardous materials can become an environmental problem after the purchase. Current law holds that hazardous material disposal liability stays with the property-meaning that even if you did not create the situation, you are responsible for remediating it if you own the property. Further, undetected containers of hazardous material can deteriorate over time and create a larger environmental problem that will be even more costly to remediate. Knowing about the materials before you make the purchase allows you to remediate earlier rather than later-or to require the seller to perform the remediation.
5. Discovering Hazardous Materials Presents an Opportunity to Negotiate More Favorable Terms
Discovering the presence of hazardous materials on a property is not usually a deal-breaker. Instead, having a thorough understanding of the building’s hazardous materials liabilities gives the buyer an opportunity to renegotiate terms to ensure they receive the good value for their purchase. In the event that the purchase decision proceeds with the expectation of renovations, lenders can often increase the value of the loan in order to cover the true cost of those renovations.
Whether you’re a buyer or a lender, a hazardous building materials assessment just makes sense. You can talk to one of our assessment experts right now, or read more about hazardous building materials during renovation here.
About the author
Bob Greene, PE, PG, CIH, LEED AP President As the founder and president of GLE, Bob Greene leads a highly diverse team of architects, engineers, environmental consultants, and construction experts to design fast and effective property solutions. He has served in the architecture, engineering, environmental consulting and remediation, and general construction arenas for nearly 40 years.
This article was first published on the GLE Associates website.