Risk. We all crave it to one extent or another. Whether we surf 20′ waves, mountain bike on a narrow path in the dark, or cross the street where there’s no crosswalk, risk is part of our daily lives. And, to be truthful, every decision has a degree of risk.
An example of a low-level risk is when you’re at a diner. You could order the cheeseburger with onion rings and run the risk of an upset stomach. The risk is whether or not the momentary pleasure is worth future discomfort.
People often say the “bigger the risk, the bigger the reward.” That may be true but the risk is still big in that scenario.
When you start looking for a building, presumably with your real estate broker, emotion sets in. You may feel charmed, intrigued, and, well, ready to make the deal. Endorphins kick in. Like eating the cheeseburger and savoring all of its flavors, you have now entered the lizard brain zone where logic is not welcome.
Buying or leasing a building is a big deal. Because of the time and financial commitment made when you sign on the dotted line, you should mitigate your risk. One of the ways to do this is by getting a building survey first.
Over the years, we’ve heard clients say things like this to us (names are removed to protect the innocent):
“Oh, I didn’t know you do building surveys.”
“But I thought I didn’t need one if I’m only leasing…”
“I just closed escrow; now I have to sell the building and go look for a new one.”
Two things to consider:
Is the Building Up to Code?
A building may look nice and have modern, well-kept restrooms but it’s not really about the beauty, it’s how they measure up. ADA codes change periodically and even if the restrooms, for example, were built to code they may not stay that way. Any kind of improvements you make to the building will involve the Valuation Threshold. And we haven’t even gotten to Title 24 Energy Envelope Codes, Landscape Requirements, or the rest of the issues that might be brought up by the Planning and/or Building Departments when you pull permits.
Has the Building Been Neglected?
There’s nothing worse than a neglected building. Often roof maintenance has been neglected, leaving areas vulnerable to water intrusion, a very corrosive and destructive element. Asphalt neglect can lead to alligatoring of the parking lot. Are the HVAC units in working order? The list goes on. A building survey can point out some of the risk you may assume with the lease or purchase.
Yes, even if you lease a building you should get a survey.
Risk is risk. If you lease a building and have any intention to improve it, a building survey is right for you, too. It’s not just for building purchases.
Tom dancing in his living room in an oxford shirt and white socks to a Bob Seger song may be risky business, but making an appointment with him to discuss your options for a personalized site visit is not.