A technical due diligence report (or acquisition report) is a detailed report of an existing property. It highlights the condition, identifies any elemental defects and includes a summary of the likely capital expenditure and maintenance works needed at a specific point in time or over the life of the asset.
Whether you are buying or selling a property, it’s critical you understand all the potential risks and liabilities that come with the acquisition.
Technical due diligence reports will show clarity of the asset and identify any possible risks, and likely costs you may face, to help you make an informed decision on the property before you commit to it.
Technical due diligence services offered include:
- Clarifying the client’s brief and required service
- Advising on what building components should be inspected
- Reviewing documentation, including all technical and legal documents
- Detailed property inspection
- Co-ordinating sub-consultants
- Liaising with other members of the acquisition team, such as lawyers, agents and investment advisers
- Preparation of the technical due diligence report in accordance with the RICS Best Practice Guidance notes
- Client after-service, including any additional questions or concerns or re-inspections to identify any major concerns as required, such as:
- Attending client meetings and post-report advice
- Liaising with the client’s legal team as required
Here’s a case study to illustrate this aspect of our business.
Property: Resort on the Whitsunday Islands
Age: Built in the 1970s and refurbished in 1995
The owner contracted us to conduct technical due diligence on the island resort before they put it on the market for sale. They wanted a complete picture of the state of the property and any future costs or risks in preparation for the asset sale.
We worked with their legal team and did a thorough inspection within five days of being contracted and issued the technical due diligence report within 10 days to meet the client’s timeframe.
The report was useful for both parties. For the vendor, it highlighted the state of the building and reflected the maintenance works done over the years. It detailed the condition, risk and likely future expenditures, as well as all previous reports and inspections on the property. For the buyer, it identified potential issues, problems and possible future maintenance costs. It helped the buyer weigh up their position before the transaction.
If you need help with a technical due diligence report – click here