TFT Partner and TDD specialist David Mann has co-authored the first edition of the technical due diligence of commercial property global guidance note, including a new scope of service, published this week by RICS.

What does the new guidance contain and what does it mean? Read on to find out.

RICS published the new guidance on 14 January, replacing four previous editions covering England and Wales as well as country-specific versions in New Zealand, Australia and Continental Europe.

The document defines technical due diligence as ‘the process of systematic review, analysis, discovery and gathering of information about the physical characteristics of a property and/or land (the property). The surveyor then undertakes an impartial and professional assessment of the property and provides a balanced and professional opinion of the technical condition of it, enabling a prospective purchaser, occupier or financier of property to make an informed assessment of the risks associated with this transaction.’

Some of the more prescriptive language used in previous editions on how to conduct a survey – or what to look for in a typical building element, for instance – has been omitted as it was felt this would be understood by surveyors through their experience.

The guidance note also states that the technical due diligence process must be methodical, assessing each key building element and answering the following questions:

• What, if anything is wrong?
• What would the consequences be if the defect were not rectified?
• What remediation is recommended?
• Who is responsible for the cost of repair?
• What further investigations are recommended, and when?

The note has also been updated to reflect modern practice, including the use of virtual data rooms, data collection software and drones.

The document sets out what a building surveyor must consider during the briefing or confirmation of instructions phase. It more clearly reflects that we often act as the lead consultant for the technical due diligence process, bringing together other specialist advisers such as mechanical, electrical and vertical transportation engineers, cladding consultants or environmental engineers.

The intention is to provide a more useful document than previous editions which better reflects the breadth and depth of the technical due diligence process, over and above what was traditionally considered to be a building survey.

References to fire safety as well as health and safety were reinforced following two tragic events in the UK in 2017: the Grenfell Tower fire and the death of Tahnie Martin in Wolverhampton who was hit by debris that came loose from a roof during Storm Doris. This includes the introduction of a risk rating for any defects that need ‘immediate’ action which requires a surveyor to point out anything considered as immediate danger. For example, a section of loose masonry would be appointed to an ‘appropriate person’, most likely the building manager, the vendor or their agent. Risk ratings can also help a time-poor client focus on the issues, either during the purchase or following completion of the transaction.

The arrival of the guidance note is a timely one in what is a critical part of the property transaction and management markets and it is an essential read for RICS registered members and firms undertaking technical due diligence services. Building surveyors must be aware of the guidance in relation to taking instructions, inspecting and reporting where professional standards are continuously improving. In this way they can ensure they deliver to the client and importantly they follow good practice and so demonstrate competence and protect their clients and themselves.

The newest edition of the guidance note can be accessed here.

For more information on the guidance note, or to understand how TFT's approach to TDD can help you, please contact David Mann at dmann@tftconsultants.com